Hello,

More than 71 million Social Security beneficiaries can expect a 2.5% cost of living adjustment (COLA) increase in 2025, based on the Q3 inflation data so far.

In other words, the COLA will raise the average benefit by $48 to $1,968 a month. This is a welcomed increase for some, given inflation during the past year, but it is a drop off from bumps in recent years.

The Social Security Administration is scheduled to announce the official 2025 benefits increase on October 10. But don’t expect the final number to change much, if at all, at this point.

The adjustment is based on the average annual increase in the consumer price index (CPI) for urban wage earners and clerical workers (CPI-W) from July through September. Through August, CPI-W rose 2.4% in the past 12 months, compared to a 2.5% increase in CPI. 

Almost every retiree (91%) says Social Security is a source of their retirement income. Almost two-thirds (62%) say it’s a major source.

If you have any questions or concerns about this year’s COLA, please give us a call. We’re here to help.

Until next week,

Your Eagle Wealth Team

The Week on Wall Street

Stocks moved higher last week, continuing to build on the momentum generated after the Federal Reserve decided to cut short-term rates by 0.50 percent.

The Standard & Poor’s 500 Index gained 0.59 percent, while the Nasdaq Composite rose 0.95 percent. The Dow Jones Industrial Average added 0.62 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained an eye-catching 3.53 percent.^1,2
 

Congress Passes Spending Bill

Stocks started the week tepidly but in the green, as investors mostly shrugged off Tuesday’s weak consumer confidence report. Then, at midweek, markets put on the brakes as investors appeared to take profits after a four-day winning streak.^3,4

On Thursday, markets rallied on news that the final Q2 gross domestic product estimate showed the economy increased at an annual rate of 3.0 percent. Then Friday, the PCE, or Personal Consumption and Expenditures Index, showed inflation had cooled slightly more than expected in August, which some believe may influence the Fed’s decisions on short-term rates at its November meeting.⁵

Finally, a continuing resolution was passed by both houses of Congress last week and signed by President Biden Friday morning, assuaging concerns over a government shutdown. The resolution funds the government until December 20.⁶
 

China's Stimulus Package

This week, the head-turning performance came from outside the U.S.

As measured by the MSCI EAFE (Europe, Australia, and Far East) Index, international stocks rose more than 3 percent following news of China’s stimulus package, which could be as much as 2 trillion yuan, or $284 billion. China’s program also cut banks’ reserve requirements and lowered a key short-term interest rate. 

While the EAFE Index doesn’t track stocks from Mainland China, the stimulus package had far-reaching implications for other countries.^7,8
 

Past performance is not a guarantee of future results. Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. 
^{Source: YCharts.com, September 28, 2024. Weekly performance is measured from Monday, September 23, to Friday, September 27. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}

<sup>The outlook for the Social Security cost of living adjustment is a forecast, and forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.

CNBC.com, September 11, 2024. “Social Security cost-of-living increase for 2025 could be 2.5% — the lowest since 2021, estimate finds”

TheHill.com, September 11, 2024. “The estimated Social Security increase for 2025 keeps dropping”

EBRI, Retirement Confidence Survey, 2024.

1. The Wall Street Journal, September 27, 2024

2. Investing.com, September 27, 2024

3. CNBC.com, September 24, 2024

4. CNBC.com, September 25, 2024

5. BEA.gov, September 26, 2024

6. The Wall Street Journal, September 22, 2024 OR The Hill, September 25, 2024

7. The Wall Street Journal, September 27, 2024

8. The Wall Street Journal, September 27, 2023</sup>

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^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

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^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

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