Your Social Security faces a 22% cut

Good afternoon. The week's almost done, but the money news isn't slowing down. Here's what's worth your time before you head into the weekend.

On The Money Today:

Let's get into it.

After a rough 2022, the average 401(k) balance has climbed back to a new high this year. That kind of growth is exactly why a layoff so close to retirement carries real weight, one year's difference in when and how you claim your savings can be the gap between the plan holding up and falling short. Read Brian's story to see what it means for his 401(k) and Social Security.

One year. That's all that stood between Brian and the retirement he'd planned for decades, then the job was gone. He's got seven figures across his 401(k) and other accounts, so panic isn't the move, but the timing changes everything: how he claims Social Security, whether he pushes for a bigger severance, even whether unemployment makes sense this close to the finish line. The math looks different than he expected, and not all of it bad.

Why it matters: A ProPublica/Urban Institute study found 28% of stable, longtime employees sustain at least one damaging layoff between age 50 and retirement, and claiming Social Security even a year early locks in a permanent reduction, not a temporary one.

Racehorse ownership has always belonged to the ultra-wealthy: private stables, deep pockets, insiders only. MyRacehorse tore that gate down.

For as little as $100, you get a real fractional stake in a professionally trained Thoroughbred, the same caliber of horse that's run in the Kentucky Derby and the Preakness Stakes. You're not just watching the race from the couch: the app puts training updates, race-day access, and behind-the-scenes content in your pocket, so you're following the horse's actual journey, start to finish.

Brittany Hudson ran an Amazon delivery contract. Her partner worked inside an Amazon warehouse, approving vendors and invoices, and together they funneled nearly $10 million out of the company in six months. Out on bond, Hudson tried the same play again, forging a federal judge's signature to pull it off. That gamble turned a bad situation into a 16-year sentence with no parole.

Why it matters: The pair submitted more than 1,000 fake invoices before anyone flagged it, a reminder that fraud schemes run by someone with legitimate system access can go undetected for months.

Social Security's trust fund is set to run dry in 2032, and once it does, the program can only cover about 78% of what it owes. That's not a rounding error, it's a $500-a-month hit landing on more than 60 million retirees, with some states taking a bigger cut than others. The number on your own check isn't locked in yet, and how you claim can still move it in your favor.

Why it matters: Claiming at 62 instead of your full retirement age locks in a permanent 30% reduction on top of any future cut, while every year you delay past full retirement age adds 8% back, the opposite direction from where this shortfall is pushing benefits.

The correct answer is B) 40% — roughly 4 in 10 retirees rely on Social Security for at least half their income, according to the SSA. It's why the claiming decisions in today's issue carry more weight than most people realize.