Money Moves for 50-Somethings After the 2026 Social Security COLA (November 2025 Update)

Updated: mid-November 2025

If you feel like your money is being pulled in five directions at once, youre not alone. As a 57-year-old who thinks a lot about retirement and family finances, Im watching the latest numbers closely not because I love charts, but because they tell us how to adjust our everyday choices.

In the last few weeks, three big headlines have landed for those of us in our 50s and early 60s:

• The Federal Reserve has started cutting interest rates, but borrowing is still expensive.
• Social Security announced a 2.8% cost-of-living adjustment (COLA) for 2026 about $56 more per month for the average retiree.
• Surveys show many Americans in their 50s and 60s still arent confident their money will last through retirement.

Lets unpack what this all means in plain English and walk through a handful of practical moves you can make between now and the new year.

1. What the latest rate cuts really mean for your household

After raising interest rates aggressively to fight inflation, the Fed has now cut its benchmark rate several times. The target range for the federal funds rate is down from the mid-5% area a year ago to under 4% today.

For a household budget, that creates an odd mix:

• Credit cards and other variable-rate debt are still painful. Average card APRs are hovering in the low 20% range. Thats punishing if you carry a balance.
• High-yield savings and CDs are still paying solid interest, but the peak has probably passed. Online savings accounts and short-term CDs are often around the high-3% to near-4% range, with some top accounts a bit higher. The trend is slowly downward as rate cuts work through the system.

Translation: borrowing is still expensive, but you can earn more on safe cash than we could for most of the past decade. That combination is a huge clue about where to put your next dollar.

2. The 2026 Social Security COLA: why 2.8% is helpful but not a windfall

For 2026, Social Security benefits and Supplemental Security Income (SSI) will rise 2.8%. On average, thats about $56 more per month for a retired worker, starting in January 2026.

A few key points to keep in mind:

• The COLA is meant to help your benefit keep up with inflation, not to make you feel richer.
• Higher COLAs in 2023 and 2024 helped, but many retirees still report struggling to cover basics like housing, food, and healthcare.
• For people still working, the maximum earnings subject to Social Security tax will rise again, which can affect your paycheck if youre a higher earner.

If youre already receiving benefits, think of this 2.8% increase as a chance to move your plan forward a notch not as extra spending money.

3. Americans are worried about retirement especially in the middle

Recent national surveys show that only about a quarter of Americans feel very confident their savings and income will last through retirement. A big share say theyre not confident at all, or that they dont expect to retire in the traditional sense.

Interestingly, people who are already in their 60s and 70s are more confident than those of us still in our 50s, but even there, fewer than half feel truly secure. Confidence drops sharply for households with lower incomes and for those who are already stretched covering monthly basics.

Another set of findings on aging well highlights how strongly income and financial security shape peoples health, stress, and ability to enjoy later life. Higher-income older adults report better physical and mental health, more time for hobbies, and less financial strain than those with lower incomes.

Put simply: the financial habits we practice in our 50s and early 60s dont just affect our bank accounts. They touch our health, stress level, and sense of independence in our 70s and beyond.

4. Five money moves to make before the new year

Move #1: Give every new Social Security dollar a job

If youll see that 2.8% COLA in January, decide now where that extra money goes. A simple framework:

• If youre still working and not yet drawing Social Security: Use the COLA news as motivation to check your projected benefit at my Social Security and adjust your savings rate (401(k), 403(b), IRA, or Roth IRA).
• If youre retired and drawing benefits: Pretend the COLA never happened in your day-to-day spending. Instead, direct the extra amount to one of these:
  • An emergency fund in a high-yield savings account
  • Extra principal payments on high-interest debt
  • Premiums for Medicare supplements, long-term care coverage, or other protection youve been putting off

Even $50$60 a month, handled intentionally, can make a noticeable difference over a few years.

Move #2: Put your cash to work while rates are still attractive

Many families still have savings earning next to nothing in big-bank savings accounts.

Consider a three-bucket approach for cash:

1. Monthly checking: One month of expenses in your regular checking account for bills and everyday transactions.
2. Emergency fund: 36 months of essential expenses in a FDIC- or NCUA-insured high-yield savings account. If your savings rate is under about 3%, its probably time to shop around.
3. Short- to medium-term goals (15 years): Consider a CD ladder for example, equal amounts in 63, 123, 243, and 363month CDs so that a CD is always maturing and you can reinvest or use the cash as needed.

With CD and savings rates slowly drifting down, locking in a reasonable yield now for money you know youll need in a few years can be a smart, low-risk move especially if youre within 10 years of retirement.

Move #3: Treat high-interest debt like a house fire

When average credit card interest runs north of 20%, every dollar you carry on a card is like leaving a leak in your roof on a rainy night. It might not flood the house this month, but the damage adds up quickly.

If youre carrying balances:

• Stop the bleeding: Put the cards away for now. Use a debit card or cash to avoid adding to the balance.
• List your debts and interest rates: Either attack the highest rate first (the avalanche method) or the smallest balance first (the snowball method). The key is to pick an approach and stick with it.
• Look into a 0% balance transfer card or a low-rate personal loan if your credit is solid but only if you also change the habits that led to the balance in the first place.
• Beware store cards and holiday promotions: Save 15% today! can be very expensive if you end up carrying a balance at 2530% APR later.

Paying off a 22% card balance is the equivalent of earning a guaranteed 22% return. Thats better than any safe investment on the market right now.

Move #4: Do a simple retirement checkup

You dont need a 40-page financial plan to see whether youre roughly on track. Before the year ends, set aside an hour and:

1. Check your Social Security estimate. Log into your my Social Security account and note your projected benefit at 62, your full retirement age, and 70.
2. Add up your retirement savings. Include 401(k)s, 403(b)s, IRAs, and any old plans you might have forgotten about.
3. Estimate your basic monthly needs in retirement. Housing (taxes, insurance, maintenance if youll own outright), groceries, utilities, transportation, healthcare, and insurance.
4. Compare your likely income to those basic expenses. Social Security + pensions + any part-time work vs. your must-pay bills.

If the gap looks large, thats not a reason to panic; its a reason to adjust:

• Increase retirement contributions, even by 12 percentage points.
• Consider working a year or two longer, or easing into part-time work instead of stopping altogether.
• Start talking, as a family, about downsizing housing or other big-ticket expenses in your 60s.

Move #5: Build long-term care and healthcare into the plan

One technical change tucked into the latest inflation reports: long-term care insurance is being removed from part of the official Consumer Price Index. That doesnt mean long-term care is getting cheaper for real people; if anything, the opposite is true.

If youre in your 50s or early 60s, now is the time to think through:

• Whether you want traditional long-term care insurance, a hybrid life/long-term-care policy, or a self-funding plan.
• How youd pay for help at home or assisted living if you or your spouse needed it in your 70s or 80s.
• Who in the family needs to be part of that conversation.

This isnt just about money. Surveys show that older adults with more financial security report feeling less stress about aging and are more able to focus on relationships, hobbies, and health. Building long-term care into your plan is one way to buy yourself and your family some peace of mind.

5. Bringing it back to your kitchen table

Headlines about Fed rate cuts, COLAs, or inflation indexes can feel far away, but they show up right in the middle of family life in your grocery cart, your credit card statement, and your plans for work and retirement.

Heres how Id boil down the moment were in:

• Use this period of still-decent savings rates to shore up your emergency fund and lock in reasonable yields on near-term goals.
• Treat every new Social Security dollar as a tool for stability not as spending money.
• Make high-interest debt your top investment. Paying it off is the closest thing to a guaranteed high return youll ever see.
• Give your retirement picture a quick, honest look and make one or two concrete adjustments for 2026.
• Start the long-term care conversation while youre healthy enough to make calm decisions.

You dont have to fix everything before New Years. Pick one or two moves that fit your situation and start there. Small, steady changes are exactly how ordinary families people like you and me turn a stressful financial picture into a more confident, resilient one over time.