🗞️ How secure is Social Security?

Welcome to the Friday edition of MoneyNerd!

What we have for you this week:

Rick here. Let’s talk about Social Security — what’s new for current beneficiaries, and the outlook for those who just hope there’s something left when they’re ready to clock out for the last time.

If you get Social Security today, you’ll get more next year — 3.6% more, to be precise. That’s the upshot of the 2027 cost-of-living adjustment announced this month. It works out to an extra $75 per month for an average recipient. Your results may vary.

By design, that’s barely keeping up with inflation (September’s CPI: 3.7%). For those who rely on Social Security for the bulk of their income, times will remain tight, even with the bump. 

If you’re a ways off from retiring, the future of Social Security is less certain. No doubt about it  — but it may not be as serious as many people believe.

✅ The fact: Social Security costs more than the program collects in taxes, and the trust fund intended to bridge that gap is dwindling — to the point where the fund is projected to be empty by 2032. 

✅ What that means: It means that if Congress doesn’t act in the next few years, current and future recipients will receive less than their designated benefits. If Congress does nothing, recipients will receive 78% of their benefits. If Congress allows a simple accounting change, the date moves back to 2034 before reductions kick in.

✅ What that doesn’t mean: It doesn’t mean that Social Security will stop issuing checks completely, a common misconception. A recent AARP survey found that “only 32% of older adults correctly understand that if the Social Security trust fund is depleted, retirement benefits would only be reduced, not eliminated.” There will be something in retirees’ checks for the foreseeable future.

Small comfort? Perhaps. There are a variety of bills in Congress intended to address aspects of the issue before 2032. None of them appears likely to advance in the current climate, but Social Security is a popular program and a near-future Congress will need to dive in.

Meanwhile … save for retirement, kids. Here is NerdWallet’s retirement calculator if you want to run the numbers. 

✅ Looking for a financial advisor? See which companies impressed our reviewers.

- Abby Doyle, mortgages writer

Lately, I’ve been thinking about a question that doesn’t fit neatly into a mortgage calculator: What’s the financial value of living near the people who show up for you?

According to a new survey from Neighbors Bank, 44% of homeowners wish they lived closer to family, and 42% would make a trade-off — such as buying a smaller home or taking on a longer commute — to do it.

Earlier this year, my sister-in-law moved back to Pittsburgh after 15 years in Los Angeles. Now she’s five minutes away. She lets my dog out when I’m catching a late concert in the city; I’m on cat-sitting duty when she travels for work. It’s hard to put a dollar figure on that kind of support, but it matters.

You’ve seen the headlines: Home prices are high, and choices are limited. But even a home that fits your budget can come at an invisible cost to your well-being. Building equity is great, but what good is it if you feel lonely instead of feeling at home?

Fewer houses to choose from shrinks the map of possibilities, too: the neighborhood near your friends, the town where your parents could help with a new baby, the community where you already belong. For a generation already priced out of many neighborhoods, it can feel like we’re being asked to choose between buying an affordable house and building a connected life.  

When you’re weighing where to live, don’t stop at the home price and monthly payment. Think about the full cost of the life you’d build there. A home near friends or family might mean help with pet sitting, rides to the airport, backup in an emergency — or simply more Tuesday-night potlucks. For people who need childcare or elder care, having help nearby can change the math in a much more obvious way. 

Are high home prices forcing you to rethink where — or how — you want to live? I’m looking to talk with readers for future NerdWallet stories. Email me at [email protected].

- Samuel Taube, lead investing writer

The Nasdaq 100 index is down more than 7.25% since Oct. 6. What’s spooking investors out of tech stocks? In short: Investors are getting worried that the AI industry can’t afford its credit card bill.

Big Tech is, for the most part, a grouping of companies that make huge profits; Nvidia, Alphabet and Microsoft all take in far more money than they spend. And in recent years, those companies’ share prices have been flying high on AI-related investor enthusiasm. But these companies earn their profits from more than just AI stuff. Is AI itself profitable? That’s a more complicated question. 

Leaked financial documents from the leading AI labs, OpenAI and Anthropic, show that both companies lost tens of billions of dollars last year. CoreWeave, a company that builds data centers and sells that computing power to the big AI labs, can’t seem to turn a profit, either.

If you can’t turn a profit, you borrow. And you pay interest at a rate that is set by the market based on economic conditions. And therein lies the AI industry’s problem. 

Persistent high inflation will likely force the Fed to raise benchmark interest rates again in the next few months, and it implies that rates could stay high for some time. And that means that the cutting-edge of the AI industry might be looking at hefty interest expenses for years to come.

The aforementioned CoreWeave, which is one of Nvidia’s biggest customers, saw its bond yields spike to almost 15% after the latest CPI report, reflecting rising investor anxiety that the company could default on its debts.

But there’s a silver lining here for more old-school investors: Traders are dumping tech stocks and piling into “boring” consumer staples companies. The Dow Jones Industrial Average, which is less tech-heavy than the other big stock indexes, has posted positive returns over the last few weeks, and funds that track consumer staples stocks have been doing especially well.

Another upside: Higher interest rates also mean higher yields on many savings products. Nowadays, many brokerage accounts let you park uninvested cash in something like a high-yield savings account, letting you grow it while you wait until you’re ready to invest it. Check out our roundup of the best brokerage accounts for high interest rates to learn more.

- Kate Ashford, lead wealth writer and spokesperson

If you keep an electronic calendar, watch out: Scammers are using email notifications to add calendar invites to your schedule, encouraging you to click. 

What you might see: A “missed voice message” or “a new voicemail is available for playback” event on your calendar, potentially from someone you don’t know. It might also be an invite to a fake meeting or a reminder to complete a form with sensitive information. 

What to do: Don’t click links, download files, call numbers or respond Yes, No or Maybe. If you recognize the organizer but the invite is unexpected, contact them directly to see if it’s legit. Report the event as spam if your calendar allows.

How to prevent it: 

Speaking of scams … in the news segment of this week's Smart Money podcast, senior news writer Anna Helhoski speaks with Eva Velasquez, outgoing CEO of the Identity Theft Resource Center, about how scams and fraud have evolved over her 40-year career. They discuss the growing risks posed by AI, the challenges victims face and where progress has been made.

Watch below.

For the full episode:

Check out more NerdWallet podcasts.

The cost of living, lifestyle creep and the rising cost of socializing are making an ordinary day out surprisingly expensive. We track a $100 afternoon in New York City and explore why affordable third places are disappearing, how gym memberships and private clubs sell access to community, and what the loneliness epidemic has to do with your budget. 

Here’s what NerdWallet’s news team is tracking in economic news and data for the week of Oct. 26:

Tuesday, Oct. 27.

Conference Board’s Consumer Confidence report for October

Why it matters: Shows how confident consumers are about the economy and their financial outlook.

Wednesday, Oct. 28:

Fed rate decision

Why you should care: The Fed’s decision on the federal funds rate can affect how much you pay to borrow money with things like credit cards, personal loans and mortgages. It can also influence how much you earn on savings.

Thursday, Oct. 29:

Gross domestic product (GDP), 3rd quarter 2026

Why you should care: GDP measures the health of the economy. Growth generally signals a strong economy, while two consecutive quarters of shrinking GDP can signal a recession.

Personal Consumption Expenditure (PCE) for September 2026

Why you should care: The PCE is one inflation indicator. Monetary policymakers consider a low, stable inflation rate to be the mark of a healthy economy. 

Your MoneyNerd team: Anna Helhoski and Rick VanderKnyff.

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