Social Security's January adjustment delivered an unusual advantage this year. ...

Core Insights - Social Security benefits are crucial for over 70 million beneficiaries, with more than 53 million being retired workers, making it a necessity rather than a luxury [1] - In 2023, Social Security lifted 22 million Americans above the federal poverty line, significantly reducing the poverty rate for seniors aged 65 and above to 10.1% from an estimated 37.3% without the program [2] Cost-of-Living Adjustment (COLA) - The anticipated annual COLA for Social Security beneficiaries is a key announcement, with the 2026 COLA set at 2.8%, slightly above the 2.3% average increase since 2010 [3][7] - The 2026 COLA marks the fifth consecutive year of increases of at least 2.5%, a trend not seen since 1988-1997 [8] - The nominal impact of the 2.8% increase will result in an average monthly benefit for retired workers rising to $2,071, an increase of $56 [9] Inflation and Purchasing Power - The CPI-W, used to determine COLA, does not accurately reflect the inflationary pressures faced by retirees, leading to a 20% loss of purchasing power since 2010 [12][14] - The CPI-W primarily reflects the spending habits of working-age Americans, which differ significantly from those of retirees [13] Medicare Premiums Impact - Approximately 30 million retired-worker beneficiaries are expected to face a significant increase in Medicare Part B premiums, rising by 9.7% to $202.90 in 2026, which could negate the benefits of the COLA [18][20] - The increase in Part B premiums is attributed to rising healthcare costs and increased utilization rates [18]

Core Insights - The volatility of Social Security's cost-of-living adjustments (COLA) poses challenges for retirees, with the 2025 COLA at 2.5%, down from 3.2% in 2024 and 8.7% in 2023 [2][9] - Dividend stocks are highlighted as a solution for consistent income growth, providing a self-adjusting income stream that often outpaces official COLA adjustments [2][3] Company Summaries - **Johnson & Johnson (NYSE: JNJ)**: - Reports Q3 2025 revenue of $24.0 billion, a 6.8% year-over-year increase, with EPS of $2.80 exceeding estimates [4] - Maintains a 60-year track record of consecutive dividend increases, with a recent quarterly dividend growth of 4.8%, raising payments from $1.24 to $1.30 [5] - Net income surged 91% year-over-year to $5.15 billion in Q3, with fiscal 2026 sales guidance raised to $93.7 billion [5][6] - **Procter & Gamble (NYSE: PG)**: - Holds the longest dividend growth streak at 68 consecutive years, reporting Q1 fiscal 2026 revenue of $22.40 billion, up 3.1% year-over-year [7] - EPS of $1.95 topped estimates, with net income climbing 21% to $4.78 billion [7] - The company increased its quarterly dividend from $1.0065 to $1.0568 in 2025, reflecting a 5% raise [8] - **Realty Income**: - Offers monthly dividends with a yield of 5.58%, having paid consistently since 1994 [9] - **PepsiCo**: - Provides the highest yield among consumer stocks at 3.69%, with an average annual dividend growth of 6.8% [9]

Key Takeaways Between 2010 and 2024, COLAs increased recipients' Social Security benefits by 58%, while inflation increased seniors' expenses by 73% in the same time frame, according to research by The Senior Citizens League. As a result, millions of retirees are left trying to decide where to cut corners and where to stretch their dollar. "A low COLA, like the 2.7% being projected for 2026, will mean [retirees] are losing buying power and will need to scale back on expenses, dip into their savings more (if ...