US financial news | Summary news 16 October
US finance news: live updates
Headlines: Monday 16 October 2023
- Drugstore chain Rite Aid has filed for bankruptcy
- Gas prices declining in the US even as oil prices increase.
- Social Security Administration (SSA) announces 3.2% COLA for 2024
- Around 70 million Americans to get larger Social Security checks next year
- Average retirement recipient to receive at least $50 more per month
- As price increases cool in the US, will the Fed opt against rates rise?
- Which US states are issuing stimulus checks and tax rebates?
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Every month, the Social Security Administration (SSA) issues about 70 million payments to program beneficiaries, most of whom are retired workers. Last week, the SSA announced that beneficiaries of the programs it oversees would see a 3.2 percent increase in their benefits next year. This boost, commonly known as the Cost-of-living adjustment (COLA), is made each year to limit the impact of inflation on the purchasing power of retired workers and other beneficiaries.
However, the sending of COLA-applied benefits is still a few months away.
This month, the SSA will continue to distribute Social Security payments, with the next batch of payments scheduled for Wednesday, 18 October.
The United States has various economic assistance programs for individuals with limited resources. Relief is distributed at the federal, state, county, and local levels, with residents in some areas eligible for far more assistance than others.
Harris County in Texas has allocated $20.5 million towards the Uplif program, which will allow for the sending of $500 checks on a monthly basis to a small group of beneficiaries. In total, over 18 months, those enrolled in the program will receive $9,000. The program was approved by the county in June of this year.
Read more on the program in our full coverage.
Across the country, renters are facing an unsustainable situation. In September, the average rental price rose half a percent, leading to a year-over-year increase in prices of 7.4 percent, according to the Bureau of Labor Statistics (BLS). Incomes are not increasing at the same rate, leaving many tenants to spend more on their rent.
Not all cities have seen rental prices surge at the same rates. According to the Bureau of Labor Statistics, over the last year, the cities that have seen the highest increases in rent are...
A tax credit that was enhanced in the Inflation Reduction Act is being made easier to access. The $7,500 electric vehicle tax credit used to only be accessed through tax returns but a major change means it can now be qualified upfront when the car is purchased.
This means the the full tax break can be qualified for even if they don’t owe federal taxes, making it basically a $7,500 discount on an electric vehicle.
Medicare participants will have just over seven weeks to take advantage of open enrollment to sign up or change their coverage.
Would-be homebuyers have watched mortgage rates climb up over the past two years, limiting what they can afford on their budgets.
On average, retired workers in the US will be able to claim just over $1,900 a month in 2024.
For American workers who wait until what SSA terms 'full retirement age' before seeking retiree benefits, the maximum monthly amount will be just about double that.
Changes to the retirement earnings test exempt amount in 2024
Other changes will take place in January 2024 increase in the national average wage index. For example, the retirement earnings test exempt amount will also change in in the New Year - rising from $21,240/year ($1,770/month) to $22,320/year ($1,860/month). One dollar in benefits will be withheld for every $2 in earnings above the limit.
States that gained and lost high-income families during the pandemic
People began moving from high-cost cities to more affordable areas during the pandemic.
With record-high inflation and increased cost of living, high income families are opting out of paying higher taxes and moving to different states. Florida and Texas are among the top two states with the largest influx of wealthy families.
California and New York experienced the largest negative net-migration of high-income residents. California and New York lost more than 45,000 and 31,000 high-earning filers, according to SmartAsset.
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The Social Security Administration has released the cost of living adjustment for 2024, which is calculated based on inflation so as not to affect the purchasing power of beneficiaries.
The COLA for next year will be 3.2%. This percentage will apply to the millions of payments the SSA sends each month, including retired worker benefits and disability payments.
The latter include Social Security Disability Insurance and payments from the Supplemental Security Income program.
The issue of student loan forgiveness continues to be a contentious one, with the debt relief efforts of President Joe Biden government’s being thwarted at every turn.
To help lessen the financial burden caused by expensive college education on students and their families, some universities have begun to implement no-loan policies. They have removed federal loans from the financial aid programs that they offer, and instead are providing alternatives such as scholarships and grants.
Here are some top universities which are trying to ease the financial burden of college students.
Rite Aid files for bankruptcy in face of debt burden, opioid lawsuits and falling sales
On Sunday, one of America’s largest pharmacy retailers, Rite Aid, filed for Chapter 11 bankruptcy in the face of falling sales, elevated debt burden and over a thousand federal, state and local lawsuits stemming from its alleged role in fueling the opioid epidemic. The move will halt the lawsuits and, according to the drugstore chain, allow it to resolve litigation claims in an “equitable manner.”
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Identity theft has been around for decades, and the problem is not going away any time soon. According to the Federal Trade Commission, the number of reports of identity theft in the first half of this year has already matched that of the whole of 2019.
Being a victim of this crime can cause big financial losses and create other problems related to credit or bank accounts. Determining that you have been a victim of identity theft is crucial for taking swift action to prevent further harm to your personal and financial information.
Here are some signs that could indicate that you have been a victim of identity theft.
Military service retirees and disabled veterans will receive increased monthly checks next year due to the annual cost of living adjustment, but the increase will be less than half the 2023 rate of 8.7%.
The Social Security Administration announced that the yearly increase in benefits for 2024 would be 3.2%. Government retirement and disability programs that provide benefits to veterans are required by law to implement increases at the same rate.
Gas prices expected to fall despite uncertainty in oil markets
The price of a gallon of gas in the US maintained their downward trend at the start of the week, with Americans paying an average of $3.60 per gallon of regular on Monday, per AAA. Data from Gas Buddy put the national average five cents below that and the price of gas is expected to keep heading lower over the coming week.
Gas prices continued to move lower despite the uncertainty in the oil market caused by the Israel-Hamas war.
A month ago, US motorists were paying an average of nearly $3.89 per gallon of regular gas according to AAA data.
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When will the COLA increase take effect?
Recipients of Social Security retirement, disability and survivors' benefits will start receiving their higher monthly checks in January 2024.
Beneficiaries of the Supplemental Security Income (SSI) scheme, however, will get their first increased payments a smidge earlier.
The first SSI checks of 2024 will actually go out on Friday 29 December 2023. That's because the usual SSI payment date - the first of the month - falls on a holiday in January. 29 December is the nearest working day that the SSA could bring payment forward to.
For the full lowdown on Social Security and SSI payment dates in 2024, let me recommend this piece by AS USA's Corina González and Oli Povey.
Social Security checks are not the only benefits that will be higher in 2024. Recipients of the SNAP food-stamps scheme, which is run by the US Department of Agriculture (USDA), are also getting a 3.2% cost-of-living adjustment.
Unlike the Social Security Administration, though, the USDA is implementing that increase right away.
The latest Consumer Price Index (CPI) report, which was released on Thursday, found that year-over-year core inflation was 4.1% in the US in September, down from 4.3% in August.
As Federal Reserve bosses prepare to meet at the end of October to decide whether they will raise interest rates, experts are predicting that the Fed will leave things the way they are.