What the experts say
The hunt for higher interest
“At long last, banks are becoming a little more generous with savers,” said Gail MarksJarvis in the Chicago Tribune. Interest rates on savings accounts have been slowly creeping up for months, but “you are going to have to hunt” for the best deals. Start your search with online banks. The interest on savings accounts at some e-banks is currently about six times higher than the average 0.185 percent that brick-and-mortar banks are advertising. The online-only Dollar Savings Direct, for instance, recently offered 1.4 percent. E-banks “may have unusual names, but as FDIC-insured institutions, your money will be safe up to $250,000.” Watch out for “constantly fluctuating rates,” though. A high promotional rate may expire after a number of months, so be careful to read all the fine print.
MyRA program gets the ax
The Trump administration is ending a retirement-savings program designed for people without access to 401(k)s, said Kate Davidson in The Wall Street Journal. The Treasury Department announced last week it would wind down the “myRA” program—launched under President Obama in 2015 for workers who did not have workplace savings plans—because demand for the accounts was “extremely low.” About 20,000 myRA accounts have been opened in the past two years, with workers contributing a total of $34 million; the median account balance is $500. An additional 10,000 accounts have been opened, but their owners have not made contributions. Managing the program has cost the government nearly $70 million so far. “The cost to taxpayers cannot be justified by the assets in the program,” said U.S. Treasurer Jovita Carranza.
A raise for Social Security recipients
Good news for Social Security beneficiaries: You’ll soon get your “biggest raise in six years,” said Paul Davidson in USA Today. Seniors can expect a 2.2 percent cost-of-living increase in 2018—the highest since 2011. The bump means the average beneficiary will get about $30 a month extra, “a relative bonanza” compared with the 0.3 percent adjustment for 2016, which left checks largely unchanged. There was no increase at all in 2015. Adjustments have been tiny or nonexistent in recent years because of unusually low inflation. The trustees who oversee Social Security also released their annual warning about the program’s long-term health, projecting that the Social Security fund would be depleted by 2034.