The Social Security cost-of-living adjustment (COLA) for 2026 settled at a puny 2.8%, marking one of the smallest adjustments in recent years, but higher than last year’s 2.5%. This follows an 8.7% COLA in 2023 when inflation spiked after COVID disruptions, representing a significant decline from that peak. The adjustment is determined by comparing inflation data from the third quarter of one year to the same period the previous year, and with inflation cooling considerably from its post-pandemic highs, the corresponding benefit increase has naturally moderated. While the COLA has averaged about 3.1% over the past decade, the 2026 figure sits below this average, and it sure will not be enough for Boomers and retirees to pay the bills, especially with Medicare Part B coverage increasing by 11.6% in 2026.
Unlike open-end mutual funds, exchange-traded 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. Three of the most conservative are perfect ideas for Baby Boomers looking to augment Social Security income.
SPDR Bloomberg 1-3 Month T-Bill ETF
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 U.S. Treasury public obligations with a remaining maturity of 1 month or more but less than 3 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 one and three 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 4.13% distribution yield and a monthly dividend/interest payment of $0.31. Investors need to know that the ETF’s price will drop by that amount when the dividend is paid, but at $91.30 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 considerable principal loss. BIL is extremely light on both interest rate and credit risk, focusing on zero-coupon U.S. T-Bills with maturities of less than three months. This makes it one of the lowest-risk investments available.
Schwab U.S. Dividend Equity ETF
Considered the “gold standard for dividend funds” by Morningstar, Schwab U.S. Dividend Equity ETF (NYSE: SCHD) tracks the Dow Jones U.S. Dividend 100 Index, focusing on the quality and sustainability of dividends by investing in stocks selected for fundamental strength, as measured by financial ratios. It’s designed for investors seeking both income and long-term stability.
Key Statistics:
- Current Dividend Yield: 3.74%
- Expense Ratio: 0.06% (extremely low)
- Assets Under Management: Over $70 billion
- Number of Holdings: 103 individual holdings
- NAV = $27.69 (trades at a discount)
Dividend Frequency: Quarterly.
iShares Core U.S. Aggregate Bond ETF
This top fund includes investment-grade U.S. Treasury bonds, government-related bonds, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, and asset-backed securities that are publicly offered for sale in the U.S. Social Security Administration. The top holdings in iShares Core U.S. Aggregate Bond ETF (NYSE: AGG) are primarily U.S. Treasury notes, with the top 10 holdings accounting for just 6.8% of total assets, indicating excellent diversification.
Key Statistics:
- Current Yield: 3.82%
- Expense Ratio: 0.03% (extremely low)
- Assets Under Management: $135 billion
- Number of Holdings: 12,960 securities
- Dividend Frequency: Monthly
- NAV = $99.79
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