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Kip Tips

12 Smart Ways to Spend Your Social Security COLA

Here are great ideas for retirees who want to put their 2015 cost-of-living adjustment to good use.

Retirees, if you haven’t already heard the good news, you’ll be getting more from Social Security next year. Beneficiaries will receive a 1.7% cost-of-living adjustment in 2015, boosting the average monthly benefit for a retired worker from $1,306 to $1,328.

SEE ALSO: How Much Social Security Benefits Will Rise in 2015

That $22 extra each month will add up to $264 over a year. It’s not a windfall, but the extra cash certainly will come in handy. In addition to covering everyday expenses, here are 12 ways retirees can best use their Social Security COLA increase.

Protect your identity. Scammers and identity thieves often target seniors. One way to prevent your personal information from falling into the wrong hands is to shred statements and other documents containing vital details such as account numbers after you no longer need them. A good cross-cut shredder costs about $100 (we found a Fellowes Powershred DS-2 model for $97.12 on It might also pay to enroll in a credit monitoring service that can help if you do become a victim of identity theft. For $14.99 a month, TrustedID will monitor your credit reports for suspicious activity, scan black-market sites for your Social Security, credit card and bank account numbers, help you cancel and replace stolen cards, and provide insurance to cover costs you incur after identity theft.

Make a wise investment. Kiplinger recently pinpointed nine stocks with significant growth potential. Among our picks is Facebook, which is now trading at about $80 a share. So you could buy three shares with the extra $264 in Social Security benefits, and have change left over. Or consider a great mutual fund you can begin investing in for just $100.


Modify your home to help you age in place. You can add a grab bar in a bathroom for about $100 to $175, including materials and labor, according to, a Web site that estimates home-improvement costs. Or you can replace doorknobs with easy-to-use lever-style handles for about $15 to $25 each for non-locking interior levers and $25 to $50 for lockable levers, according to the National Association of Realtors’

Take a defensive driving class. You can update your driving skills and perhaps even earn an auto insurance discount by taking a refresher course from organizations such as AARP and AAA. The AARP Smart Driver eight-hour online course is $17.95 for members, $21.95 for non-members. AAA offers defensive-driving courses starting at $19.95 for non-members in most states. AAA members can usually get a $4 discount, but check with your local AAA for exact pricing and availability.

Buy discounted gift cards. You can score instant savings by using discounted gift cards to purchase things you regularly buy. Gift card resale sites buy unwanted cards and sell them at a discount to face value. For example, we recently found a $250 CVS gift card selling for $225 at A good site to visit to see offers from several resellers is Gift Card Granny.

Write a will. If you die without a will, state law will determine who gets what from your estate. It doesn’t have to cost much to craft this important document. Downloadable forms are available from Web sites such as, which sells the Quicken WillMaker Plus for $59.99.


Purchase a home safe. You need a secure place to store important documents, such as a will. A fire-proof safe is the answer. We saw a two-hour fireproof Hollon safe for sale on starting at $234.

Fill gaps in your homeowner's policy. Most standard homeowners policies don’t include sewage-backup coverage, but you can purchase a rider that will pay for $10,000 to $20,000 of damages for about $50 a year. You might also want to boost your liability coverage with an umbrella policy, which is an inexpensive way to protect yourself from lawsuits. Insurers generally require that you have at least $300,000 in liability coverage on your home and automobile before you can buy umbrella coverage, which picks up after you’ve exhausted your homeowner and auto liability limits. You’ll pay about $175 to $300 a year for $1 million in umbrella coverage. For more information, see How to Add a Personal Liability Umbrella Policy.

Prepare for an emergency. Stock up before bad weather strikes so you can get by if the power goes out. For example, the Duracell DPP-300EP Powerpack 300 (about $135) will let you run small appliances and jumpstart your car. See our 7 Must-Haves for Your Emergency Kit slide show for more items that can come in handy when disaster strikes.

Buy a tablet computer. These lightweight, inexpensive alternatives to laptop computers can offer you access to the Web so you can send e-mails, keep up with family and friends on Facebook and even watch movies. Kiplinger’s pick for “best tech value” for a tablet is the Amazon Fire HD 6. The 8GB model sells for $99. Invest another $99 for a year's worth of Amazon Prime service so you can stream movies and TV shows from Amazon.


Preserve old photos. Scanning photos allows you to create digital copies that you can easily organize, archive and share with family. Good scanners start at about $200. For more information, see 6 Things You Must Know About Preserving Your Photos.

Fund a Roth IRA for your grandchild. Give your grandchild a jumpstart on retirement savings by helping him or her open a Roth IRA. Children of any age with earned income from a job -- even if it’s from lawn mowing or babysitting -- can contribute to a Roth. Schwab will let a parent open a custodial IRA for a minor for just $100. If you contribute just the $264 in extra Social Security benefits you get in 2015 and not a cent more, that amount will grow to $5,735 in 40 years (assuming an 8% return).