In Your Money This Week, Andrew and I took a short break from weekly market recaps and economic data to fix a problem plaguing anyone who pays into Social Security and expects to benefit from it in the future. That’s right, we’re fixing Social Security.
The Social Security Trust fund is expected to run out in 2032, meaning benefits would be covered only by incoming payroll taxes, leading to a benefit shortfall of 23%.
That’s obviously a significant problem, particularly for retirees who rely heavily on Social Security. But there’s another side to the story that gets less attention: Social Security is fixable.
This week, Andrew and I used an online Social Security reform tool that allows you to combine different policy changes and see how much each one improves the program’s long-term finances. We each built our own proposal, choosing among changes to taxes, benefits, retirement ages and other parts of the program.
The exercise illustrates something important. There isn’t one magic solution, but there are multiple and relatively painless ways to close the funding gap. Social Security’s financial challenge is a political problem not a math one.
And with our political system challenged right now to do the right thing, you need to build retirement plans and claiming strategies that account for this potential shortfall.
There is also a broader fiscal issue here.
Social Security is one contributor to the federal government’s long-term financial challenges and the country’s rising debt-to-GDP ratio. What’s particularly frustrating is that, unlike some of the more difficult problems affecting the federal budget, Social Security has identifiable policy levers that can improve its finances. The longer policymakers wait, however, the fewer attractive choices they may have and the more abruptly changes may need to be implemented.
Andrew and I get into this and more in this week’s Your Money This Week video.
This week’s Weekly Reads and Book Recommendation are below.
Weekly Reads
Why Are US Mortgage Rates So High? What Would Lower Them? by Bloomberg
Mortgage rates remain elevated because inflation has stayed stubbornly high and the Iran war has added new inflation pressure, keeping longer-term interest rates from falling as many homebuyers had hoped. Higher borrowing costs have made homes less affordable, limiting purchasing power and keeping many existing homeowners with low-rate mortgages reluctant to sell, which constrains both demand and supply. For households considering a move, the key issue is that meaningful mortgage-rate relief depends on inflation and longer-term rates declining, making it difficult to count on substantially cheaper financing in the near term.
Commercial Real Estate Mid-Year Outlook by Wells Fargo
Commercial real estate has been surprisingly resilient in 2026 despite higher long-term rates, with transaction volume up 23% through June, lending still expanding, and demand improving across most major property types. High financing and construction costs remain a headwind, but they’re also sharply limiting new supply, which could help vacancies and rents as demand remains sturdy. Conditions vary by sector—apartments, offices and industrial are showing signs of stabilization or recovery, retail remains supply-constrained, and data centers continue to benefit from strong AI-related investment
A closer look at the price corrections in second-home housing markets Naples and Sevierville by ResiClub
Naples home prices are down 11.8% from their 2022 peak, with condos experiencing a much steeper 18.4% correction versus 9.2% for single-family homes, following a pandemic boom that pushed prices up 74% from late 2019 to mid-2022. The correction has been driven by fading migration, higher condo assessments and HOA costs, hurricane impacts, increased housing supply, and rising insurance costs, but it has also reduced estimated overvaluation from 54% in 2022 to 16% today. Conditions may now be stabilizing: inventory is down 19% year over year and annual price declines have moderated from 7.0% to 4.6%, suggesting some of the excess has been worked off and downside risk has eased.
Midterm Election Year Special by BlackRock
Midterm election years have historically been weaker and more volatile for stocks, averaging a 7.5% return and a 20% maximum drawdown, although markets have tended to rebound strongly after those declines and the year following the midterms has historically been strong. Republicans enter 2026 with a 53–47 Senate majority, but the president’s party has lost House seats in 20 of the past 22 midterms, while declining presidential approval creates another potential headwind. This year’s strong market momentum is encouraging historically: in midterm years that began with a negative first quarter like 2026, stocks subsequently gained an average 8.5% over the final three quarters, and the strong rebound already experienced this year fits that pattern. Consumer sentiment is at a record low, but the historically wide gap between Republican and Democratic sentiment shows how heavily political views are influencing perceptions of the economy, while previous extreme sentiment lows have actually been followed by strong stock returns. Most importantly, stocks have compounded wealth under both Democratic and Republican presidents, and investors who stayed invested dramatically outperformed those who moved in and out of the market depending on which party controlled the White House.
A ‘Middle of the Road’ July CPI Likely Gives Fed Breathing Room on Rate Hikes by Morningstar
July inflation landed in a middle ground: price pressures remain above the Fed’s target, but the data were not hot enough to strengthen the case for additional rate hikes. Goods inflation remained relatively contained while services and housing continued to keep underlying inflation elevated, suggesting progress toward 2% will remain gradual. The result gives the Fed room to keep rates unchanged for now while waiting for clearer evidence that inflation is either reaccelerating or moving sustainably lower.
How to Tell Whether Your Financial Plan Is Working by Savant Wealth
A financial plan is working when you’re making measurable progress toward your goals—not simply when your investment portfolio is performing well. Useful signs include maintaining adequate cash reserves, saving enough for retirement and other priorities, keeping debt manageable, and having appropriate insurance and estate planning in place. Regularly revisiting those measures as your finances and goals change can show whether you’re on track or need to adjust your saving, spending, investing, or planning decisions.
Book Recommendation
The Buffalo Hunter Hunter by Stephen Graham Jones
A diary, written in 1912 by a Lutheran pastor is discovered within a wall. What it unveils is a slow massacre, a chain of events that go back to 217 Blackfeet dead in the snow. Told in transcribed interviews by a Blackfeet named Good Stab, who shares the narrative of his peculiar life over a series of confessional visits. This is an American Indian revenge story written by one of the new masters of horror, Stephen Graham Jones.
