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When you’re saving for retirement, one of the general rules of thumb is the longer you have before you stop working, the more risk you can afford to take.

In other words, if you have more time to ride out the stock market’s ups-and-downs and potentially grow your wealth, you should probably keep more of your money invested in stocks. When you get closer to retirement, it’s safest to pare back riskier holdings, keeping more in cash.

But new data from retirement services firm Empower shows the exact opposite is happening: Cash is king for twenty-somethings, with investors in their 20s holding more of their assets in cash — almost 27% — than any age group except retirees 70 or older.

And it’s not because they don’t have spare cash to invest: The median cash balance for investors in their 20s is $40,725, according to the data.

It seems more likely that these young people are wary of taking on risk — especially considering that many of them came of age over the past five years, as the pandemic and geopolitical turmoil fueled economic uncertainty.

So what? While investing comes with risk, there is a risk to not investing enough too. This is especially true for young people, who can miss potential opportunities to grow their wealth if they keep too much of their money in cash.

“Time can either be your best friend or worst enemy,” said Brian Walsh, a Certified Financial Planner® and SoFi’s Head of Advice & Planning. “Make it your best friend by investing early so your money has more time to grow.”

Some advisors recommend keeping between 2% and 10% of your portfolio in cash. But the right allocation for you depends on many factors, including how long before you need your money, your financial goals, and your own personal risk tolerance.

Here are some things to consider when gauging the mix of cash (and cash equivalents) versus investments in your portfolio. Remember, there’s always a risk-reward tradeoff.

Decide what you actually need to have in cash. Financial advisors generally recommend having enough liquid cash to cover three to six months’ worth of living expenses, in case something unexpected happens. It may make sense to hold onto even more if your income isn’t steady or if you’re making a big purchase (like a house) soon.

Consider your risk tolerance. Ask yourself what you want to achieve with your investible assets. Are you happy collecting interest in a high-yield savings account, or are you willing and able to take a risk and invest it in the market in exchange for the possibility of higher returns?

People talk about the opportunity cost of not investing in the U.S. stock market because, despite its ups and downs — especially in recent months — the S&P 500 index has trended up over time. Returns vary widely, but historically, the average annualized return is about 10% per year, or 6% to 7% after inflation (not accounting for fees, expenses, and taxes).

Don’t forget inflation. Cash tends to lose value over time because of inflation. And although holding on to large sums can shield you from volatility, you’re giving up potential growth along with potential losses. If you don’t need the money right now, putting it to work can help you reach your goals faster (think buying a house, saving for your kid’s college tuition, or having financial security in retirement).

Weigh your time horizon. Whether it’s retirement or something else, it’s key to know how long you have before you’ll need to cash out your investments. One approach is to subtract your age from 110 to gauge how much money you should keep in stocks. For example, if you’re 25, you would keep 85% of your money in stocks because 110-25= 85.

In the end, there is no single strategy that works for everyone, or even one strategy that works for a lifetime. Make sure you reassess as you age and your goals and financial situation shifts.

Related Reading

•  How to Conquer Your Fear of Investing and Start Growing Your Portfolio (Investopedia)

•  Is Holding Too Much Cash a Mistake? Here’s Why That May Lead to Regrets, Experts Say (CNBC)

•  What Are Gen Zers’ Attitudes Toward Money? (Empower)

Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM20250806SW

Social Security may not feel particularly relevant when your retirement is decades away. But understanding how the benefits work is an important part of retirement planning no matter what your age.

Although Social Security doesn’t negate the need for a savings strategy, your benefits will be a core component of your income during retirement — and they’ll last for as long as you live. Factoring them in now can help you maximize them later.

Here’s what you need to know and why.

Will Social Security Even Be Around?

Before we dive in, let’s address the elephant in the room. Social Security faces a funding shortage that threatens to affect beneficiaries in less than 10 years.

In a nutshell, Social Security — created in 1935 to protect older Americans from poverty — relies on a rolling pay-it-forward system where each generation’s retirees are covered by the younger generations’ payroll taxes. But as the population has aged, it’s created a mismatch between the number of workers and the number of beneficiaries. According to the latest projections, beneficiaries may not get 100% of their scheduled benefits beginning in 2033.

Keep in mind that’s only the current projection. Lawmakers have been pledging to make reforms to the system for decades, and raising the retirement age or making other adjustments could alter that trajectory. To learn more, read this primer on the funding issues.

Why It Pays to Understand Social Security Early

While the funding challenges are unsettling, don’t let it paralyze you. The more planning you do now, the better positioned you’ll be to pivot if there are changes to Social Security. Here’s why it pays to understand the system early:

•  Knowledge is power: Social Security replaces a percentage of your pre-retirement income. The monthly benefit check is the foundation of many Americans’ retirement income, though ideally not the only part. (It was never meant to cover all your expenses in retirement.)

  To that end, it’s important to know your estimated benefit amount and when you might begin drawing your benefits. (More on both of those in a moment.) How much of your basic living expenses will your benefit check cover? And how much does that mean you need to be saving in a retirement account otherwise? (For reference, the average retired worker got $2,005 in Social Security benefits in June.) A retirement calculator that includes Social Security can help. Or you can discuss the math with a financial advisor.

•  Timing is everything: You can start getting your Social Security benefits at age 62, but if you take your benefits that early, you’ll permanently reduce your monthly benefit amount — by 30%, in most cases. It’s often best to wait — if you can afford to — so your checks will be bigger. That’s where your retirement savings comes in. When determining your savings rate, ideally you’re working toward a retirement target that lets you delay taking Social Security for as long as possible.

How to Find Out Your Estimated Benefit

The Social Security Administration uses your 35 highest-earning years to project your monthly benefit amount, so it can change over the course of your working life. If your annual earnings increase as you get older, the estimate will likely go up — to a point. (There’s a limit to how much income can be taxed for Social Security, and in turn, to your monthly benefit amount. In 2025, the max anyone is getting is $5,108 a month.)

Probably the best way to check and track your estimated benefit is with an online “my Social Security” account from the SSA. If you have your driver’s license on you, it usually just takes a few minutes to create one. From there you can immediately download your latest statement, which is updated annually.

For a rougher estimate, you can use the SSA’s Quick Calculator, but this relies on your own estimate of earnings rather than the SSA’s records.

Again, the big if — besides what you may earn in the future — is how long you’ll wait to apply for benefits. Here are the important milestones:

  62: When you can start receiving reduced benefits.

  66 to 67: The official “full retirement age” when you can start receiving the standard benefit, depending on when you were born.

  70: When you’ll receive the most money available to you.

Two important notes: You need at least 10 years of work to qualify for Social Security. And even though you’ll have a set benefit amount, it will be adjusted once a year to account for cost-of- living increases (aka inflation.)

Tips for Planning Ahead

Be proactive to get the most out of your Social Security checks:

•  If you have a partner, make a plan: Coordinating with your partner can make a big difference. If one of you needs to collect your benefit early in order to cover the bills, can you choose the person with the lower benefit amount? That way the one with the higher benefit can maximize their amount by waiting.

•  Don’t be afraid to work: Even after you start receiving benefits, your earnings can increase your monthly benefit amount if you have one of your 35 highest-earning years. However, be aware that if you haven’t reached full retirement age, the SSA could temporarily withhold some or all of your earnings (depending on how much you earn) if you’ve started collecting your benefit. You will be credited that money later, but not until you reach full retirement age.

•  Know the inheritance rules: What happens if you die? Social Security isn’t like a 401(k) or IRA, where you can designate a beneficiary. Your benefit ends when you die, though there are survivor benefits for an eligible spouse or minor children. If your spouse is already receiving Social Security, however, they won’t get double the money.

In short, while you shouldn’t plan to rely solely on your monthly Social Security check, it’s likely to be a core part of your retirement income. And factoring it into your plans now can give you more control later, when timing can make a significant difference to your bottom line.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM2025080601

While homeownership still feels out of reach for many of us, the market is starting to get more buyer-friendly. Mortgage rates are still high, but dampened demand means there are finally more sellers than buyers. And that’s keeping a lid on property prices.

The thing is, that’s the national trend. When you look closer, it’s not the same around the country.

Take this stat: Nationally, 20.7% of home listings had a price drop in June — the most for any June since at least 2016, according to Realtor.com. But in the Northeast, just 13% of listing prices fell, and in the Western and Southern U.S., it was 23%.

Why is it so uneven? Because even though the low mortgage rates of the pandemic buying boom are long gone, the housing market is still recovering from a depleted inventory of homes for sale. Depending on where you live, things have bounced back a lot faster.

More homes on the market typically equals lower prices. And we see that in the West. There are already more listings in the West than before the pandemic, and the median price there was 0.8% lower in June than a year earlier, according to Realtor.com.

Meanwhile, the inventory of homes for sale in the Northeast has yet to recover — as of May, it was still down 51.4% from pre-pandemic norms — and the median list price in June was 1.8% higher than a year earlier.

A few other useful figures from June:

•  The national median list price was $440,950, up just 0.2% from last year.

•  Median list prices fell 0.9% in the Midwest and were unchanged in the South.

•  When looking at price per square foot, the Northeast saw a 4% gain, the Midwest, a 1.3% increase, and the West, a 0.4% uptick. Only the South saw a decline.

•  Price changes varied by major metro areas, too: For example, while prices in Baltimore rose 7%, they were down 6.3% in Cincinnati and 4.7% in Miami.

So what? It’s expensive to buy a home right now, but the housing market is shifting. If you’re an aspiring buyer, it’s turning in your favor — in some regions more quickly than others. Regardless of where you live, here are some tips to get the best deals:

Keep browsing. Keep a close eye on list prices. Scroll Zillow or Realtor.com like it’s your job, and you might identify trends before the data even comes out.

And don’t just look at city-wide data — get down to zip codes. Explore price trends by neighborhood and see how long homes are sitting on the market. Even in the Northeast or Midwest, you might find pockets where sellers are more motivated.

Cast a wider net. Moving isn’t feasible for everyone, but buyers who are able to relocate to less competitive markets stand to gain. In the West and South, homes are staying on the market for about a week longer than they were a year ago. That gives buyers more leverage to negotiate.

Ask for other concessions: If you find your dream home and can’t get anywhere on price, consider asking the seller to cover closing costs, pay for repairs, or even pay for you to have a lower mortgage rate. (Yes, that’s a thing.) Once a seller has received an offer, they may be willing to make other concessions in order to close the deal.

If you are selling, be realistic about the price. Asking for too much can backfire. If your listing gets “stale” by sitting on the market for too long, it can be a red flag for buyers. Keep an eye on how the market’s doing in your area using local comps.

Related Reading

The Housing Markets Where Homes Are Selling Below the Asking Price (Realtor.com)

When Are Home Prices Going to Fall — and How Far? (Bankrate)

Mortgage Rates Might Not Go Down. What Now? (SoFi)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM20250804SW

Markets might be in for a bit of a hangover, as investors recover from last week’s Federal Reserve statement, jobs data, and corporate earnings reports.

While this certainly isn’t going to be an empty week on the earnings front — 126 companies are scheduled to report — it will be a step down from the last few weeks of many mega-cap results. Still, it’s one of the last opportunities investors have to learn how the corporate world is experiencing the economy until next earnings season, which makes it important.

The economic calendar is also considerably lighter than last week. We’ll get reports from the Institute for Supply Management, plus data on factory orders, the trade balance, and consumer credit.

Economic and Earnings Calendar

Monday

•   June Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.

•   Earnings: Axon Enterprise (AXON), Coterra Energy Inc (CTRA), Equity Residential (EQR), Diamondback Energy (FANG), IDEXX Laboratories (IDXX), Loews (L), ONEOK (OKE), ON Semiconductor (ON), Palantir Technologies (PLTR), SBA Communications (SBAC), Simon Property Group (SPG), Tyson Foods (TSN), Vertex Pharmaceuticals (VRTX), Waters (WAT), Williams Companies (WMB)

Tuesday

•   June Trade Balance: Trade, made up of exports and imports, is an important driver of economic activity.

•   July S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

•   July ISM Services PMI: This index from the Institute for Supply Management tracks how purchasing managers across different services industries feel about the business environment.

•   Earnings: Archer-Daniels-Midland (ADM), Aflac (AFL), Assurant (AIZ), Advanced Micro Devices (AMD), Amgen (AMGN), Arista Networks (ANET), Apollo Global Management, Inc (APO), Ball (BALL), Broadridge Financial Solutions (BR), Caterpillar (CAT), Cummins (CMI), DuPont de Nemours (DD), Duke Energy (DUK), DaVita (DVA), Devon Energy (DVN), Eaton Corp (ETN), Expeditors International of Washington (EXPD), Fidelity National Information Services (FIS), Fox Class B (FOX), Twenty-First Century Fox Class A (FOXA), Henry Schein (HSIC), International Flavors & Fragrances (IFF), Gartner (IT), Jacobs Engineering Group (J), Leidos Holdings (LDOS), Marriott International (MAR), Mosaic (MOS), Marathon Petroleum (MPC), Match Group (MTCH), News (NWS), News (NWSA), Public Service Enterprise Group (PEG), Pfizer (PFE), Super Micro Computer (SMCI), Skyworks Solutions (SWKS), Molson Coors Brewing (TAP), TransDigm Group (TDG), YUM! Brands (YUM), Zebra Technologies (ZBRA), Zoetis (ZTS)

Wednesday

•   Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

•   Earnings: Airbnb (ABNB), American International Group (AIG), APA Corp (APA), Atmos Energy (ATO), CDW (CDW), CF Industries Holdings (CF), AmerisourceBergen (COR), Corpay (CPAY), Charles River Laboratories International (CRL), Corteva (CTVA), DoorDash (DASH), Dayforce Inc (DAY), Disney (DIS), Emerson Electric Co (EMR), Federal Realty Investment Trust (FRT), Fortinet (FTNT), Global Payments (GPN), Iron Mountain (IRM), McDonald’s (MCD), McKesson (MCK), MetLife (MET), MarketAxess Holdings (MKTX), NiSource (NI), NRG Energy (NRG), Realty Income (O), Occidental Petroleum (OXY), Paycom Software (PAYC), Pinnacle West Capital (PNW), Rockwell Automation (ROK), STERIS (STE), Bio-Techne (TECH), TKO Group Holdings Inc (TKO), Texas Pacific Land Corp (TPL), Trimble (TRMB), Uber (UBER)

Thursday

•   2Q Productivity and Unit Labor Costs: These measures provide a breakdown of how productive workers were per hour of work and at what cost.

•   June Wholesale Inventories and Sales: Wholesalers often operate as an intermediary between manufacturers and retailers, serving as a key part of the goods supply chain.

•   July New York Fed Survey of Consumer Expectations: This is a measure of peoples’ expectations for inflation, jobs prospects, earnings growth, and more.

•   June Consumer Credit: Borrowing activity gives insight into broader economic activity.

•   Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Initial jobless claims have remained mostly steady, while continuing claims have increased of late.

•   Fedspeak: Atlanta Fed President Raphael Bostic will discuss monetary policy with the Florida Institute of CFOs.

•   Earnings: Akamai Technologies (AKAM), Becton Dickinson and Company (BDX), Constellation Energy Co (CEG), ConocoPhillips (COP), Datadog (DDOG), Consolidated Edison (ED), EOG Resources (EOG), EPAM Systems (EPAM), Erie Indemnity (ERIE), Evergy (EVRG), Expedia Group (EXPE), GoDaddy (GDDY), NortonLifeLock (GEN), Gilead Sciences (GILD), Kenvue Inc. (KVUE), Eli Lilly (LLY), Alliant Energy (LNT), Live Nation Entertainment (LYV), Microchip Technology (MCHP), Martin Marietta Materials (MLM), Monster Beverage (MNST), Motorola Solutions (MSI), Parker-Hannifin (PH), Insulet (PODD), Ralph Lauren (RL), Solventum (SOLV), Sempra Energy (SRE), Targa Resources (TRGP), Trade Desk (TTD), Take-Two Interactive Software (TTWO), Vistra Energy (VST), Viatris (VTRS), Warner Bros. Discovery, Inc (WBD), Wynn Resorts (WYNN), Block, Inc. (XYZ), Zimmer Biomet Holdings (ZBH)

Friday

•   Fedspeak: St. Louis Fed President Alberto Musalem will discuss banking and credit at a fireside chat hosted by Mississippi Valley State University.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.