The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, which will benefit approximately 75 million Americans receiving Social Security and Supplemental Security Income payments. This increase translates to an average monthly boost of about $56 for Social Security retirement beneficiaries starting in January 2026, with SSI recipients seeing their increased payments begin on December 31, 2025. The 2026 COLA of 2.8% represents a slight increase from the 2.5% adjustment in 2025, though it remains below the 3.1% average COLA over the past decade. The adjustment is designed to help benefits keep pace with inflation and reflect current economic conditions, ensuring that Social Security continues to provide financial security for retirees and other beneficiaries as living costs evolve.
The reality for Boomers and seniors is that a 2.8% increase hardly covers the sticky inflation that continues to hang around the 3% level. For anybody who has been to the grocery store lately and checked out meat prices, they would tell you that $56 per month might barely cover four ribeyes at today’s prices. So, what is the best suggestion for Boomers looking to generate more income without risking any principal?
We screened our 24/7 Wall St. principal-protected investment database, looking for ideas that pay more than the 2026 COLA increase but are safe and protect investors’ hard-earned nest eggs. Five top ideas hit our screens, and all yield more than 2.8% safely.
Exchange Traded Treasury Bill Funds (ETFs)
Unlike open-end mutual funds, ETFs trade on major exchanges like stocks. They own financial assets, such as stocks, bonds, currencies, and debt, as well as commodities, such as gold bars. One significant advantage ETFs have is that they can be bought or sold at any time the markets are trading. In addition, there is a large market and strong investor demand for exchange-traded funds.
One of the funds we highly recommend at 24/7 Wall St. is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE: BIL | BIL Price Prediction). The fund invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the adviser determines to have economic characteristics substantially identical to the financial characteristics of the securities comprising the index. The index measures the performance of public obligations of the U.S. Treasury with a remaining maturity of one month or more but less than three months.
The State Street website says this when describing the fund:
- The SPDR Bloomberg 1-3 Month T-Bill ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg 1-3 Month U.S. Treasury Bill Index
- Seeks to provide exposure to publicly issued U.S. Treasury Bills that have a remaining maturity between 1 and 3 months
- Short-duration fixed income is less exposed to fluctuations in interest rates than longer-duration securities
- Rebalanced on the last business day of the month
The fund currently pays a 3.70% yield and a monthly dividend/interest payment of $0.28123. Investors need to know that the ETF’s price will drop by that amount when the dividend is paid, but at $91.61 at the time of this writing, that is a tiny amount each month.
With a tiny 0.14% expense ratio and daily liquidity, it is perfect for those who can’t afford a massive loss of principal.
High-yield money market funds (HYSA)
A high-yield money market fund, or high-yield savings account (HYSA), is an investment that aims to generate income while keeping the principal relatively stable and liquid. It is considered a low-risk investment and can have higher interest rates than savings accounts. Money market funds invest in short-term securities, such as government securities, commercial paper, and corporate debt.
They are intended to be safe and not lose value. Best of all, you can withdraw cash from a money market fund without penalties. In addition, they pay interest monthly and are insured by the FDIC up to $250,000.
Here are the rates from some well-known companies that we recommend:
- American Express High Yield Savings: 3.40%
- PNC Bank High Yield Savings: 3.53%
- CIT Bank Platinum Savings: 3.75% on balances of $5,000 and more
Open-End Mutual Funds
An open-end mutual fund is a type of investment fund that allows investors to buy or sell shares at any time, based on the current net asset value (NAV) of the fund, essentially meaning new shares are created when investors want to buy in, and shares are redeemed when investors want to sell out, providing continuous liquidity compared to closed-end funds with fixed entry and exit points; this makes open-end funds highly accessible for investors to enter and exit as needed.
Both closed-end and open-end funds provide efficient investment options. Closed-end funds trade on exchanges throughout the day, while open-end funds are typically redeemed or bought at net asset value once daily.
We recommend the BlackRock Liquidity Funds – FedFund (BFCXX), which currently yields 3.71%. The fund maintains a $1 net asset value and can be bought and sold daily.
The BlackRock website says this when describing the fund:
FedFund invests at least 99.5% of its assets in cash, U.S. Treasury bills, notes, and other obligations issued or guaranteed as principal and interest by the U.S. Government, its agencies, or instrumentalities, and repurchase agreements secured by such obligations or cash. The Fund’s yield is not directly tied to the federal funds rate. The Fund invests in securities maturing in 397 days or less (with certain exceptions), and the portfolio will have a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. The Fund may invest in variable- and floating-rate instruments and transact in securities on a when-issued, delayed-delivery, or forward commitment basis.
U.S. Treasury Bonds
Look at the short end of the Treasury market. The two-year note, like all Treasury debt, is guaranteed by the full faith and credit of the United States and yields a solid 3.50%. The shorter three-month T-bill yields 3.65%. Note that shorter government debt of a year or less is bought at a discount and matures at full value instead of paying interest. They work the same way if you had a savings bond as a kid. Treasury bills and bonds can be bought through banks and brokerage firms.
Certificates of Deposit
Certificates of deposit (CDs) are insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency that protects deposits in U.S. banks. The FDIC insures up to $250,000 per depositor per insured bank. In other words, you can have multiple CDs at different banks, each with up to $250,000 in insurance.
The best current rates for a one-year CD were at 4%. Longer-term CD yields range from 4% to 4.10% with a minimum deposit of $500. It’s important to remember that many banks charge a penalty for early withdrawals, so if you have an emergency and need to get your money, you may receive less back than you put in. Make sure the terms are clear when you purchase one.
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