For elderly Americans suffering through this affordability crisis, every little bit helps. Inflation and tariffs have made everything more expensive, so a boost to your Social Security monthly checks is welcome, but it's no cure for what ails us.

 

Given that inflation is "officially" hovering around 3 percent per year, a 2.8 percent boost in cost-of-living adjustment (COLA) for 2026 is good news. This follows a 2.5 percent increase in 2025. The Social Security Administration estimates that the average retirement benefit will jump by $56 a month, from $2,015 to $2,071, starting this month.

 

From my point of view (and I am sure yours), this raise will in no way cover the spike in consumer prices we are feeling. But before you can even count the money, remember that the standard monthly premium for Medicare Part B is going to hit you with a 9.7 percent increase. That means you need to subtract this additional $17.90 from the COLA benefit, so the cost to cover doctor visits and other outpatient care will climb in January from $185 to $202.90.

 

What could help retirees even more will be the 2026 federal senior "bonus" deduction. For the coming year (returns filed in 2027), seniors aged 65 and older can claim a new but temporary tax break. The deduction you can claim for individual filers is up to $6,000 and $12,000 for married couples filing jointly. However, there are income limits on this deduction.

 

For a married couple, your Modified Adjusted Gross Income can be no higher than $150,000; for single filers, $75,000. If you exceed those levels, there is a phase-out scheme in which benefits are reduced until an Individual earns $175,000 and $250,000 for couples. These benefits can be claimed whether you itemize or take the standard deduction on your taxes.

 

In addition to the new $6,000 bonus, standard deduction amounts have also increased for 2026. What that means is that if you are filing separately, you can deduct $16,100 from your taxes, up from $15,759 in 2025. For married couples filing jointly, the new amount is $32,200. There is also an additional senior deduction for anyone over 65. If you file as a single, singles receive an extra $2,50, while married taxpayers or surviving spouses receive $1,650 each.

 

As an example, a married couple over 65 taking the standard deduction could potentially shield up to $47,500 from federal income tax ($32,200 standard deduction plus $3,300 additional senior deduction plus $12,000 from the "bonus" payment.)

 

The affordability crisis has affected seniors in many ways. Over one-third of seniors 65 and older were struggling with housing affordability. Over 12 million households were paying more than 30 percent of their income on housing, according to a Harvard University joint study.

 

The bottom 20 percent of Americans aged 60 and older have no assets, and many of them are in debt. Almost half have an average income below what they need to cover basic needs. Failing health is a constant fear for 60 percent of all older adults. Most cannot afford two years of in-home, long-term services and support. Over 80 percent do not have the resources to pay for long-term care or be able to weather financial emergencies.

 

The affordability gap has just gotten worse. And as we enter 2026, 22 million Americans, many of them seniors, especially early retirees who are not yet eligible for Medicare, are facing the end of the enhanced premium subsidies under the Affordable Care Act. Some face a doubling of health-care coverage costs as a result.

 

All in all, most seniors are facing dire straits in this country. Legislators seem to be oblivious to their predicament. Even their scant remedies are temporary at best, like the "bonus" credit to Social Security that expires in 2028. The majority in Congress wants to get rid of Obamacare but has no alternative to the out-of-control costs of our failing health system. 

 

They say we can’t afford Social Security or Medicare but are at a loss for a workable alternative. Will anything change in 2026? I doubt it.

 

In 2025, more than 1 million workers saved $2 billion-plus toward retirement through state-sponsored automated savings plans. Now, legislation introduced by a Massachusetts congressman would expand this program nationwide. Could this help solve the American savings crisis?

 

It is well known that American workers are not saving enough for retirement. Almost half of Americans have no retirement savings at all, according to recent surveys by AARP and Gallup. Low-income and older households are most at risk. Dependence on a bankrupt Social Security system is not the answer.

 

Congressman Richard Neal, a Democrat and a ranking member of the Ways and Means Committee, reintroduced the Automatic IRA Act. If passed, it could become a key way for nearly half of the private-sector workforce to begin saving for retirement. The concept is simple, and it works.

 

Neal, representing Western Mass and the Berkshires, was taking a leaf from the book of the 12 states that have already introduced some kind of automatic IRA worker deduction. Although state programs vary in detail, the basic premise is that they generally require employers to enroll employees in a state-facilitated IRA at a preset savings rate. Typically, workers have 3-5 percent of their paychecks automatically deducted and invested in a Roth IRA. In some cases, contributions are increased each year until they reach 10 percent of earnings.

 

The programs are typically available to individuals who don't receive employer-sponsored retirement benefits. Neal's new bill would require employers with more than 10 employees who do not sponsor a retirement plan to automatically enroll their employees in an IRA or another tax-deferred plan, such as a 401(k).

 

Oregon established the first such account back in 2017. Since then, the notion has caught on with saver and employer participation numbers steadily increasing. It took state programs six years to reach the billion-dollar mark, but just 18 months to double it. It helped that the market performance has been stellar. The record stock market rise spurred a 25 percent increase in savings accounts and higher average savings rates.

 

Many small business owners don't offer retirement benefits. Only about seven out of 10 workers in the U.S. have access to either a defined contribution or defined benefit pension plan, according to the Congressional Research Service. That means that 56 million workers can't take advantage of tax-deferred benefits at work.

 

The auto IRAs solve this problem. Small businesses that employ service and other workers in high-turnover industries such as leisure and hospitality have struggled to provide retirement benefits to their employees. The automatic IRA program, at least on the state level, provides a no-cost option for employers without the resources or time to offer a private retirement savings plan. The congressional plan would likewise offer small-business employers an auto tax credit, making its implementation cost-free.

 

Sounds good, doesn't it, but instilling the desire to save for retirement among workers is a daunting task. Many employees who do have access to plans don't take advantage of them. Only 56 percent of all workers and 53 percent of private sector workers participate in a plan. From my experience, many of those workers chose to spend their paychecks and not worry about the future, especially among those in younger generations. Others don't want to be bothered or suffer from inertia or confusion.

 

However, research shows that people are far more likely to save for retirement if they can set aside money automatically, through payroll deductions. I often urged new clients with an employee savings plan to contribute a set amount automatically. Sort of a set-and-forget-it approach.

 

"But what if I can't live on what's left?" they would say. "Give it three months," I would answer. By then, most workers found that they could adjust quite easily to the 3-5 percent deduction. What's more, after making a little money from their investments, the protests quieted down.

 

In this Congress, some may say there are bigger fish to fry, but that is, in my opinion, short-sighted. Anything that encourages Americans to save more is truly a gift, and something politicians on both sides should be able to agree upon.

 

Last week's half-point interest rate cut by the Federal Open Market Committee, overshadowed what I believe is an even more important development. The Fed has kicked off a series of what they called "reserve management purchases" by committing to buy $40 billion per month in short-term Treasury bills and notes.

 

In essence, the Fed is expanding its balance sheet by buying these securities. They were quick to point out that this was not the beginning of a quantitative easing program, which is aimed at explicitly stimulating economic activity, although it has the same impact on financial markets. In essence, the Fed is providing a steady stream of additional liquidity to markets.

 

Why is that so important? More liquidity means banks, corporations, stock and bond market participants, even Mom and Pop to some extent, can borrow more, buy more, and invest more. It will also influence the direction of interest rates on the short end of the yield curve.

 

The Fed's reserve balances (the amount they own in Treasuries and the like) are huge but have declined over the past three years, now totaling $2.8 trillion. Low bank reserves can sometimes cause short-term funding pressures in the financial system, but it's hard for me to believe that with that much money sloshing around the system, there should be any difficulty at all in the credit markets.

 

Some economists say what the Fed is doing makes sense because if they expect additional economic growth in 2026, demand for reserves will need to grow as well. The Fed's action will also benefit bond yields across the board. Short-term yields dropped immediately after the announcement, but over time, even longer-dated bonds such as the U.S. 10-year Treasury bond may also decline. Investors believe the odds of another Fed interest rate cut in the first half of next year are low, at least until the new Federal Reserve Chairman takes office. However, I'm guessing the continued monthly injections of funds by the Fed will have a similar easing impact on the economy as another rate cut.

 

The additional liquidity should also contribute to the traditional Santa Claus Rally that occurs in the last few weeks of the holiday season. It is a time when bonuses are paid, contributions are made to savings accounts, and central banks provide additional liquidity. Some of those cash flows end up in the equity markets.

 

Given that I am not an economist nor a monetary expert, forgive me if I go out on a limb here. Our national debt is off the charts, at more than $39 trillion. Accepted wisdom holds that to reduce debt, a combination of spending cuts, tax reforms, and economic growth strategies is essential.

 

The last time I looked, this government is increasing spending and reducing taxes. And while the administration is attempting to increase growth, it is still nowhere near the rate necessary to impact our debt. That leaves either default or monetizing government debt. A U.S. default would bring down the world's financial system, so I don't think that is a viable option, which leaves monetization.

 

Monetization is the permanent increase in the monetary base to fund the government. Any government that issues its currency can create money without limit. Monetization occurs when a central bank buys interest-bearing debt with non-interest-bearing money. It is a permanent exchange of debt for cash.

 

For a simpleton like me, what I see is this: The U.S. Treasury auctions off billions in short-term debt each month to fund our debt. As of Dec. 12, the U.S. central bank is now purchasing those same securities in the open market. The net result is that the interest rates the U.S. will pay for these new obligations will be lower. The government will be selling short-term paper while simultaneously buying it back. Are we seeing the first trial balloon of things to come?

 

The only difference between what the Fed is doing now, and monetization is the question of permanency. The Fed has not given the markets any indication of how long its government purchases will continue. And no one has even mentioned the "M" word. That is understandable given that fears of money printing would trigger a collapse in the dollar and skyrocketing gold.

 

I will be curious to see how and what the new Fed chief and his committee will do in May 2026. Will they extend this program or even increase its purchases. Will the U.S. Treasury continue to only auction short-term paper now that they have found a ready buyer? Questions aplenty, to keep me watching and writing.

 

Whether you know it or not, Americans are drinking less. This year, the percentage of Americans who say they drink alcohol has fallen to a record low. But don't kid yourself, 54 percent of Americans said they still do drink booze, according to a recent Gallup poll, which has been tracking U.S. drinking since 1939.

 

I can hear Bill Wilson, the father of Alcoholics Anonymous, cheering from his grave. The trend of easing off the booze has been in place for several years among some segments of society. Health-care concerns are reportedly spooking the population. It used to be that "one or two drinks a day" was OK. I'm sure the liquor companies lobbied hard for that verdict, but the attitude has reversed. Thanks to recent research, alcohol at any level could be hazardous to your health, exposing consumers to an increased risk of cancer, depression, and anxiety.

 

And as usual, it is the younger generations that have paved the way. Their abstinence evolved a decade ago and has now settled at an even 50/50 this year among 18- to 34-year-olds. This compares to 56 percent among older Americans. At first, I suspected that youngsters simply switched from one drug to another, like marijuana, but the research says that ain't so. Marijuana use is higher than it was before it was legalized, but grass consumption today has seen a steady decline over the past four years as well.

 

Researchers believe that COVID-19 had something to do with the declining trend in alcohol intake. During the pandemic, alcohol consumption skyrocketed, especially among older adults. Fear, boredom, and isolation triggered excess drinking. Their children were locked down with adults, and they witnessed their parents lose control due to their daily drinking.

 

The government launched an education campaign warning of the impact of excessive drinking and advising on how to stop, or at least moderate, drinking. The media chimed in, especially on social media, and before long, there was a generational shift in perception from drinking is "OK" to "not OK."

 

The thinking went from it might still be acceptable to drink, but losing control in public was a sure way to be filmed on a hundred phones and posted on social media in minutes. That would be devastating and avoided at all costs. It is no longer cool to drink, especially in excess to the point of inebriation, because that was what parents did.

 

But there were other reasons as well. Although beer is still the beverage of choice among the population, youngsters did not want to be seen drinking something their parents consumed, like craft beer. Besides, alcohol in any form has become too expensive for many.

 

With all this new adverse research data, one would think that both the beer and liquor industries would be sucking wind. They are, but the trend is still not life-threatening. In fact, on average, according to IWSR, a global leader in alcohol beverage data, the overall number of drinks U.S. adults have per week has not changed in decades, hovering between 10 and 12 since 1975. They did admit that it was the lowest level in 30 years.

 

To survive, the beer industry is busy stabilizing its customers' consumption through marketing and advertising, while at the same time looking to the future. They are shifting along with consumer habits by rolling out nonalcoholic versions of their leading beer brands. Beer volume has been flat or declining since 2007. It is only growing by a mere 1 percent on average, but that is better than wine and the hard stuff.

 

The wine and hard liquor sector has had mixed results. Wine volumes this year have been in decline, experiencing over an 8 percent decline in both volumes and revenues. The spirits side of the beverage industry has suffered slightly fewer declines. But there are bright spots. tequila and mezcal, for example, are performing well, as are sales of ready-to-drink alcoholic beverages.

 

Of course, one should expect the industry to counterattack, and they are. Talker Research (on behalf of Josh Cellars, a wine producer) announced survey results in November. Of 2,000 Americans aged 21-44 polled, they found that 77 percent expect to drink the same amount or more alcohol during the holidays this year.

 

They also reported that nearly 80 percent of Gen Z and millennial respondents (who drink) will consume more alcohol during the holidays than at other times of the year. Well, good for them. After all, I can see the desire for sipping a hot toddy as "A Christmas Carol" plays in the background or toasting the New Year while watching the ball drop in Times Square.

 

However, overall, I applaud the younger generations for becoming a lot smarter and much sooner than we Baby Boomers. For me, I raise my glass of sour cherry juice and say, "Here's looking at you, kid."

 

The COVID-19 pandemic was supposed to spell the end of the cruise line industry. These massive ships, crammed with sick passengers, were labeled "petri dishes" by the media, infectious disease experts, and politicians. Six years later, the sector is alive and growing.

 

AAA projects that a record-breaking 21.7 million Americans are planning to hop aboard an ocean cruise in the coming year. If so, that would mark the fourth year in a row the cruise industry has experienced record passenger volume. This year, more than 20 million passengers flooded the gates to new King Kong-sized vessels, offering fixed-price packages and promising a wide variety of cruise options for every age and pocketbook.

 

If you break down the demand demographically, Baby Boomers still make up the majority of cruise-goers, followed by Millennials. Most adults travel with a companion. Nearly 50 percent of U.S. cruise passengers are cruising as a couple.

 

About 65 percent of adult passengers are 55 or older. However, 27 percent are from younger generations (35 to 54 years old), and 7 percent are aged 18 to 34. The trend also includes multi-generational groupings who choose to take cruise vacations together. One quarter of Baby Boomers who like cruises do so with their adult children, and roughly 29 percent of Gen Z members cruise with their parents.

 

A survey identifying trends shaping the modern cruise experience found that Millennials and Gen Z are increasingly enthusiastic about opting for a cruise vacation. Key among the changes in attitude was the affordability of shorter itineraries, which allow younger generations to vacation more frequently. They much prefer a 2-to-4-day sailing to the more traditional 5-to-7-day voyage.

 

The Caribbean remains the most popular destination, attracting 72 percent of American cruise passengers. As a result, Florida ports are the busiest in the world due to this vacation demand. The new mega-vessels ply the Caribbean, Mediterranean, and Northern European waterways. Smaller vessels are more common in Northern Europe for expedition cruises and in the Mediterranean for luxury trips.

 

More than half of the 4,500 people surveyed had already cruised, and nearly 30 percent planned to do so again over the next two years. Of those planning another cruise, 36 percent were born between 1981 and 1996. The average age of a cruise guest is now 46 years old, and 36 percent of all cruisers are now under 40.

 

Cruise lines have quickly adjusted to these preferences and begun marketing 3- to 5-night cruises. Another popular consumer preference is the chance to visit a private island. Cruise lines are investing big bucks to create this type of destination or upgrade existing ones. Cruise operators know that the main draw for vacationers is convenience and value, especially today.

 

As such, cruise companies bundle lodging, meals, and entertainment. The price often equates to a lower per-night cost than on a land-based vacation. Celebrity-level chefs and Broadway-level shows have replaced the rubber chickens and crew member chorus offerings of yesteryears.

 

Modern-day ships are increasingly resembling ocean-going resorts, complete with floating buffets and satisfied customers—couples like the built-in date-night dining and entertainment options. Families appreciate the kid clubs, water parks, and multi-room lodgings. An expanding list of destinations, such as a cruise to Antarctica or the Arctic, excites and attracts younger adventure seekers.

 

More than 90 percent of U.S. cruise passengers rate their experience as good or very good, according to AAA, and 91 percent have taken multiple cruises. With those kinds of repeat rates, cruise lines expect growth to continue well beyond the next few years. Wall Street likes what it sees and has rewarded these companies with higher stock prices. Rather than rest on their laurels, cruise companies worldwide are expanding their fleets, building destination islands, and upgrading their offerings hand over fist.