The Medicare Part D landscape is constantly evolving, brought on by major legislative updates like the permanent elimination of the "donut hole" and cap changes to out-of-pocket prescription spending. However, lower overall spending caps don't mean every plan offers equal value.

Private insurers set their own premiums, deductibles and pharmacy contracts, meaning two plans in the exact same zip code can carry dramatically different bottom-line costs for identical prescriptions.

Take this quick, 10-question quiz to test your knowledge about Part D and ensure you are well-prepared to select the coverage that is best for your health and budget this year.

And don't worry if you miss an answer, you can follow the links below the quiz to brush up on your knowledge.

More on Medicare Part D, from the Kiplinger retirement team:

• 10 Things You Should Know About Medicare Part D Plans
• 8 Changes Coming to Medicare in 2027
• Your 2027 Medicare Open Enrollment Guide: Essential Dates and Notices
• Medicare 2027 Projections: Here's How Much Your Monthly Premiums Are Estimated to Rise

Amazon Prime Big Deal Days 2026 kicked off today — but so did a bunch of competing sales events from Amazon's major rivals. So, if you're looking to save on any big-ticket tech purchases on your wish list, now is a great time to find a deal. The trick is figuring out exactly which retailer's sale you should be shopping.

Ultimately, you should check prices across multiple retailers for whatever you are buying to find the best deal. But, as you'll see below, you also need to read the product pages closely.

In some cases, for example, the bundle deals vary in exactly what you're getting in the bundle at each retailer. In other cases, opting for the lowest price might mean taking a risk by buying from a third-party seller. So read through to find out what you might be trading by choosing one retailer's deal over another.

Save $100 on Arlo Pro 6 Home Security Cameras

If you're looking for DIY home security upgrades, the Best Buy three-camera bundle is the best deal if you're starting from scratch. It comes with a charging station and four rechargeable batteries.

Neither Amazon nor Walmart offer a bundle like this. The deals I've listed below for comparison are for the cameras themselves. If you went with either of these options, you would still need to buy a charging station and any spare batteries you might want.

With that said, if you already have a couple of Arlo cameras and a charging station, the camera-only deals at Amazon could be a better deal for you. There, you're getting four cameras for $190 compared to just three cameras for a little over $180 at Walmart. That's a full extra camera for just $10 more.

• Get three Arlo Pro 6 cameras with charging station and four batteries for $199.99 at Best Buy
• Get four Arlo Pro 6 cameras for $189.99 at Amazon
• Get three Arlo Pro 6 cameras for $180.98 at Walmart

Save 36% on the Yale Assure Lock 2 Fingerprint Keypad

Boost home security without having to remember lock codes with the Yale Assure Lock 2. It comes with a fingerprint scanner so you can just scan and open. But there's still a keypad so you can provide custom codes for visitors.

Right now, the Walmart option is $2 cheaper than Best Buy for what appears to be the same device — albeit only in satin nickel. If you look closely at the listings, the models are also slightly different.

At Best Buy, the model is YRD420-F-WF1. At Walmart, it's listed as YRD430-F-WF1. In reviewing the product descriptions for both, I can't find any meaningful differences between them.

So it's going to come down to your style preference. You can find three different finishes at Best Buy, all on sale for the same $189 price. At Walmart, only the satin nickel finish is on sale.

• Get the Yale Assure Lock 2 Fingerprint Keypad for $187 at Walmart
• Get the Yale Assure Lock 2 Fingerprint Keypad for $189.99 at Best Buy
• Get the Yale Assure Lock 2 Fingerprint Keypad for $230 at Amazon

Save $110 on the Vantrue N4 Pro Dash Cam

A dash cam is one of the best investments you can make for your car. In an accident, the video evidence will be crucial in determining who is at fault. In a hit and run, you'll have video evidence to help the police find the driver so you can file a claim.

While the price tag on the Vantrue N4 Pro dash cam looks lowest at Walmart, there is an important catch. The kit doesn't come with the 128 GB memory card that you're getting when you buy it from Best Buy. There also doesn't appear to be an option to have it professionally installed, which you can do at Best Buy for an added fee.

The same applies to the Amazon deal. There's no memory card included and professional installation doesn't seem to be an option. It's also not as deeply discounted.

• Get the Vantru N4 Pro with a 128 GB memory card for $269.99 at Best Buy
• Get the Vantru N4 Pro without a memory card for $265.99 at Walmart
• Get the Vantru N4 Pro without a memory card for $299.99 at Amazon

Get $400 off on the Shark PowerDetect 2-in-1 Vacuum and Mop

At Best Buy, the Shark PowerDetect 2-in-1 vacuum and mop is on sale for $599.99 and the "comparable value" is listed at $999.99. That means you're saving $400. At Walmart, you'll pay about the same price, but it is sold by a third party seller rather than Walmart. With the price being equal, your best bet is to go for Best Buy where you can buy it directly from the retailer.

You'll notice that Amazon is listed at about $200 below the price offered at either Best Buy or Walmart. But that model is slightly different. It's an AV2800ZE compared to the RV2820ZE at Best Buy.

From the best I can gather, the AV refers to models packaged and sold exclusively by Amazon while the RV refers to the retail model sold directly by Shark and by certain retailers (like Best Buy).

What differences exist between a 2800ZE and a 2820ZE are unclear, but the $200 price difference suggests there's something different. For what it's worth, the AV2820ZE at Amazon is selling for over $680 and only available from third party sellers.

• Get Shark PowerDetect 2-in-1 for $599.99 at Best Buy
• Get Shark PowerDetect 2-in-1 for $599 at Walmart (from a third party seller)
• Get Shark PowerDetect 2-in-1 for $399.99 at Amazon (but confirm the features you want are there as the model number is different)

Get 54% off the Lenovo IdeaPad Slim 3 Chromebook

If you're looking for a budget-friendly yet reliable laptop, there are a lot of great deals right now, especially at Best Buy. This Lenovo IdeaPad Slim 3 Chromebook, for example, is on sale for just $189 at Best Buy. That's over half off of the comparable value of $419.

That's by far the best price across all three retailers and it's the only option that isn't sold by a third party seller.

• Get the Lenovo IdeaPad Slim 3 for $189 at Best Buy
• Get the Lenovo IdeaPad Slim 3 for $237.97 at Walmart (from a third party seller)
• Get the Lenovo IdeaPad Slim 3 with 512 GB of external storage for $332.49 at Amazon (from a third party seller)

Save $70 on the Apple AirPods Pro 3

Right now, you can save $70 on a new pair of Apple AirPod Pro 3 headphones at Amazon, Walmart and Best Buy. All three retailers ship and sell the popular headphones directly so you aren't dealing with a third party seller no matter where you buy.

If you know you're going to grab these, add them to your cart wherever you prefer to shop — or wait until you browse other deals and just add them to your order after you decide which sale you're shopping.

• Get Apple AirPods Pro 3 for $179 at Amazon
• Get Apple AirPods Pro 3 for $179 at Walmart
• Get Apple AirPods Pro 3 for $179.99 at Best Buy

Save 50% on the Beats Studio Pro

The story for Beats Studio Pro is similar to the AirPods. They are 50% off at all three retailers. And you are buying directly from the retailer in all three cases.

The one caveat: if you prefer the matte white style (or you aren't picky about color), that one is available for an even deeper discount at Walmart right now. You can get a pair there for just $119.

• Get Beats Studio Pro for as low as $119 at Walmart
• Get Beats Studio Pro for $149.95 at Amazon
• Get Beats Studio Pro for $149.99 at Best Buy

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• 5 Amazon Prime Big Deal Days Mistakes That Could Cost You Money
• 10 Unique Ways To Save Money Shopping With Amazon
• Walmart+ vs Amazon Prime

Every team is measured by the scoreboard, but after the game, good coaches look beyond the numbers in their constant quest for improvement.

They study video to discern strengths and weaknesses in their team and the upcoming opponent. They identify opportunities, assess risks and make adjustments before the next game.

Retirement planning deserves the same approach.

Most people know how much they have saved for retirement. They may know their investment returns, their 401(k) balance or the value of their IRA. But those numbers alone don't answer the most important question: Are you actually prepared for the retirement you want?

A strong retirement plan should be evaluated from several different angles. A retirement scorecard can help identify where a plan is strong, where it may have vulnerabilities and where adjustments could make a meaningful difference.

Here are five areas worth keeping score on.

1. Secure income: How much of your retirement income can you count on?

One of the first questions retirees should ask is not how much money they have, but how much reliable income they will have.

Social Security may provide an important foundation. Pensions can provide another source of dependable income. Some retirees may also use annuities or other strategies designed to create guaranteed income.

The next step is to compare that dependable income with the expenses that must be paid regardless of what the financial markets are doing.

Consider:

• Essential living expenses
• Healthcare costs
• Mortgage or housing expenses
• Other recurring obligations

The objective isn't necessarily to have every dollar of expenses covered by guaranteed income. Rather, it's important to understand how much of your essential lifestyle depends on your investment portfolio's performance.

A retiree with $2 million invested and $100,000 of dependable annual income may have a very different retirement outlook than someone with the same $2 million portfolio but only $40,000 of dependable income. The account balances are identical; the retirement plans are not.

2. Retirement confidence: How well does your plan hold up when things change?

Retirement rarely unfolds exactly as expected. Markets rise and fall. Inflation changes. Tax laws evolve. Healthcare expenses can be unpredictable. And people may live longer than they anticipated.

That's why a retirement plan should be tested against more than one possible future.

One way to do that is through Monte Carlo analysis, which can test a retirement plan across thousands of potential market and economic environments.

A retirement plan can be tested against periods of strong markets, declining markets, sideways markets, different inflation rates and changing tax environments.

The purpose isn't to predict exactly what the future will look like. It's to determine how resilient the plan is when the future doesn't cooperate.

A plan that works only when investment returns are strong may look successful on paper but provide less confidence in the real world. A stronger plan is one that has enough flexibility to withstand adversity without requiring the retiree to completely change course.

3. Retirement taxes: How much of your money will you get to keep?

A retirement account balance isn't necessarily the same thing as retirement wealth.

Taxes matter. A retiree may have money in traditional IRAs, 401(k)s, Roth accounts, taxable investment accounts and other sources. Each account can have different tax consequences when money is withdrawn.

That means retirement planning shouldn't simply ask, "How much can I withdraw?" It should also ask, "Which account should the money come from, and when?"

For example, a retiree might consider whether to:

• Convert some traditional IRA assets to a Roth IRA
• Realize capital gains in a lower tax year
• Coordinate IRA withdrawals with Social Security
• Manage income to avoid unnecessarily higher tax brackets
• Consider the effect of additional income on Medicare premiums
• Determine which investments should be sold to fund retirement expenses

These decisions can look relatively small when viewed individually. Over a 20- or 30-year retirement, though, the cumulative tax impact can be significant. That's why a retirement scorecard shouldn't measure only investment performance; it should also measure how efficiently the plan converts wealth into after-tax retirement income.

4. Retirement risk: What could knock the plan off course?

Risk in retirement is about much more than whether the stock market goes down.

A comprehensive risk assessment should consider several factors, including:

• Expected investment return
• Retirement time horizon
• Target portfolio withdrawals
• Market volatility
• Inflation
• Longevity
• Healthcare costs
• Liquidity needs
• Personal comfort with investment risk

One retiree may be comfortable with a portfolio that another would find difficult to stick to during a market downturn. A theoretically optimal portfolio isn't necessarily a successful portfolio if the investor can't remain committed to it during a difficult market.

The goal isn't to eliminate risk. That's impossible. The goal is to understand the risks you're taking and determine whether they're appropriate for the retirement you're trying to create.

5. Estate efficiency: What happens to the money you don't spend?

Retirement planning doesn't end when you determine that you have enough money to live comfortably. There is another question: What happens to the money that remains?

For many retirees, leaving assets to children, grandchildren or charitable organizations is an important part of the overall plan. That means estate planning should be considered alongside retirement planning rather than treated as a separate exercise.

The type of account, beneficiary designations, potential taxes, fees and the way assets are transferred can all influence how much reaches the intended beneficiaries.

The goal is about more than accumulating wealth; it's also about determining how efficiently that wealth can accomplish what you want it to accomplish — during your lifetime and afterward.

Keep evaluating your scorecard throughout retirement

A scorecard isn't valuable because it produces a number, but because it starts a conversation. A retirement plan might have excellent investment performance but a weak tax strategy.

It might have substantial assets but insufficient guaranteed income.

It might have a strong probability of success but too little liquidity for the retiree's comfort. Or it might provide plenty of income today while creating unnecessary tax or estate planning problems later. That's why the numbers need to be viewed together.

The purpose of a retirement scorecard is to identify what needs attention now. Great coaches evaluate throughout the season. They recognize what is working, identify what isn't and make adjustments when circumstances change. Retirement is a long season and deserves the same discipline.

The goal isn't to achieve a perfect score and put the plan on a shelf; it's to understand where you stand today and identify what may need to change as your circumstances, markets and priorities evolve. A strong retirement plan is evaluated, adjusted and improved throughout the retirement journey.

Great coaches don't wait until the final game of the season to make adjustments; they keep evaluating the scoreboard along the way. Retirement is a long season and deserves the same discipline.

Dan Dunkin contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Related Content

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• I'm a Retirement Consultant: This Is the Single Most Important Planning Step I Learned After I Retired
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• Top 4 Retirement Withdrawal Strategies to Maximize Your Savings
• Your Game Plan for Retirement: Financial Lessons From Championship Coaches

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For many of us, retirement planning starts with an age. For some people, that may be 62 or 65. Others may work until 70 to maximize Social Security benefits. Whatever the reason, our planned retirement age is a goal. But what happens if your career ends earlier than expected?

It's a problem playing out in real time. While the August jobs report revealed a more resilient labor market and a steady unemployment rate (4.1%) overall, the information industry lost 23,000 jobs.

The ADP National Employment Report showed private payrolls rose by only 38,000 in August, less than the 46,000 added in July and below the 47,000 economists expected.

When you're in your 50s or 60s, an unexpected job loss combined with a prolonged job search can dramatically disrupt years of retirement planning. Losing income during those final high-earning years can put additional pressure on savings or force you to make significant financial decisions earlier than planned.

The smart move is to build flexibility into your retirement plan in case the worst happens. This can help prevent emotional decision-making — such as choosing to drain retirement accounts or claiming benefits earlier than expected — which can have long-term consequences.

1. Get your financial life in order — and don't forget healthcare

Understanding what your finances would look like if you suddenly lost your paycheck is the first step in preparing for the unexpected.

Start by reviewing fixed and discretionary expenses, available savings and any other sources of income to determine how long you could realistically maintain your lifestyle without working.

While many financial professionals suggest three to six months' worth of emergency savings set aside, returning to work may take longer than that because of the slower job market. Aiming to save more will keep you better protected, especially if you become ill or no longer able to work.

Knowing how much money you need each month can also help you identify expenses that can be cut before you begin withdrawing from long-term savings.

A sudden loss of employment may also mean losing health coverage. If that happens before you're eligible for Medicare, options such as COBRA may come with substantially higher premiums that could drain savings.

Factoring healthcare coverage into any scenario involving unexpected job loss can help buy you more time to consider your options and protect savings.

Having funds outside of retirement accounts can offer another layer of protection. This reduces the need to sell investments or begin taking retirement distributions to cover expenses.

This becomes especially important if sudden unemployment coincides with market volatility — when selling investments may lock in losses or reduce the amount invested for a potential recovery.

2. Stress-test your retirement plan now

Understanding what would happen to your retirement plan in the event of a sudden job loss is also part of the preparation. Stress-testing your plan by running it through different scenarios can help you understand how your finances would be impacted if your current situation changed.

For example, you could model what would happen if you stopped working now, retired several years earlier than your target age, or began withdrawing from savings prematurely.

If you lose your job unexpectedly, retirement doesn't have to be the next step. Before claiming benefits or making withdrawals, consider how that could impact your retirement.

Working through different scenarios can help determine whether relying on those sources of income now makes sense, or whether continuing to work would leave you better off in the long run.

3. Stay connected

In addition to financial preparation, keeping your professional skills and network up to date can give you more options if you find yourself looking for work. This includes maintaining required licenses or designations as well as staying connected with people in your industry.

Keeping up with changes in your field later in life can make it easier to pursue another position if you lose your job, rather than feeling forced into retirement.

For many of us, the age at which we hope to stop working is the first step in retirement planning. But that timeline is subject to change at any time.

Preparing for the possibility of a sudden job loss, building flexibility into your retirement plan and stress-testing it under different scenarios will help you understand how to move forward without minimizing benefits or sacrificing years' worth of savings.

Related Content

• My Wife Was Laid Off at Age 64: Here Are 5 Questions We're Asking
• Facing a Potential Job Loss? Here's How to Prepare
• Don't Let Health Care Costs Wreck Your Retirement: Here's How
• An Expert Guide to Calculating How Much Money You Really Need in Retirement
• I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) Contributions

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The iPhone 18 Pro is here, and it's a stellar upgrade. The new phone delivers 24 hours of battery life with regular daily use, so you're not tethered to your charger.

Do you love taking pictures? The variable aperture and pro controls allow you to capture more creative shots. Overall, the phone offers excellent battery and camera features, making it worth a closer look.

If you're looking to upgrade from your current model, you're in luck, as all the major carriers offer it for free. But "free" comes with strings attached, typically requiring an eligible plan and long-term commitment to receive the full promotional credits. However, is that the right play? I'll break down why getting a free phone from a major carrier isn't really free, and a cost-saving alternative.

Your phone is never free through major carriers

Major carriers like AT&T, T-Mobile and Verizon make it easy to transfer service or upgrade devices with little to no out-of-pocket expenses. The problem? You have to sign up for a more expensive plan to earn the incentive.

T-Mobile offers the iPhone 18 Pro for free with the Experience Beyond 2.0 plan. This plan is $100 for one line, $170 for two. If you're 55+, you qualify for T-Mobile's senior plans, lowering the costs to $85 for one line or $130 for two.

To be fair, this plan packs ample perks, such as a five-year price-lock guarantee, free ad-supported plans for Hulu and Netflix and unlimited premium data. But if you don't need many of those perks, you'll overpay.

Because the other aspect of earning a "free" phone is that you must keep service for 36 months. For a free iPhone 18 Pro from T-Mobile, your out-of-pocket costs for three years on the plan alone will be…

• $3,600 for a single-line subscriber
• $6,120 for two lines
• $3,060 for a 55+ plan for one line
• $4,680 for two 55+ plans

Sounds expensive? Because it is. Verizon offers a free iPhone 18 Pro with its Unlimited Plus Plan for $80 per month. Meanwhile, AT&T offers the best iPhone 18 Pro deal with the AT&T Value 2.0 plan for $50.

Now, let's compare another option.

Own the phone instead of a plan owning you

Another option is to purchase the iPhone 18 Pro outright. This is a pretty penny upfront, as the base model starts at $1,199. Yet, once you buy the phone, you can use whichever cell service you want, without locking into a multi-year commitment.

If you want a bare-bones cell phone plan with unlimited texting and calling and some high-speed data, you don't have to settle for more expensive plans. Instead, you can use a service like Mint Mobile, where plans start at $15 per month.

Striking a balance between perks and value

Most people don't need the most expensive plan cell phone providers offer, but you want a steady baseline of perks.

Here's a breakdown of the basic plan each carrier offers, its cost, and how much it would be to purchase the iPhone 18 Pro outright and use these plans for the same three years:

Therefore, buying your iPhone 18 Pro outright not only gives you more flexibility to choose a plan that fits your needs, but it could also save you hundreds of dollars over three years.

How trade-ins factor into the math

You'll likely be upgrading from an older phone. Trading in an older device lowers the upfront cost of purchasing an iPhone 18 Pro, as major carriers provide monthly credits to offset some or all of the costs.

Keep in mind, though, that carriers typically spread these credits over a set period, often 24 or 36 months. If you cancel service before this time, you forfeit any remaining credits and must pay off the device balance.

One smart alternative is to work directly with Apple regarding your trade-in. This approach gives you an immediate discount and lets you choose your carrier and plan.

Ultimately, if you haven't upgraded your phone in a while and want better battery life, the iPhone 18 Pro is a smart option. Instead of getting it for "free" through your carrier, you can save thousands of dollars by purchasing it, then choosing a carrier and plan that fits your needs.

Related content

• Apple's New Foldable Phone Poised for Strong Sales
• One of T-Mobile's Most Valuable Offers for Seniors
• Apple's Price Hikes Signal Costlier Electronics for Years to Come
• Mint Mobile's Unlimited Plan Is Just $15 a Month Right Now

You just got a $1 million inheritance in the Great Wealth Transfer and don't know what to do? You're not alone. Millions of people are poised to receive a piece of the more than $124 trillion in generational wealth expected to be transferred over the next decades.

While an inheritance of that size can be life-changing, it can also cause undue strife. With a windfall come taxes, estate administration fees and investment decisions.

"Most people, when they receive an inheritance, want to spend it," said Tim McGrath, a managing partner at Riverpoint Wealth Management. "If they don't make the right decisions, it could hurt them over the long haul rather than help them."

Let's say you buy a big house that you can't afford or make risky investments — you could end up in debt or homeless because of the inheritance.

The good news is there are easy ways to protect your newfound wealth. From where to initially park your cash to how to grow it, here's how.

First, figure out what the inheritance means to you

Receiving $1 million can be a big deal. It could mean you're debt-free, your kids' education is paid for, or your retirement is in the bag, or it mightmean something completely different. Either way, McGrath says the first thing you should do is determine what it means for your goals and finances.

"For most people, $1 million is life-changing," says McGrath.

While you consider how to use your newfound wealth, don't keep the money under a mattress. Put it in a high-yield savings account or, if you already have one, an investment account.

"In today's environment, you can still find money markets or high-yield savings accounts paying 3% to 4%, so parking it there to make a little interest while you determine how to proceed is a simple way to get started," says Kassi Hyde, a financial adviser with Apollon Wealth Management. "If you know you don't need or want to touch the money and want it to grow for future needs, then definitely go ahead and invest. Just make sure to consider your time horizon when determining how risky you want to be."

If you don't have a financial adviser, now is the time to find one. Our How to Find a Financial Adviser guide will help you select one that matches your personality and budget.

Pay down high-interest debt

Even if you know how you want to use the inheritance, financial advisers say to pay off any high-interest debt first. That could include credit cards, personal loans and retail cards that charge you double-digit interest. The idea is to get yourself into a cash-flow positive position first, says McGrath.

Put the money to work while you wait to use it

Maybe you plan to buy a new house in a couple of years, pay for your kids' college in the future or save it for retirement. Whatever the goal, it's important to put your inheritance to work while you wait. That's where an investment plan comes into play. The type of inheritance dictates how you can invest it.

Develop a tax strategy

You need to be mindful of the tax portion of your inheritance, but how much is taxed depends on the asset. The lifetime federal estate tax exemption — $15 million for individuals and $30 million for couples in 2026 — pretty much guarantees most recipients won't owe federal estate taxes on their inheritance.

Depending on where the person who left you an inheritance lived, you might face state estate taxes. State tax exemptions are typically lower than the federal exemption. For example, Massachusetts exempts up to $2 million.

If the asset generates capital gains after it's passed on, you'll owe taxes. "If you inherit an investment worth $500 and the value grows to $600 and you sell it, you have $100 in gains you will have to pay taxes on," said Hyde. The caveat to that capital gains rule is the "step-up in basis," which resets an asset's original value to its market value on the date of the original owner's death.

You'll also owe taxes (as ordinary income, potentially bumping you up to a higher tax bracket) if you inherited a traditional IRA or 401(k) and you aren't a spouse.

You might wish to consult a professional tax expert if your inheritance is complex or you don't understand your options.

Stick to the plan

A $1 million inheritance offers rare financial freedom, but only if you manage it wisely. By tackling debt first, planning for taxes and putting the rest to work, you can turn a one-time inheritance into generational wealth. Once you create a plan for that money, stick to it, and don't be afraid to ask an expert for guidance along the way.

Related content

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• Baby Boomers vs Gen X: Who Spends More?
• Think You Need $1 Million to Retire? 6 Reasons a 'Modest' Nest Egg Is Plenty

Everyone's heard a horror story.

The adult children who no longer speak to each other after a blow-up over who would get Mom's engagement ring when she died. The constant arguments between siblings over the family vacation house they jointly inherited. The simmering resentment between adult kids after a parent's will revealed an uneven split of assets among them — tension that eventually boiled over, causing the siblings to sever their relationship and cut off their children, once-close cousins, from seeing each other as well.

These are heartbreaking scenarios that many parents worry about and try to avoid in their estate planning. And many adult children share their concern: One-third of adult kids expect an inheritance to create conflict with their siblings, according to a national survey commissioned by Kiplinger and conducted by the research firm Morning Consult.

Studies, unfortunately, show their concern is justified. Research from Cornell University indicates that among the 27% of Americans who are estranged from a family member, disputes over an inheritance are a leading trigger and frequently involve siblings.

Similarly, an Ameriprise study found that when adult siblings report money conflicts, nearly 70% of those arguments involve their parents, and inheritance was the top cause of those disputes.

Inheritance conflicts are rarely only or even primarily about money, experts say. "Sibling disputes over estates and wills almost always surface in the context of older, unresolved grievances, typically about parental favoritism and unequal treatment, so money becomes a scorecard for perceived favoritism or slights over a lifetime," says Karl Pillemer, a professor of human development at Cornell University and author of Fault Lines: Fractured Families and How to Mend Them.

Adding fuel to the fire: The transfer of a parent’s assets occurs at a time of grief, when emotions are already running high. And in many families, there has been no prior conversation about how Mom and Dad intend to pass on their wealth, so adult children are forced to draw their own conclusions — and they often fill in the blanks with negative implications, experts say.

"Grief mixed with urgency and ambiguity is a tough combination," says Elisa Shevlin Rizzo, head of family advisory at J.P. Morgan Private Bank.

The amounts at stake rarely matter. "Disputes can happen when the only assets involved are Mom’s china and jewelry, and they can happen when there’s millions of dollars at stake," says Monique Lavender Greenberg, managing partner of the law firm Lavender Greenberg in Miami and a board director of the National Association of Estate Planners & Councils.

"No one wants their legacy to be that their kids end up hating each other. We want our families to continue to love each other, but that takes thought and planning."

Want to ensure your wealth passes as you intend and your children are still speaking to each other after you’re gone? Experts suggest these steps.

Figure out what's truly fair.

The default for most parents is to split the assets they’re leaving to the kids equally. But many adult children don’t feel that’s a fair division.

In the Kiplinger-Morning Consult survey, for instance, 71% of parents said they intend to leave the same amount to each of their kids, but just 50% of adult children preferred that approach. That 21-point gap was filled by siblings who believe Mom and Dad should base inheritance decisions on each child’s financial situation and need, or on factors such as how much financial help parents have given each child in the past and how much the kids assisted their mother and father during their lifetimes.

"Equal means the same for everyone, while fair means each person gets what they deserve or need," says Pillemer. "Sometimes those two norms pull in opposite directions inside families."

Both perspectives are valid. "An even split is completely understandable if you’re a parent who wants to avoid inserting a new conflict into the sibling dynamic and to communicate that you love all your children equally," says Matthew Willner, a therapist who specializes in family conflict and estrangement, including adult sibling conflicts and inheritance disputes.

"But if one child has been struggling financially for years, an even split can feel emotionally like their needs don’t matter or aren’t recognized. And if you’re, say, a daughter who has been a caregiver for Mom or Dad for several years and there’s an even split, it can read to you as if everything you did counted for nothing."

On the other hand, an unequal division, especially if it’s unexplained, can be even more hurtful and trigger long-lasting rivalries and tensions between siblings.

"If I’m the child who received less and I already feel like my mom and dad loved my brother more, that’s going to be a real hard nut to swallow, even if they helped me more financially when they were alive," says Rizzo. "Even if I’m a hedge-fund manager and my brother works at a nonprofit making $40,000 a year, getting less is hard emotionally — even if I know intellectually it makes sense."

There is typically no right or wrong decision on splitting assets, experts say, and parents are entitled to pass down their wealth however they see fit. What’s imperative, though, is that you’re thoughtful about your process and choices, and then, crucially, that you inform your children of your decision and explain your reasoning.

It’s the element of surprise that can do the greatest damage, experts say.

"The very thing that would prevent sibling conflicts or at least lower their temperature — having an honest conversation about how parents have decided to pass on wealth and why — is the step many families skip because it can be uncomfortable and bring up old wounds no one wants to deal with," says Willner.

He suggests talking to all of the children together, if possible, as that lessens the possibility of one sibling accusing another of manipulating or pressuring their parents, especially if you’ve decided on an uneven split. It also gives the kids a chance to voice their emotions and concerns; feeling heard can make it easier to accept the parents’ decision.

"If the children know what’s going to happen and why, they typically suck it up and honor your wishes," says Greenberg. "And if the kids are going to be mad, they’ll be mad at Mom and Dad, not each other."

You can also pursue ways to reward an adult child who has helped out a lot, provide more to one who needs extra financial help, or balance the scales on past financial gifts to another that avoid a hurtful uneven division of assets in your will. You might, for example, make a caregiver child the beneficiary of a small life insurance policy or give more money during your lifetime to the child working at the nonprofit than to the one who is a hedge-fund manager.

The important thing is that none of your plans live in the dark. Says Sharon Olson, managing principal of Olson Wealth Group, "We spend enormous amounts of time preparing the money for the children. We need to spend just as much time preparing the children for the money."

Read more: Why Leaving an Equal Inheritance to Your Children Could Backfire

Take particular care with tricky assets.

Ironically, the part of your estate that’s least likely to trigger a blow-up among your kids may be your most valuable holdings, in dollar terms: Cash savings and liquid investments, such as stocks, bonds and funds. Far more fraught are assets that can’t be easily or neatly divided, such as a parent’s home, a vacation property or a family business.

Take the family lake house, for example — an asset with both monetary and sentimental value, perhaps tied to happy memories of summers together by the water. Maybe the siblings want to keep it in the family and share it, but one cannot afford the upkeep. Or maybe one sibling prefers to sell, but the other siblings don’t have the cash to buy them out.

"Parents often leave property to their children and say, ‘They’ll figure it out when I’m gone,’" says Rizzo. "That’s one of the most damaging attitudes out there. If you want to set your kids up for future conflict, let them figure it out when you’re gone."

A family business can be especially problematic, particularly if one or more siblings had jobs at the company and others didn’t. "The daughter who worked there for 25 years may say, ‘I helped Dad build this business and I deserve it.’ Her brother may say, ‘I understand that, but he was my father too, and I also deserve a share.’ Both can be right," says Olson.

To head off trouble, she suggests parents identify potentially thorny assets and establish valuation and buyout provisions as part of estate planning. If multiple children will own a vacation home, determine how expenses, property use and eventual sale will work. "Don’t leave the children a complicated asset and unanswered questions," Olson says.

To the extent that you can, solve potential problems in advance. You might, for example, put the house in Nantucket in a trust with enough financial assets to cover the expenses, if the estate can afford it, Rizzo suggests.

Or, if an estate lacks cash, buying life insurance might be helpful. That way the child who wants the beach house gets it, or the family business passes to the kid who works there, and the other child is the beneficiary of the insurance policy and receives an asset of comparable value, says Carly Doshi, head of family advisory planning and trust services at Flagstar Bank and chair of the New York branch of the Society of Trust and Estate Practitioners.

Be careful to communicate your intentions, including for any accounts you own jointly with one of your children, to all of your offspring, experts say.

For example, you may have a joint checking account with right of survivorship with a son or daughter who helps you with bill-paying, and that will pass directly to them upon your death. If that’s what you want — say, to compensate that child for their help — let all of the kids know the plan. Or, if not, let them know you intend for that money to be split among them after you’re gone, document your wishes in writing in a letter of instruction, and consider retitling the account.

"One of the greatest gifts a parent can leave their children is clarity," says Doshi. "A thoughtful estate plan is really about removing as many reasons for conflict as possible."

Read more: What Happens to Your Savings Account When You Die?

Sweat the small stuff.

For one family, it was the red plate with hearts on it that said "You’re special," which Mom used to serve birthday cake for each child growing up. For another, it was a 25-cent Christmas ornament.

In yet another case, it was a piece of art, promised by the father to one kid and by the mother to another. Then there was the daughter-in-law found racing through the parents’ home after the funeral, switching masking-tape labels attached to various cherished items indicating which sibling was supposed to get what.

Estate and wealth-management experts are filled with stories of personal possessions, sometimes valuable but often not, that triggered big fights among siblings after a parent’s death, sometimes resulting in a permanent rift.

"Objects are often more contentious than money — not just because it’s hard to divide a holiday ornament or a plate, but because those kinds of items hold more memories and meaning for people," says Sara Croymans, an educator with the University of Minnesota Extension who helps facilitate its Who Gets Grandma’s Yellow Pie Plate? program, which teaches research-based practical strategies for passing on personal possessions.

Croymans suggests parents take a poll of their adult children to find out what items they’re interested in and why. Don’t just assume, for instance, that a son should get the tools and a daughter her mom’s jewelry, she says. Parents should also share their views and plans for dividing possessions and the stories behind items that are particularly meaningful to them. That, in turn, might affect the kids’ preferences.

If more than one child wants the same item or items, try to land on a system together that feels fair for deciding who gets them, perhaps coming up with similar items that can be considered in tandem. Croymans recalls three sisters who had shared a baptismal gown, and each one wanted it for her own kids. The siblings averted an argument by identifying a confirmation gown and their mother’s wedding dress as things of similar emotional value, and each sister ended up with a garment that was meaningful to her.

"Research has found that if people buy into the process and believe it’s fair, they’ll support the outcome, even if they didn’t get the specific thing they wanted," says Croymans.

Experts recommend documenting your plan for personal possessions, naming names and specific objects, in a letter of instruction you keep with other estate-plan documents. Although the document is not legally binding, experts say it carries the weight of moral authority, and most siblings honor their parents’ plans.

Read more: The Great Junk Transfer: Why Heirs Want Meaning, Not More Stuff

Avoid the oldest-child syndrome.

Sometimes tensions build and boil over among siblings not over the inheritance itself but rather who is appointed to oversee the disposition of those assets. To avoid fights, parents often default to appointing their oldest child as executor or trustee or naming some or all of the children as co-managers — well-intentioned moves that experts say often backfire.

"The person who is most suited for the role is the best choice, and that should be the person who is organized, financially capable, communicative and, crucially, trusted by the other beneficiaries," says Doshi.

Whoever you pick, to minimize resentment or hurt feelings, be sure to communicate your decision to all of your children as well as your reasons — say, if the appointee has legal or financial skills or is recognized within the family as the peacemaker.

As for the team approach to executorship, experts are not fans. "Requiring all of your children to reach constant consensus, especially when everyone is grieving, can slow things down or even create conflict where there wasn’t any," says Doshi.

And if the kids don’t always get along? "If the siblings have never made decisions well together, requiring a consensus after a parent dies is planning for deadlock," Rizzo says.

The critical question parents don’t ask enough, Olson says, particularly when it comes to trusts: What will giving this child authority do to the sibling relationship? "Sometimes the most loving thing a parent can do is not put one child in the position of policing another," she says.

Alternatives to naming one or more of your children as executor or trustee include appointing another family member or close friend who is capable and willing to take on the responsibility, or hiring a professional fiduciary through, say, a bank or other financial institution. Or you can turn to an estate-planning attorney who offers these services (find one via the directory of The American College of Trust and Estate Counsel).

Read more: 6 Steps to Choosing an Executor

Get help before things blow up.

If you anticipate conflict between your children over their inheritance, or recognize it’s a possibility, you can also turn to professionals to mediate potentially thorny issues or just help get all the kids on the same page. Siblings can also seek outside help after a parent’s death, if issues around their bequests start to get contentious.

"Having a neutral third party in the room guiding the conversation can help mitigate some long-standing family feelings and tensions, and people tend to be more respectful and reasonable," says Joseph Kellogg, head of wealth planning for WE Family Offices in Miami.

Experts suggest parents consider building a procedure for mediation of disputes into estate-planning documents. (An estate-planning attorney or family wealth manager may be able to fill this role, or you can find a professional mediator in your locale using a tool such as Mediate.com’s practitioner directory.)

"That way everyone knows there’s a way out of disputes that attempts to be fair and objective," says Kellogg. "And it can motivate kids to go the extra mile in trying to work it out themselves, knowing that if they don’t, someone else will step in and do it for them."

Research from Karl Pillemer at Cornell, including interviews with about 300 people who had experienced family rifts, backs up the importance of seeking independent mediation if siblings are locked in a fight over their parents’ estate.

"When I asked family members who had a rift over inheritance what would have helped, they often said some version of, ‘I’d like a time machine, so we could go back and get outside help.’"

The good news, says Pillemer: Rifts over wills, inheritance and money are somewhat more likely to be repaired than ones that stem from systemic family problems, such as harsh parenting or extremely difficult childhoods — unless siblings reach a tipping point in which one says to the other, "I never want to see or speak to you again."

"When that occurs, it develops its own dynamic and is surprisingly hard to repair," says Pillemer. "Almost every estranged family I talked to wished they hadn’t drawn that line in the sand.

So do almost anything you can not to reach that cutoff point. Keep talking, be more understanding, seek mediation, get help from a therapist, apologize — even if you feel you shouldn’t have to — and, most especially, ask yourself, Is this really worth it?"

The price of destroying a family over money, he notes, is almost always too high, and it’s the next generation that pays. "If two siblings cut off contact over an inheritance, they don’t lose only each other; their children lose their cousins. Your kids will inherit not only your assets one day but also the estrangements that came with them."

That’s the opposite of the legacy most parents hope to leave. The way to prevent it, Pillemer and other experts say, is to talk with your children, communicate your intentions and the reasoning behind them clearly and early, and be open to your kids’ views and feelings in return.

He says, "That’s the single most important thing parents can do."

Read more: Kiplinger Conversations: How to Talk Inheritance With Your Kids

Special considerations for blended families.

Families in which one or both spouses have children from previous marriages are the most likely to experience disputes around estate plans, according to research from the Society of Trust and Estate Practitioners (STEP). Unequal treatment of siblings and conflicts between children and stepchildren were among the most-common points of friction, second only to disputes between children and a surviving parent or stepparent.

"The core problem is that remarriage creates competing loyalties and competing claims, which can be difficult to resolve in a way that feels fair to everyone," says Karl Pillemer.

If you’re part of a blended family and want to keep the peace between your biological children and your stepkids after you’re gone, experts recommend these steps.

Formalize your wishes. Recent research from Yale shows parents often favor stepkids as beneficiaries over any relatives other than spouses and their own children. But state intestacy laws, which dictate how your assets will pass to others if you die without a will, typically don’t make provisions for stepchildren.

So if you want yours to inherit anything, you’ll need to make that intent clear and legally binding with bequests via a will or trust or by including them as beneficiaries on financial accounts that pass outside of a will.

Accommodate age differences. There are often big age gaps among children in blended families, notes Carly Doshi, head of family advisory planning and trust services at Flagstar Bank. So their financial needs and when they need to tap assets may be different — one child might be gearing up to, say, buy a first home while another might be nearing retirement.

The solution? Doshi says this is a situation in which trusts come in handy, giving you the ability to spell out when and under what circumstances different heirs get distributions from your estate.

Consider a neutral party for key roles. Parents often pick the oldest child as executor or trustee. But in a blended family, putting a child from one branch of the family in charge of assets for someone from a different branch can spark tensions.

An alternative: Appoint a neutral party, such as an estate attorney or professional fiduciary.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

More Trillion Dollar Talk

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• We Asked 5,000 Americans About Inheritance and the Great Wealth Transfer. Here's What We Learned
• Don't Wait Until You're Gone: Why Retirees Are Giving Away Wealth Early

If you are considering purchasing a home warranty, you might want to wait until after you've read this. Today's story offers information that can help you avoid getting ripped off.

First, let's clear up a common source of confusion: A home warranty is a service contract, not an insurance policy like your homeowners insurance. It is supposed to help pay to repair or replace major home systems and appliances that break down from normal wear and tear.

That's what the ads of home warranty firms say, and there are 114 such firms in the U.S. The largest is American Home Shield. Check out this NBC News video to get an idea of what many consumers are dealing with.

One of the ways companies that offer these contracts make oodles of money is by promising to be there for you, collecting your monthly coverage payments and then coming up with one reason after another to deny claims when you need to actually use the services they've sold you.

They operate very much like after-market extended auto warranties, an industry whose motto should be, "Oh, so you drove your car after paying for our extended warranty? Who said you could do that?"

You have to give AHS credit for creative advertising — the fortune-teller ads with Saturday Night Live alum Rachel Dratch are fun. Those ads clearly state, "If AHS can't fix your covered item, they'll replace it, no matter its age." You can watch one of the ads here, which is featured on AHS' YouTube channel.

Vonda and Rick's experience: Delay after delay plus incompetence

In our office, we didn't need to look at a calendar to know this summer — the hottest ever recorded in the U.S. — was over. Something, or, to be more precise, the lack of something, was the clue: Not as many complaints from frustrated people calling about their home warranty companies refusing to repair or replace their AC units.

The home warranty is the very definition of a bait-and-switch, with advertising campaigns making the promise that, with various wording and for a monthly fee, the company is your safety net should something happen to a major appliance or your heating and air conditioning system.

A safety net is what longtime Southern California readers Vonda and Rick Perales expected from American Home Shield. "We had been subscribers for over 20 years," Vonda said. "As the company promptly repaired little things, like a dishwasher, we felt certain they would quickly remedy our AC system that had failed. Mr. Beaver, we were so disappointed."

Their discovery of just how much AHS cared about their customers was set out in this summary of a chronology that is the very definition of gross incompetence — at the very least:

• June 18. AC stopped working. Rick contacts AHS.
• June 22. Contractor arrives but says he can't access the unit because it is on a two-story roof with Spanish tile. Later that day, a different contractor arrives and offers the same reason for not accessing the unit on the roof.
• June 23. A third contractor says the AC is too old to fix and makes a request to AHS to replace the entire unit. Only a replacement compressor and fan motor are authorized.

Just a reminder that the ads we mentioned earlier say, "If AHS can't fix your covered item, they'll replace it, no matter its age."

Rick said, "Because our unit was 33 years old, the replacement parts drew too much current, leading to burned wires and the AC failing repeatedly — burning wires is a true fire risk.

"AHS sent out the same contractors, who again could not access the roof, then told us to find our own contractor. They refused to accept responsibility for the delays."

Fed up with the largest home warranty company in the U.S. refusing to honor its contractual commitments — and the statement in its ads — the couple contacted me.

I emailed an AHS media contact, asking her to help my readers. There was no response to my first email, so I sent a second, and this one prompted action, which eventually resulted in a $4,600 buyout of the Peraleses' contract.

Collateral damage

Rick reported that as of July 29, he had made 52 calls to AHS, beginning in June, trying to get contractors to repair or replace their AC. AHS required them to pay an $800 bill for Freon, as it was not covered in their policy. That would have been reasonable had AHS actually repaired their AC. Instead, it was money down the drain.

Vonda wrote to me, "We had to purchase an AC window unit at a cost of $599 and have spent $1,205 on hotel rooms due to the excessive heat. We have paid for this policy for the last 20-plus years. I do not know where we would have wound up without your help. Thank you, Mr. Beaver."

My advice

If you are seriously considering signing up for a home warranty, search the Better Business Bureau (BBB) website for reviews and complaints.

I am not only pointing out AHS, which has a BBB rating of 1.28 out of 5 stars (based on nearly 6,000 customer reviews), but the complaints about many of these companies should make you run the other way!

I have looked for a home warranty company to recommend, but I have not found one.

What can you do instead of buying a home warranty? (Again, I'm not talking about homeowners insurance — that is legit). Instead of a home warranty, consider opening a home maintenance savings account so you can budget for the repairs that every home will require at some point.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The Nasdaq Composite notched a new all-time high during a broad-based rally on Monday, as markets focused on upside for the artificial intelligence (AI) revolution. Amid another uptick for yields across the Treasury spectrum, investors, traders and speculators are placing more weight on the potential for AI to increase efficiencies over the long term, even as it drives up costs in the short term.

The 2-year Treasury yield ticked down 0.4 basis points to 4.821%, while the 10-year Treasury yield (3.2 bps, 5.309%) and the 30-year Treasury yield (3.4 bps, 5.664%) reached new 52-week highs again, as a global bond market sell-off continues.

Still, at the closing bell, the tech-heavy Nasdaq Composite was up 1.1% to 27,477, a new all-time closing high. The broad-based S&P 500 had added 0.7% at 7,773, and the blue-chip Dow Jones Industrial Average was up 0.2% to 51,267.

"There is no doubt that the U.S. remains an oasis and is the engine behind global GDP growth," Louis Navellier of Navellier & Associates writes. As Navellier explains, "FactSet is estimating that the S&P 500’s third-quarter earnings are forecast to rise 29.5%."

We are indeed in historic territory, as analysts at the Well Fargo Investment Institute note. "Consensus for 2027 capex for the eight-largest cloud computing companies is now approximately $1.3 trillion," they write. "This would represent approximately 3.7% of our nominal gross domestic product forecast for next year, putting this investment cycle on par with some of the largest in U.S. history."

Comparable cycles include the railroads from 1879 to 1890, which accounted for more than 4% of GDP, electric power in 1929, oil and gas in 1980 and the dot-com boom in 2000.

Services surveys say the economy is still expanding

The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) printed at 54.9% in September, down from a reading of 55.4% in August and below a consensus forecast of 55.1%.

But, as William Blair economist Richard de Chazal says, it's the 27th consecutive month the index has been above the 50% expansion-contraction line. And, in the aftermath of a cooler-than-expected September jobs report, the survey confirms that "services sector employment, which accounts for the bulk of economic activity, remains on firm footing."

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As Chazal notes, the employment index returned to expansion for the first time in three months. Still, although crude oil traffic through the Strait of Hormuz is recovering, fuel shipments are still well below prewar levels, and diesel, gasoline and petroleum products helped push the prices index to its highest level since July 2022.

"The bigger pressure remains on costs," Chazal writes. "For the Fed, the report suggests inflation remains the main concern. Friday's jobs data lowered the odds of a hike at the October meeting, but with demand holding firm and input costs still climbing, another hike remains likely."

INTC hit by Elon's TerraFab strategy

Nvidia (NVDA, +2.1%) hit another new all-time high and was among the top two Dow Jones stock on Monday, helped by optimism about the AI trade, as well as the impact of announcing the biggest stock buyback in market history last week.

But fellow semiconductor stock Intel (INTC, -2.6%) was down after Elon Musk confirmed that Taiwan Semiconductor Manufacturing (TSM, +2.8%) is talking with his TeraFab chipmaking project about its facilities in Texas.

"Just discussions, but something may come of it," the CEO of SpaceX (SPCX, +7.6%) and Tesla (TSLA, +2.2% responded on X to reports of the TeraFab-TSMC talks.

Intel has an existing deal with TeraFab. Musk clarified in a follow-up post that TSMC could work with rather than replace Intel at his chipmaking plant.

Intel also has a partnership with Alphabet (GOOGL, +0.9%) to support Google's AI cloud infrastructure, and the chipmaker also received $5 billion from Nvidia as part of a project to co-develop custom chips.

CBRS looks a little better today

Cerebras Systems (CBRS, +9.1%) has had a tough go of it since the tech stock completed its initial public offering (IPO) in May, generating a loss of more than 4% vs a gain of more than 10% for the S&P 500.

But the AI infrastructure firm also got a boost from a post on X. "Cerebras is a close partner," Open AI CEO Sam Altman said late Friday, "and we have a deep engagement pushing on the frontiers of speed."

OpenAI is Cerebras' biggest customer by revenue backlog. In January, the companies signed a $10 billion deal to provide ChatGPT with 750 megawatts of computing power through 2028.

At the same time, research firm SemiAnalysis reported that OpenAI is using Nvidia's hardware rather than Cerebras's to support "Ultrafast" mode for its latest model.

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Medicare Part B enrollees are set to receive a one-time $90 rebate delivered automatically over the next few weeks, President Trump announced on October 2. Created in 2008 as a flexible budget tool for provider payment adjustments, the Medicare Improvement Fund (MIF) is now being tapped by the federal government to issue direct cash rebates to Medicare beneficiaries.

In 2027, Medicare Part B premiums are estimated to rise by $6.60 per month to $209.50, according to the 2026 Medicare Trustees Report. If the premium estimates hold, the $90 rebate would cover the $79.20 increase, with $10.80 to spare. A couple can receive a total of $180 if both spouses independently meet the eligibility requirements.

In September, President Trump announced $500 rebates for certain Affordable Care Act (ACA) enrollees in 30 states who purchased coverage through the federal marketplace, HealthCare.gov, and did not receive premium assistance.

Here is what you need to know about Medicare Part B premium rebates: Who qualifies, when to expect your payment and where the money came from.

Who is eligible for the Medicare Part B premium rebate?

Are you one of the 20.8 million eligible beneficiaries who will receive the $90 Medicare Improvement Fund Premium Rebate? Generally, to be eligible, you must live in the United States, not receive any premium assistance from Medicaid, not pay the income-related monthly adjustment amount (IRMAA), and not be enrolled in a Medicare Advantage plan.

If you do qualify, payments are scheduled to arrive this October. Are you registered for direct deposit? If so, your funds should arrive on Thursday, October 8.

Here are other factors that could impact your eligibility:

• Who can get it. To qualify for the $90 rebate, you must be:
  • Enrolled in original Medicare Part B
  • Pay standard Medicare Part B premiums without third-party or high-income adjustments.
  • Not in premium arrears or undergoing a coverage termination process for non-payment.
• Who can't get it. You are not eligible for the premium rebate if:
  • You are enrolled in a Medicare Advantage (Part C) plan
  • You pay the IRMAA
  • Your Part B premiums are fully paid or subsidized by state Medicaid programs (such as the Qualified Medicare Beneficiary (QMB) or Specified Low-Income Medicare Beneficiary (SLMB) beneficiaries), as you did not incur out-of-pocket Part B premium expenses.
  • You are enrolled exclusively in Medicare Part A (Hospital Insurance) without Part B coverage.
  • You have lapsed Part B coverage or active premium delinquencies.

Where did the funds come from?

The Medicare Improvement Fund (MIF) was established in 2008 via the Medicare Improvements for Patients and Providers Act (MIPPA). Before now, the federal government had never spent MIF funds directly on program operations.

For nearly 18 years, Congress used the MIF primarily as a budgetary mechanism. Lawmakers would inflate or reduce the fund's paper balance to help balance out the projected budget costs of unrelated health legislation.

The amount of funding available has changed 28 times since the fund was established. Lawmakers have increased the amount of funding available to the MIF 11 times and decreased it 17 times, according to a Congressional Budget Office (CBO) analysis published in April 2023.

Sit tight and your money should be along soon

The best part of this direct rebate program is that eligible beneficiaries do not need to fill out any forms, submit claims, or register online. Payments will be processed automatically by the Social Security Administration using your existing direct deposit details or mailed address.

Keep an eye out for scammers posing as CMS or SSA officials — Medicare and Social Security will never contact you directly asking for bank info to "claim" your rebate. If you don't receive your rebate in the expected time frame, contact Medicare directly at 1-800-MEDICARE (1-800-633-4227 or TTY 1-877-486-2048).

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Every market cycle produces a handful of IPOs that seem impossible to ignore. The company dominates headlines, investors rush to gain access, and financial media debate whether the stock could become the next great growth story.

But before joining the excitement, investors should ask a more important question: Is the opportunity still attractive at today's price?

Why IPOs are different now

A generation ago, an IPO often marked the beginning of a company's growth story as a public company, following a relatively brief period as a private startup. Today, it more often marks the end of a long private‑market journey.

Many of the most successful businesses stay private for years, raising multiple rounds of capital that can amount to billions of dollars in funding and building scale before they ever list their shares.

That matters because a substantial share of value creation can happen before the IPO. By the time shares begin trading publicly, the company may already be mature and profitable.

Investors buying at the offering price are often not purchasing a ground‑floor opportunity; they are buying after much of the early growth has already been priced in. That's why investors should be careful about assuming that "initial" equals "early."

The valuation problem

When a company is widely discussed and covered positively by the media, demand can quickly overtake discipline. That can push the initial valuation quite high.

Think of it this way: Strong fundamentals do not automatically create strong investment outcomes.

For example, consider two investors who are looking at the same company. One buys during a hot IPO when enthusiasm is high, while the other waits, watches the stock trade for a period of time and buys only after the price resets to something closer to reality.

Even if they own the same company, their outcomes may be very different. Entry valuation can often determine the investor outcome as much as business fundamentals.

Are IPOs a liquidity event?

When a company goes public, the founders, early employees and private investors may already have captured years of growth. The IPO helps those stakeholders realize value, but for public-market investors, that can change the timeline. They often enter after years of private ownership, at a stage when the business is a well-known entity and the valuation can incorporate many years of extensive forward growth assumptions.

That shift means the investor's advantage is often smaller than many assume. If the company is strong, its future may still be bright. But the IPO valuation may already reflect a lot of that optimism.

You may already own it

Another reason to reconsider investing in an IPO is that many large IPOs eventually become part of broad market indexes or are quickly held by actively managed funds.

To put it another way, if you own diversified stock funds, you may gain exposure to a newly public company without ever placing an IPO order.

A series of mega-listings has also prompted several major indexes to adjust their methodology to allow for incorporation sooner than in the past.

Before buying an IPO directly, you should ask whether your existing portfolio already provides exposure through a total market fund, large-cap growth fund, sector fund or another diversified strategy. If the answer is yes, the case for adding a concentrated position weakens.

If the new company is in an industry you already are heavily invested in, you may be doubling down on the same risk without realizing it. Diversification does not eliminate risk, but it can keep a single headline-grabbing stock from dominating your outcome.

A simple IPO checklist

Before reaching out to your adviser to participate in an IPO, consider five questions:

1. Has the company already gone through most of its high-growth phase in private markets?

2. Does the offering price leave room for upside, or does it assume perfection?

3. Would I still want to own this stock if the media attention disappeared?

4. Do I already own similar exposure through diversified funds?

5. If I buy, can I size the position modestly enough that a bad outcome will not derail my plan?

If you're doubting the answers to these questions, it may be worthwhile to show patience.

A better time to decide on an IPO is often before the hype begins, when the price, the business and the role it may play in your portfolio can be evaluated objectively.

A strategy for disciplined investors

For many individuals, a smart way to approach IPOs is to wait, watch and focus on process. Let the stock trade, let the business prove itself as a public company and let the valuation settle.

Sometimes that means missing the first wave of excitement. However, that is often a small price to pay for avoiding a poorly timed purchase.

In some cases, investors may have an opportunity to buy the same company later at a similar or even better valuation, with more information and less emotion, although future valuations are uncertain.

If you do want exposure to innovation, a diversified portfolio may be a better option. Professionally managed strategies can provide exposure to companies as they enter the public markets, often without the need to chase a day-one price.

Where the value is being created

Another important shift for investors to consider revolves around a growing share of value creation that occurs in private markets rather than public markets.

Decades ago, many companies went public relatively early in their development, allowing public-market investors to participate in years of rapid growth. Today, abundant private capital from venture capital firms, private equity sponsors, sovereign wealth funds and other institutional investors enables companies to remain private much longer.

As a result, some of the most dramatic growth in revenue, users and enterprise value may occur before a company ever reaches the public markets.

For qualified investors seeking exposure to earlier-stage innovation and growth, participating through professionally managed private-market strategies may represent a more direct way to access this part of the corporate life cycle, though private investments come with their own risks, higher investment minimums, reduced liquidity and longer holding periods.

The bottom line

IPOs can be compelling, especially when they may involve well-known companies poised to disrupt markets in a positive way. But investors should remember that an exciting story is not the same thing as a successful investment.

A disciplined IPO strategy is about recognizing where value is created, who captured it first and whether the public offering still offers a reasonable purchase price.

For most investors, the recommendation is for patience and diversification. Introducing private markets exposure may also be a way to gain access to a portion of where the value creation has shifted.

The next time a company with a great deal of hype goes public, work with your adviser to review the price, your existing exposure and the role the stock would play in your portfolio. If the answer is not clear, waiting is often the most disciplined move of all.

Related Content

• Hot Upcoming IPOs to Watch
• The 25 Biggest US IPOs of All Time
• How to Read an IPO Prospectus
• How to Invest in Companies Before They Go Public

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Dear Wealth Wise, I'm 64 (almost 65), work full-time, and I'm tired of being told to use AI at my job. Can I retire on $1.6 million if my yearly spending needs are roughly $90,000 and Social Security will pay $3,500 a month (if benefits remain fully payable)? — Seeking Analog

Dear Seeking Analog — In the past year or so, AI integration has picked up tremendously. While some folks are embracing it, for others, it’s quickly becoming a sore spot.

Earlier this year, Talker Research found that 54% of those polled are "getting tired of hearing" about AI, and 30% view it negatively.

Here, our almost-65-year-old reader has clearly had enough of AI and is looking to retire because of it. Is he being impulsive? Does the math work in his favor? Here’s what our experts say.

The numbers might work, but they need to be tested

Our reader’s estimated $42,000 annual Social Security benefit should cover roughly half of annual spending needs. The remaining $48,000 will need to come out of savings.

Using the popular 4% rule, $1.6 million could support $64,000 in annual withdrawals. Since our reader only needs $48,000, they have a pretty good buffer, says Bryan Kuderna, CFP and founder of Kuderna Financial Team. However, he cautions, the often-overlooked factors are taxes and Medicare premiums.

"Spending $90,000 annually is obviously $90,000 of after-tax money," Kuderna explains. "At least a portion of their Social Security benefit [might] be taxable. Then it will be reduced by Medicare premiums, which can be around $200 monthly to much higher depending on their modified adjusted gross income. To have a rough estimate, they [should] assume a $2,500 monthly net Social Security check."

In that case, Kuderna explains, our reader could be looking at a gap, especially if their $1.6 million is sitting in traditional retirement accounts that are subject to taxes on withdrawals. If most of that money is in a Roth account, the math could work, he says. But that "if" needs to be addressed before our reader dives into retirement.

Taxes will vary heavily depending on whether the reader files jointly or as a single taxpayer. Our reader should also factor inflation into his plan, since that $90,000 per year will be worth much less over time.

'Shaky' Social Security is the wild card factor

Our reader suggested Social Security benefits might not be fully payable. They’re not making that up. Social Security Trustees recently reported the program could face broad benefit cuts by late 2032 if Congress doesn’t find a way to shore up its finances sooner.

Caleb Moyer, CFP, CFA, EA, and owner of Moyer Tax Services, says Social Security’s future is worth considering, but it shouldn’t necessarily shape a retirement plan.

"I wouldn't tell someone to keep working indefinitely because they're worried about Social Security cuts," Moyer says. "Instead, I would build a retirement plan that shows what happens if those cuts actually occur."

As Moyer explains, if Social Security benefits are reduced by 25%, our reader would receive $31,500 annually instead of $42,000. (Social Security’s Trustees project a 22% cut, so this builds in even more of a buffer.) That means they would need to withdraw $58,500 from their portfolio each year to maintain their $90,000 spending level.

"Their initial withdrawal rate would increase from 3% to approximately 3.66%," Moyer says.

"That's a meaningful difference, but it doesn't automatically mean retirement is off the table."

This especially holds true if our reader’s $1.6 million is housed entirely in a Roth account. In that case, our reader might not face taxes on their Social Security benefits.

The formula that determines whether taxes on benefits apply accounts for modified adjusted gross income (MAGI) and 50% of one’s annual benefit. Roth withdrawals aren’t part of MAGI, so even without a cut to Social Security, our reader would still be in the clear on benefit taxation, assuming they have no other income.

Social Security cuts aren’t the only thing to stress test.

"I would also want to see what happens if they experience poor investment returns early in retirement or live well into their 90s,” Moyer says. "The short answer is they should be able to retire, but it would be wise to work with a CFP to formulate a distribution strategy."

The right investment mix is key

If you’re going to retire at roughly 65 on $1.6 million, investing that money carefully is key, says Moyer.

"One of the biggest risks for someone retiring at 65 isn't necessarily running out of money because they spent too much," he says. "It's being forced to sell investments after the market has fallen significantly, particularly during the first few years of retirement."

That’s why Moyer recommends what he calls the three-five-seven plan.

"We look at how much someone expects to withdraw from their investments over the first three, five, or seven years of retirement, after accounting for Social Security and other income," he explains. "We then consider setting aside enough money in fixed income … with maturities aligned to their expected withdrawals to cover those years."

Addressing the burnout factor

"If someone has spent decades working and saving," Moyer says, "and their retirement plan shows they can reasonably support their desired lifestyle, there's a real argument for allowing themselves to enjoy the money they've accumulated."

But, he says, "That doesn't mean they need to make an impulsive decision and retire tomorrow. I would encourage them to build a financial plan, understand the potential risks, and determine what their retirement would actually look like."

The reader's birthday is also important. If he burns out and quits with six months to go before turning 65 (when he can start receiving Medicare), he will need to pay out of pocket for private health insurance (ACA). That can easily cost $800–$1,200 a month and derail his $90k year-one budget. If he is only one month away, those healthcare expenses are easier to manage.

David Talley, CFP, ChFC, EA, founder and lead advisor at Talley Wealth, says he understands that AI burnout is real. However, he says, retirement doesn't have to be one big jump.

"A lot of the people I work with step down in stages — maybe part-time, maybe consulting, maybe something totally different they actually enjoy," he says. "Even a little income in those first few years takes pressure off the portfolio right when it matters most."

At the same time, working part-time offers a chance to explore new activities or hobbies and ease the transition. That way, you’re not running away from burnout only to eventually replace it with boredom.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts in this advice column are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

Read More

• I'm 62 and Want to Keep Working, but I Hate Using AI. Can't I Just Do My Job?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• How the AI Entry-Level Freeze Is Delaying Retirement
• I'm 60 With $4 Million: Can I Have a Luxury Retirement?

Editor's note: This is the second article in a two-part series on investing via Delaware statutory trusts (DSTs) investing. The first is Why a "Fee-Based" DST Investing Sales Pitch is a Red Flag for Investors.

Delaware statutory trust (DST) investors sometimes ask, "Why am I paying taxes on more income than I actually received in cash?"

At first glance, it may seem confusing. However, this is not unique to DST investing — it is the same concept that has applied to direct real estate ownership for decades.

This is how we explain it at Kay Properties and Investments, which has been helping thousands of DST investors for nearly 20 years, and where I'm the CEO.

A simple example

For decades — indeed, for generations — real estate owners and landlords have followed the same basic financial principle: Not every dollar of rental income should be distributed immediately. A prudent owner plans ahead by setting aside reserves for future expenses that potentially protect and preserve the property's value.

Imagine you personally own a commercial building that generates $200,000 in annual rental income. During the year, you discover the roof has reached the end of its useful life and will need to be replaced in the near future. Rather than distributing every dollar of rental income to yourself, you wisely retain a portion of the cash flow each month to build a reserve fund for the future roof replacement.

At year-end, you may have only withdrawn $150,000 in cash, with the remaining $50,000 held in the property's bank account as reserves.

Even though you didn't receive that $50,000 personally, it is still income generated by your property. Under IRS tax rules, you generally report the property's taxable income — not simply the cash you chose to distribute to yourself.

At first, this may result in you paying tax on income that remained in the property's reserve account.

However, when those reserve dollars are ultimately used to replace the roof (or any other type of repair or investment in the property, such as resurfacing the parking lot, renovating space for a new tenant or completing other improvements), those expenditures become investments back into the property.

As those costs are recognized for tax purposes over time — major improvements are generally depreciated over their recovery periods rather than deducted all at once — they generally provide write-offs, expenses and future tax benefits to the property's owners, making the earlier timing difference largely a matter of when the expense and tax benefit is realized rather than whether it is realized.

This has been standard practice among real estate owners for decades and is simply part of responsible property ownership and long-term asset management.

How rental income is reported in a DST

Just as with direct real estate ownership, a DST property receives rental income from its tenants throughout the year.

Business tenants that pay rent in the course of their trade or business generally report the rent paid to the property on IRS Form 1099. The DST asset manager receives these forms on behalf of the investors and typically prepares a Nominee 1099 allocating each investor's proportional share of the property's gross rental income.

The Nominee 1099 is primarily an informational reporting document that helps reconcile the rental income reported to the IRS. It is not the document used to calculate an investor's taxable income. Instead, it serves as a record-keeping tool that ties together the gross rents reported by tenants with each investor's ownership interest in the DST.

In addition, DST investors receive a calendar-year balance sheet and income statement for the property. These financial statements reflect the full year of property operations and are prepared by the DST sponsor.

This financial information breaks down the entire DST property's financial information as well as further details of each individual investor's percentage ownership of the DST and their corresponding pro rata numbers. Typical DST financial information at year-end will include the property's gross rental income, operating expenses, net income and balance sheet.

The net income based on your pro rata percentage interest in the DST is an important starting point, but your CPA or tax preparer will adjust it — most notably for depreciation — when preparing your tax return, generally relying on the tax reporting package (often a grantor letter) provided by the sponsor rather than the operating statement alone. (Read on for why cash-basis net income and taxable income are not the same figure.)

Why cash distributions and taxable income may be different

DST investors may have questions if the amount of cash distributions they receive during the year is less than the taxable income reported by the DST property.

This difference is completely normal in commercial real estate whether the investor owns the property outright or a percentage of a DST.

One of the primary reasons is that prudent property management often requires retaining cash to build reserves for future property needs rather than distributing every available dollar to investors.

Those reserves may be accumulated for:

• Tenant improvements for lease renewals or new tenants
• Leasing commissions to secure a new tenant
• Roof replacements
• Parking lot resurfacing
• HVAC replacements
• Landscaping and exterior improvements
• Other major capital expenditures that preserve and improve the property

Although these reserve dollars may temporarily reduce current cash distributions, they remain assets of the property and continue to belong to the DST investors collectively based on their proportional ownership interests.

The reserves are not owned by the DST sponsor or asset manager — they are investor-owned funds being held at the property level for future capital needs. If reserve funds ultimately are not needed for their intended purpose, those funds remain property assets and will be distributed back to investors on a pro rata basis upon the sale or disposition of the property, consistent with the governing DST documents.

Two other reasons taxable income can differ from cash distributions received

Depreciation. One of the most significant tax features of real estate is depreciation. Each year the tax law allows the property's owners to deduct a portion of the building's cost, even though no cash is actually spent.

In the early years of a DST hold, depreciation often shelters a substantial portion of the property's net income — which is why many investors initially report taxable income that is lower than the cash they receive.

As those depreciation deductions decline over the hold period, taxable income tends to rise relative to cash flow.

Mortgage principal. In a leveraged DST, repaying mortgage principal uses the property's cash but is not tax-deductible. As depreciation deductions decline and a growing share of each mortgage payment is applied to principal, an investor may report taxable income that exceeds the cash actually distributed.

This effect — sometimes called "phantom income" — is a normal feature of leveraged real estate, whether owned directly or through a DST, and works alongside the reserve timing difference described in the main article.

The real estate ownership timing difference: Taxes today, tax benefits tomorrow

One point that is often overlooked is that reserve building generally creates a timing difference, not necessarily a permanent tax cost.

During the period reserves are being accumulated, an investor may report more taxable income than the amount of cash actually distributed because some of the property's cash flow has been retained for future capital needs.

However, when those reserve dollars are eventually used — to replace a roof, resurface a parking lot, install HVAC systems and so on — the property incurs those expenditures on behalf of its owners. Because each DST investor owns a beneficial interest in the property, each investor will receive their proportional share of the expenses and write offs associated with those capital expenditures.

As those reserve dollars are invested back into the property, the related expenses and write-offs are passed through to investors based on their ownership interests, helping offset taxable income over time. Because most of these items are capital in nature, the related deductions are generally realized gradually through depreciation and amortization rather than entirely in the year the reserves are spent.

In other words, while a DST investor may have paid tax earlier because reserves were accumulated instead of distributed (the same way as when they directly owned real estate and built reserves), those future expenses will help offset taxable income in later years.

What initially appears to be paying tax on "income you didn't receive" is often simply a matter of tax timing rather than an additional permanent tax burden. This is the case whether you own an interest in a DST or own a property outright.

Example timeline: How a reserve timing difference works

Imagine you own a 1% interest in a DST.

Year 1

• Rental income allocated to you: $100,000
• Cash distributed to you: $95,000
• Reserved by the property for future capital improvements: $5,000

Although you received only $95,000 in cash, the property earned $100,000, so you may report taxable income based on the property's operations rather than simply the cash distributed. (This illustration is simplified; your actual taxable income would reflect operating expenses, mortgage interest (if it were a leveraged DST but not if it was a debt free DST) and depreciation.)

The $5,000 was not paid to the sponsor — it remained your money as part of the property's reserve account, along with the reserves attributable to the other DST investors.

Year 2

The property uses the reserve funds to:

• Replace the roof
• Resurface the parking lot
• Complete tenant improvements for a new lease
• Pay leasing commissions to secure a new tenant

Because you are a beneficial owner of the DST property, your proportional share of those capital expenditures is reflected in the property's tax reporting. Those expenditures generally create future tax benefits that help offset taxable income in later years, generally realized through depreciation and amortization over the assets' recovery periods.

The result: Although you may have paid tax on the additional $5,000 in Year 1 because it remained in reserves, those reserve dollars were ultimately invested back into the property for your benefit.

The associated future expenses help offset taxable income over time, making the difference between taxable income and cash distributions a matter of timing rather than a permanent additional tax burden.

The bottom line

The difference between DST cash distributions and taxable income is often misunderstood, but it is simply a reflection of how commercial real estate ownership has worked for decades regardless of if it is owned outright by the investor or by a DST.

Think back to the example of the landlord who owned a building and prudently retained a portion of rental income to build reserves for a future roof replacement. Although that owner received less cash in hand during the year, the reserve funds still belonged to the owner, remained invested in the property, and were ultimately used to preserve and enhance the value of the real estate.

Those expenditures ultimately generated expenses associated with those improvements, helping offset taxable income over time.

A DST simply follows that same long-established and widely accepted real estate ownership practice through a professionally managed ownership structure.

As always, because every investor's tax situation is unique, investors should consult their CPA or qualified tax adviser regarding the tax treatment of their individual DST investment.

Related Content

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• Six Risks of Delaware Statutory Trusts in 1031 Exchanges
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells
• How to Use DSTs and 1031 Exchanges for Diversification
• How Do You Step Away From Your Real Estate Empire Without Facing a Giant Tax Bill?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For many public school teachers and other K-12 employees, retirement planning involves more than a pension and a single workplace savings account.

Depending on the employer, educators might have access to both a 403(b) plan and a governmental 457(b) plan, each offering tax-advantaged savings and features that can become particularly useful at different stages of a career.

Because the plans are often presented separately during benefits enrollment, employees might assume they need to choose one or the other.

In many cases, eligible workers can contribute to both, creating additional savings capacity along with more flexibility in determining when and how retirement assets are eventually used.

Why having both plans can matter

A 403(b) is available to employees of public schools and certain nonprofit organizations and functions in many ways like the 401(k) plans commonly offered in the private sector.

A governmental 457(b) is available to many state and local government employees.

Both generally allow employees to save through payroll on a tax-deferred basis, with Roth contributions also available under some plans.

For 2026, the standard employee contribution limit is $24,500 for each plan. Eligible workers age 50 and older might also qualify for catch-up contributions, while participants ages 60 through 63 might be able to make larger catch-up contributions if their plans allow it.

A 403(b) might also provide an additional catch-up opportunity for certain employees with at least 15 years of service.

The separate contribution limits can be especially valuable for educators who are able to save beyond the maximum permitted in one account. An employee with access to both plans could potentially contribute $24,500 to a 403(b) and another $24,500 to a governmental 457(b) in 2026 before applicable catch-up contributions.

Few households will be in a position to contribute the maximum to both accounts every year, but the additional room can become valuable later in a career when earnings are higher, major expenses have declined, or an employee is trying to accelerate retirement savings.

A 457(b) can offer added flexibility

The differences between the two plans become more important as retirement approaches.

Governmental 457(b) plans can provide added flexibility for employees who leave their employer before age 59½ because distributions after separation from service generally are not subject to the 10% additional tax that can apply to early withdrawals from other retirement accounts.

Different rules and exceptions apply to 403(b) plans, making the expected timing of retirement an important consideration when deciding how to allocate savings between the two accounts.

Consider a teacher who began working in her early 20s and expects to retire after more than 30 years of service. If she leaves her school system before she expects to draw heavily from her other retirement accounts, assets accumulated in a 457(b) could provide another source of income during the transition.

An educator planning to remain employed longer might place more emphasis on features of the 403(b), including the additional catch-up provision that might be available to long-tenured employees.

How the plans can work together

The value of having access to both accounts can change over the course of a career. A teacher in the middle of a career might contribute primarily to a 403(b) while balancing housing costs, college expenses or other financial priorities.

As those expenses decline, adding contributions to a 457(b) can provide another way to increase tax-advantaged retirement savings.

Retirement timing should also factor into the decision. An educator considering an earlier retirement might value the withdrawal flexibility of a governmental 457(b), while a long-tenured employee trying to increase savings late in a career might want to determine whether the 403(b) plan's additional catch-up provision applies.

Employees with sufficient income to contribute to both can also build separate pools of retirement assets that could provide additional flexibility when they begin drawing income.

Investment choices, fees and plan features should be part of the comparison, as well. Two plans offered by the same employer can have different investment menus, administrative costs, Roth options and loan provisions.

Understanding those differences can help employees decide where additional retirement dollars can be best directed.

Review your options before retirement

Educators approaching retirement should review the rules governing each account well before they expect to leave the workforce. The tax treatment of withdrawals can depend on the type of plan, the employee's age, when employment ends and other circumstances.

Reviewing those provisions several years ahead of retirement can provide more opportunity to coordinate workplace accounts with pension income, Social Security and other savings.

Benefits enrollment can also be a useful time for employees who have spent years automatically contributing to the same plan to revisit what their employer offers.

Asking whether both a 403(b) and governmental 457(b) are available, reviewing contribution and catch-up provisions, comparing investment choices and understanding withdrawal rules may uncover options that received little attention earlier in a career.

Teachers spend much of their professional lives planning around school years, grade levels and milestones that can be seen well in advance. Retirement benefits deserve the same periodic review.

Understanding how a 403(b) and 457(b) can work together might give educators more room to save during peak earning years and greater flexibility when the time comes to turn those savings into retirement income.

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• Is Your Portfolio Missing This Key Ingredient?
• Eight Steps to Help Get You Through the Open Enrollment Jungle at Work
• The Home Stretch: Seven Essential Steps for Pre-Retirees
• Catch-Up Contributions for Higher Earners in 457(b) Plans: What You Need to Know
• What to Do If You Plan to Make Catch-Up Contributions in 2026
• Pros and Cons of 403(b) Plans

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

In a Berkshire Hathaway shareholder letter, Warren Buffett once advised, "Leave the children enough so that they can do anything but not enough that they can do nothing."

Many parents share this sentiment. A recent survey from Kiplinger and Morning Consult found that parents hope their adult children use an inheritance to improve their lives (22%), not waste it (20%).

Once it's handed over, though, an inheritance can go toward things you'd never condone, or the windfall can shift a child's behavior in unhealthy ways in the long run.

Take David and Kathy, a hypothetical couple who gave their 20-something twins $100,000 each. Instead of using it to buy a house or invest wisely, one twin quit a steady job to day-trade, while the other used it to buy a luxury car that would depreciate over time. What was meant as a gift to open up the future instead became a setback or wasted opportunity.

As Joy Slabaugh, a certified financial planner (CFP) and founder of the Wealth Alignment Institute, explains: "Money can unintentionally interfere with motivation, identity, autonomy or family relationships."

Fortunately, avoiding that outcome doesn't have to change your desire to give or how much, just the way you give it. This holds true for parents as well as grandparents.

Why early inheritances can backfire

An early inheritance is a chance to help adult children while you're still around to see them enjoy it. While more adult children would rather get financial help now (45%) than a larger inheritance later, only 14% of parents say they'd prefer to give now, according to Kiplinger's survey.

Part of that hesitation might stem from research such as a 2026 study that found 42% of heirs spend their entire inheritance within a single year of receiving it. Going from having little to suddenly having a lot can trigger impulsive spending. Depending on the amount, it can also dull the motivation to work hard or invest.

Psychological factors are at play, too. Heirs can experience what researchers call "mortality salience" — the subconscious discomfort of handling "death money," which can prompt rapid spending as a coping mechanism.

Unearned money also tends to be treated more casually than a paycheck. Behavioral economists call this the "house money effect." People spend windfalls, gifts and winnings more freely than money they worked for, as though it were the casino's money rather than their own.

Control of an early inheritance with incentive trusts

For parents who want to give each adult child an early inheritance without fear that it will become a slush fund to live on, one possible solution is an incentive trust.

An incentive trust releases money only when your child meets certain conditions you've set, rather than handing everything over at once. Think of it as a gift with instructions attached. You, the parent, write the rules, while a trustee checks that each one is met before releasing any money. Your child receives a payout only after clearing the bar you set.

If David and Kathy had used an incentive trust, they could have nipped the twins' spendthrift behavior in the bud. Some common conditions they might have required are: a college degree; matching income from a job; or releasing money for a specific step such as buying a first home. Other requirements act as guardrails, such as pausing payouts if a child struggles with substance abuse.

Jon Lapp, a CFP and founder of Haven Financial Advisors, suggests, "Reasonable provisions might support college or vocational training, match retirement savings, help purchase a first home, fund a credible business plan, or give an independent trustee discretion to make staged distributions as the beneficiary demonstrates financial responsibility."

Ultimately, the purpose of an incentive trust is to encourage a desired action or prevent mismanagement. "I would consider this type of trust when the inheritance is large relative to the child's experience, or when there are specific concerns involving addiction, impulsive spending, creditors or an unstable relationship," Lapp says.

What to know before setting up an incentive trust

While an incentive trust sounds good on paper, it can turn into a problem in practice without careful planning.

For instance, Lapp says, "Conditions based on earning a particular salary, entering a certain profession, getting married or having children can become unfair very quickly. Even an earned-income match can penalize a teacher, caregiver, entrepreneur or disabled beneficiary."

Rigid rules can also become outdated, fail to account for unexpected life events such as illness or injury, and place trustees in difficult emotional positions. "When parents use wealth to protect, control, rescue or reward their children, the financial gift can become emotionally complicated for everyone involved," says Slabaugh.

When weighing how best to give an early inheritance, she recommends first asking the right question: "Rather than asking, 'How do we keep our kids from wasting the money?' I encourage families to ask, 'What do we want this wealth to make possible for our children, and what do we want it to teach or reinforce?' "

Other ways to help sooner rather than later

If you plan to give as much as a six-figure sum to your adult children, Lapp advises starting small. "Smaller gifts over several years can provide a useful test of how the child handles money," he says.

Other options Lapp offers include helping fund a Roth IRA when the child has eligible earned income, using a parent- or grandparent-controlled 529 account, paying tuition or medical costs directly to the provider and structuring housing help as a formal loan rather than an informal blank check. He points out that direct tuition and medical payments can also qualify for specific federal gift-tax exclusions when handled correctly.

When the money supports positive choices a child has already made, it can set healthier expectations. That's what parents want most. As Lapp puts it, "The primary goal is to help the next generation, without enabling poor financial management, or creating the expectation that they will always be 'bailed out' by mom and dad."

More Trillion Dollar Talk

• How to Talk to Your Adult Kids About Their Inheritance
• Shielding Your Heirs: The Expert Guide to a Tax-Free Inheritance
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What You Can Do About it
• Why Leaving an Equal Inheritance to Your Children Could Backfire

By spring 1961, NASA was already launching rockets. Alan Shepard had just ridden one into space and back, a 15-minute flight.

Twenty days later, President John F. Kennedy raised the stakes in one sentence: "I believe that this nation should commit itself to achieving the goal … of landing a man on the moon and returning him safely to the Earth."

A quarter of a million miles, and back. Getting home wasn't an afterthought. It was in the mission from day one.

Nobody responded by shopping for a bunch of equipment. This was unknown territory. The mission plan came first, followed by years of engineering and training.

Once they had the mission mapped out, and engineering had their strategies in place, then they gathered the materials and tools needed for the job ahead.

How retirement planning is like that

Retirement planning is no different. While you are working and the paychecks keep coming in, you're flying short missions. Mistakes get refueled by the next contribution.

Retirement raises the stakes the way the moon did: The trip is longer, refueling stops, and the whole point is coming home safely (not running out of money).

The retirement planning mission is defined by your lifestyle and legacy goals. The engineering comes second, and its job is to get more out of your money while it carries out that mission.

Some retirees want more legacy or more flexibility and will accept a bumpier ride to get it. That's not wrong — it's your preference.

Others give up some upside for a smoother, more predictable ride, trading what matters less for more of what matters more.

There is no right or wrong answer. You decide the mission. Everything else is engineered around it.

The problem today is that too many soon-to-be retirees start buying tools and materials before the mission is defined: An annuity here, a REIT there, a CD because the rate looked attractive.

After the equipment is bought, they look to see what they can build. That's backward, and it's what often gets in the way of a good retirement plan.

Here's how to build a more comprehensive retirement plan, step by step.

Projections: The mission comes first

Your plan is your mission statement:

• What kind of retirement experience do you want?
• How much of your wealth is for lifestyle and income?
• How much is for legacy?

On the income side:

• Do you want more flexibility with a wilder ride?
• More predictability with less thrill?
• A happy middle built just for you?

Remember Kennedy's second clause: The mission was the safe return. Growing your money to become the richest person in the graveyard was never the mission either. Living on it, for decades, is.

Notice what we're doing here: We're defining the path forward, guided by the mission expectations. Not one product has been mentioned.

Strategies: Engineering comes second

Apollo crews logged thousands of simulator hours, and the engineers running the simulations rarely allowed a clean flight. They fed the crews the broken versions: Failed engines, dead radios, alarms mid-descent.

The crews knew the conditions ahead better than anyone alive and still trained for the ones no one could foresee.

This is your strategy session. If these dollars are going on this journey, how do they travel efficiently? This is where tax strategy and withdrawal sequencing come into play, where income, taxes, healthcare and legacy get coordinated. Mini missions, all serving the big one.

During Apollo 11's landing on the moon, computer alarms flashed, and then they discovered the landing zone was full of massive boulders. Neil Armstrong didn't panic or wing it. He flew past them to smoother ground and landed.

The crew never predicted that moment. However, they were prepared to react, and a prepared reaction is better than a risky prediction.

Investments and products: Equipment comes third

Only after the mission was set did the equipment get its assignments, and every piece was a specialist. The Saturn V was the rocket itself, 36 stories tall and nearly all of it fuel. It had one job: Throw the crew toward the moon. It burned itself out in minutes and fell away into the ocean, stage by stage.

The lunar module was the spindly, foil-wrapped lander riding up top, so specialized it could fly only in the vacuum of space. It carried two men down to the surface, lifted them back off and was left behind.

And the heat shield did absolutely nothing for eight days. Dead weight, riding in silence, until the capsule hit the atmosphere at 25,000 miles per hour, and the shield burned away, layer by layer, so the three men inside wouldn't.

No component was chosen on a vendor's pitch. Each was recruited because the mission required it.

Your investments and products deserve the same discipline. Diversify your assets by strategy, not investment ambiguity or hope that growth solves everything. Each investment or product should do a specific thing, at a specific time, in a specific way.

Some fund income in the early years. Some chase growth you won't touch for a decade. Some sit quietly until the markets crash and then get tapped for income while your other accounts recover. (For more on this strategy, check out my book, How to Retire on Time.)

Follow systems, not sentiment

Mission Control ran on flight rules, checklists and go/no-go polls written before launch. When an oxygen tank exploded on Apollo 13, nobody improvised from the gut. They worked the procedures and brought the crew home. They followed systems, not sentiment.

Write your processes down while you're calm so that when the markets crash, taxes go up, or something else unexpected happens, you'll know what to do. A process invented mid-crash is not a process. It's a fear-based reaction.

Run your retirement in this order:

• Plan (mission) first
• Strategies (engineering) second
• Investments and product (equipment) third

That way, the product pitch loses its power. Buy this annuity. Lock in this rate. Try this tool. Those lines don't work on someone with a mission. When the plan comes first and the strategies second, the right tools naturally select themselves.

So, before anyone shows you another product, ask the questions NASA asked before anything left the ground: What's the mission?

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It starts at the very beginning. You hold your baby in your arms and feel a deep, primal desire to give them everything they need. At some point, though, it's time to tighten the purse strings and help them make responsible decisions.

Giving your kids everything they want can cause more problems than it solves, not only during their formative years, but also when they're well into adulthood. There can be a fine line between financially helping adult children and putting them into a situation in which they're financially reliant upon you.

The 'too-nice neighborhood' problem

According to a recent survey from mortgage lender Veterans United Home Loans, more than half of parents of adult children are willing to help their kids purchase a home. Sometimes that's helping with a down payment or closing costs. Other times, it's cosigning a loan.

Problems quickly arise when parents help kids buy houses they can't afford to maintain on their own. Whether it's a monthly payment that burdens the budget or homeowners association (HOA) fees that feel excessive, helping your kids buy a house that they can't afford can be more of a curse than a blessing.

Instead, help them buy within their means or match their down payment to ensure they have some financial skin in the game.

Avoid lifestyle inflation by proxy

If you paid for a somewhat luxurious life for your kids or took extravagant vacations when they were younger (and continue to do so into their adult years), your kids might feel that a certain lifestyle is the norm and come to expect it.

Trying to keep up with a lifestyle once provided by financially established parents can rapidly become problematic.

Covering rent, vacations or luxury expenses tells your kids that their current lifestyle is normal even when it's not sustainable. Once support stops, the adjustment can be brutal, and the kids might try to scramble to afford the same niceties to which they've become accustomed.

This isn't to say that you can't occasionally splurge on a fun family vacation or other luxury, but rather to suggest that boundaries are clear that such a splurge isn't to be expected.

You've probably learned how to deal with lifestyle inflation, as many successful people have. Don't allow it to become your kids' problem by proxy.

Gifts should build habits, not dependence

You can be generous with your adult kids without risking bigger problems. Offer to pay for tools that can create momentum so they can stand on their own, such as professional certifications, seed money for a business or contributions to a retirement account.

The goal is empowerment, not entitlement. If you can help set them up for success, do it with clear expectations that you thoroughly discuss.

Ensure the "help" you provide is actually helpful — a certification in a career your child has no interest in will likely be a waste of money, as would seed money for a business your child wouldn't be able to keep afloat.

Talk openly about the trade-offs

If you gift something to adult kids, explain what the gift does and doesn't cover. If you buy a home, clarify who handles taxes and maintenance. If you pay their tuition, make clear it's a one-time payment. Clarity today prevents conflict tomorrow.

Examine the complications and relational strain that can come with changing your role with your child from "parent" to "lender" and decide if it's worth it. If you expect your child to pay you back, have a clear agreement on the terms so there's no ambiguity in the payback of the funds.

Protect your own financial health

Parents often dip into retirement savings to help adult children, but that kindness can jeopardize long-term stability. It can be a bad idea to earmark money to fund your adult child's lifestyle when you might need that money for your retirement.

Remember: Your kids can borrow money for a house or an education, but you can't borrow your way through retirement. Being financially ill-prepared for retirement because you're helping your kids can backfire on everyone involved if they have to then step in to help you survive.

Helping your adult kids in a productive way can be beneficial, but putting your own finances at risk can damage your financial health. Instead, choose when you want to help, and be clear in your intentions of wanting to help your kids thrive in adulthood on their own.

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• If You're in Your 50s or Nearing Retirement, Protecting Your Well-Being Is as Important as Protecting Your Savings
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• The Secret to Life, Liberty and the Pursuit of Happiness? It Isn't Money. A Financial Planner's Take on the American Dream
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Do I need a will, a trust or both? It's one of the most common questions we hear, and the answer is rarely simple. It depends on your family, your assets, your priorities and how much work you're willing to do now to make things easier for the people you leave behind.

Here's how we typically walk clients through the decision.

The core difference

A will is an ancient tool, which traces back to English common law and the Middle Ages. In many ways, it still operates on a system that's hundreds of years old.

When you die with a will as your primary estate planning vehicle, your estate goes through probate, which is a court-supervised process of settling what you owned. In most places, probate is slow, expensive and public.

Some states are less slow, less expensive or less public, but in general, probate is a complex and costly legal process.

A trust does much of the same work as a will, but it's a far more modern structure. A revocable living trust functions as a will-replacement vehicle. It helps you arrive at the same destination — your assets go to the people you choose. However, while a will typically goes through the probate court process, a trust can bypass it.

Some people need both

If your plan is built around a revocable trust, you still need a will. It will just play a different role. This fact tends to surprise a lot of people.

Think of it this way. A "will-only" plan uses the will to say who gets what and when. But once you have a revocable trust, the trust holds those details, and the will becomes a safety net beneath it.

For a trust to work, assets must be inside it or have a way to get in. If you pass away before you've retitled an account or updated a beneficiary designation, your will acts as a catch-all.

Instead of spelling out your whole family story, this will just says one thing: Sweep whatever is left in your probate estate into the trust to be administered under its terms.

The myths that hold people back

The biggest misconception we hear is that trusts are wildly expensive and only for the wealthy. Most people simply don't know what a trust is or how it works.

About 95% of the time, when someone says "trust," they mean a revocable living trust (also called a living trust). There are many other kinds of trusts, including spousal lifetime access trusts, life insurance trusts and more. These trusts typically don't enter the picture until you've built significant wealth.

Myths exist on the will side as well. Many people believe a will avoids probate. It doesn't. Others assume that being named executor (or personal representative) automatically puts them in charge. It doesn't either.

Until a will goes through the probate process and a court appoints someone as the executor or personal representative, the person named in the will has no legal power or authority.

Three key questions to ask yourself

If you're trying to decide between a will and a trust, ask yourself the following:

1. How would your family get by in the weeks after you're gone?

Probate can slow down access to money. Ask how important it is that your loved ones, especially a surviving spouse, can pay bills and keep living their lives. If immediate access matters, avoiding probate through a revocable trust deserves a serious look.

2. Who do you want doing the work?

Setting up a trust takes effort during your lifetime. Some families place a high value on making things efficient for their kids and grandkids while others don't. The question is whether you'd rather put in the work now or leave the next generation to handle it later.

3. How much do you care about privacy?

Probate usually produces an inventory of what you owned. In most states, that inventory is a public document.

Some people do nothing but go through probate records looking for houses to purchase at a discount, and few families enjoy getting a "sorry for your loss, want to sell the house?" call. A trust keeps those details private.

Overall, the choice between a will and a trust isn't about which is fancier or who's wealthy enough to need one. It comes down to how much you value privacy, how quickly your family needs access to your assets, and whether you'd rather do the work now or leave it to the next generation.

Once you understand what each document does and what it doesn't, the right answer will come into focus.

Shelby Anderson, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Shelby works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Patrick Schultz, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Patrick works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

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• When a Will Isn't Enough, Families Can Let Trusts Do the Heavy Lifting: Here's How

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

One of the biggest misconceptions I encounter is that inherited investments should simply be sold.

Stocks are not cash. Many portfolios are built around long-term goals, whether that's preserving family wealth, generating future income or supporting future generations. Selling everything may often seem like the easiest option, but it doesn't always align with the investor's wishes.

This happens all too often. Investors spend years building wealth through brokerage accounts. They follow the markets, make strategic decisions and carefully build portfolios designed to achieve long-term financial goals.

Then, when it's time to put an estate plan in place, those same accounts are often left out of the conversation.

When stock portfolios aren't properly addressed in an estate plan, loved ones can be left trying to answer questions they were never prepared for.

• Should certain investments be kept or sold?
• Was the portfolio intended to support future generations?
• Were there specific goals behind the investment strategy that beneficiaries should understand before making big decisions?

If there are no clear instructions, even the most well-intentioned estate plans can become a headache for beneficiaries and cause confusion or worse — costly mistakes.

Most Americans haven't planned for their assets

Estate planning remains widely neglected. More than half (56%) of Americans don't have a will or trust, according to Caring.com's 2025 Wills Survey. People still view estate planning as something that can wait until later or is only for wealthy individuals.

This myth leads to countless assets being left without clear instructions for the people who will eventually inherit them.

Investing has also become more accessible than ever. More than 145 million people globally used stock trading apps in 2024, according to the Business of Apps Fintech App Report 2025. These apps give individuals easy, user-friendly access to building and managing their own portfolios.

The challenge is that while investing has become easier, planning for what happens to those investments after death often doesn't take place. Countless investment accounts exist without any clear estate planning instructions attached to them.

This problem isn't limited to people who have no estate plan at all. I often see it among people who have already taken the important step of creating one.

They may have a will. They may have discussed their wishes with family members. They may even have worked with attorneys or financial professionals. Yet their stock portfolio remains largely undocumented.

Family members may know the accounts exist but have little understanding of the intentions behind them. They may recognize certain holdings but don't understand why they were purchased in the first place.

• Was a particular investment intended to be held for another decade?
• Was the portfolio built to generate income for a surviving spouse?
• Was preserving the account more important than distributing it immediately?
• Who was the investor's financial adviser?

Those answers, along with important details about the investor's risk tolerance, are rarely documented, and beneficiaries are often left making important financial decisions without the context that guided the investor's strategy in the first place.

Stock liquidation isn't always the best plan

I've seen beneficiaries inherit a portfolio and begin liquidating positions simply because they don't know what else to do. That tactic is understandable. When there are no instructions, people are forced to make decisions based on limited information.

Some investors may have wanted heirs to retain certain long-term investments. Others may have wanted the portfolio to support goals such as education, home purchases or broader family support.

There may also be important tax implications beneficiaries should understand before taking action. Without guidance, those intentions can easily be lost.

The situation becomes even more complicated when there is no transfer on death (TOD) designation, no beneficiary designation or no trust directing the asset.

In those cases, the stock portfolio will typically become part of the probate estate, creating additional delays and expenses, and leaving the management of the portfolio to the administrator or executor rather than the ultimate beneficiary.

Before assuming a portfolio should simply be liquidated upon their death, investors — whether self-managed or accredited — should decide how they want those assets handled.

• Should certain investments be retained?
• Should others be sold and distributed?
• Have those wishes been documented clearly enough for beneficiaries and executors to carry them out?

The goal here is to leave enough context behind so beneficiaries aren't forced to guess. That starts with:

• Maintaining an inventory of brokerage accounts
• Keeping beneficiary information current
• Documenting the purpose of the portfolio
• Clarifying which holdings should be kept or sold
• Leaving contact information for any financial professionals involved

These details will make a significant difference when beneficiaries are trying to make informed decisions during a difficult time.

What happens when no instructions exist

When no instructions exist, families are often left piecing together information on their own. In many cases, the first challenge is simply identifying what accounts exist. A family may know a loved one invested throughout their lifetime, but have no idea where those accounts are held.

Locating records, accessing accounts and understanding how they fit into the broader estate can take significant time, creating unnecessary administrative burdens for executors.

Then comes the decision-making. I've seen beneficiaries inherit portfolios and immediately begin selling assets because they believe that is what they're supposed to do. I've also seen families disagree because each person has a different understanding of what the investor intended.

Nobody is acting with bad intentions. The problem is that they're trying to make important decisions without enough information. What should have been a relatively straightforward transfer of wealth becomes a far more complicated process than it needs to be.

What investors owe their beneficiaries

A few clear instructions go a long way and can help loved ones understand the purpose behind a portfolio, preserve wealth where appropriate, avoid unnecessary confusion and make more informed decisions.

Estate planning is not simply about transferring assets. It's about transferring clarity. You have to remember that the more guidance investors leave behind today, the easier it will become for beneficiaries to make thoughtful decisions when they don't have someone to guide them.

Related Content

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• 5 Questions to Ask a Financial Adviser About an Inherited Stock Portfolio
• Will This 'Tax' Tear Your Family Apart, Even Though Their Inheritance Is Split Equally?
• 3 Life Events That Should Trigger an Immediate Estate Plan Review
• What Really Happens in the First 30 Days After Someone Dies (and Where Families Get Stuck)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million.

They're sharing how they did it and what they're doing with it. This time, we hear from a married 60-year-old transportation truck driver based in Jordan, Minnesota. He reports that he grew up north of the Twin Cities and currently pulls in $130,000 a year.

See our earlier profiles, including a writer in New England, a literacy interventionist in Colorado, a semiretired entrepreneur in Nashville and an events industry CEO in Northern New Jersey. (See all of the profiles here.)

Each profile features one person or couple, who will always be completely anonymous to readers, answering questions to help our readers learn from their experience.

These features are intended to provide a window into how different people build their savings — they're not intended to provide financial advice.

To learn what these millionaires have taught us, check out the articles 5 Key Insights We Learned From 50 Millionaires and 5 Things 50 Millionaires Wish They'd Known Before They Retired.

And to hear more about My First $1 Million, you can check out this podcast with bestselling author and tax attorney Toby Mathis:

The Basics

How did you make your first $1 million?

I started investing in a 401(k) at 26 years old. Followed advice from wife's grandfather.

My mom was a single parent and lived her whole life paycheck-to-paycheck. Even in retirement for her, she had to go back to work to make ends meet.

I was determined I did not want that.

What are you doing with the money?

It's all being managed by Fidelity in their proprietary investment portfolios.

We do plan on at least one family trip a year with our kids, but that's not being paid with the investment accounts, but rather our regular income.

The Fun Stuff

Did you do anything to celebrate?

Not really, but someday we will for our anniversary. I used to tease my wife we were due for a board meeting. I would take her out to dinner every time $100,000 was made.

She never knew what I was talking about until I had over a million saved up.

What is the best part of making $1 million?

The security of believing you are going to be OK and don't have to worry about money if you live within your means the rest of your life and just live off of the money your money makes.

Did your life change?

No, not really.

Does anyone know you're a millionaire?

Fidelity and my kids know, but outside of that, I just tell people I'm set for retirement and that I won't have to work anymore after I feel I'm done.

Any plans to retire early?

I was let go from my previous job after a part of the company I worked for closed that department. Not planning on retiring until 65 because I don't like the idea of paying for my health insurance. And I still like working and being around people.

Looking Back

Anything you would do differently?

I took $50,000 out of my 401(k) at about 40 years old to buy a business. Three years later, the business was broke, and we were going to be getting foreclosed on our home.

Business got sold, and we did a short sale on our house.

My balance on the 401(k) was probably around $125,000 before I took that money out.

What advice would you give to your younger self?

Automatic withdrawal is the best thing. You don't see it, you don't spend it.

My first suggestion was going to be to not splurge on toys, but I have always been able to save some money up to buy old cars, motorcycles and snowmobiles and pay cash for them, and I consider them an investment as well.

Did you read any books that helped you on your journey?

We did a Learn the Stock Market class through local community education related to investing, but I did read a lot of MarketWatch and Yahoo Finance and have a Motley Fool membership, so I was always reading something and had a decent idea as to what was going on with the market.

Did you work with a financial adviser?

Not until I was let go from my previous work. I have had an account with Fidelity for the last 15 years and was investing everything on my own until I was let go.

Then I signed up for Fidelity's program, and they have been managing my investments for the last six months.

Did anyone help you early on?

My wife's grandfather showed me how to diversify my accounts.

Looking Ahead

Plans for your next $1 million?

I'm going to keep working and starting all over again with a new 401(k) and an HSA account. I doubt I will get there on the new job's 401(k), but if I keep working to 65, the Fidelity account alone, with an average return, will be $1.7 million.

Any advice for others trying to make their first $1 million?

Starting at a younger age gives you a head start. And the hardest dollars saved are the first few. Compound interest is your best friend.

Do you have an estate plan?

I have a living will, but we have not sat down and divided up every asset yet. That's for sure on the to-do list this year.

What do you wish you'd known …

When you first started saving? Invest your first amount of money to get your company match, and then after that invest as much as you can in an after-tax Roth account.

When you first started working with a financial professional? I have had three different ones. First guy was a family friend, and I trusted him with my investments 100%. Unfortunately, he passed away at a very young age.

Second one took over my accounts, and I couldn't get my money away from him fast enough.

The third one is who I have now with Fidelity.

When you first started investing? I started after talking to my wife's grandpa, and he started me on the right foot with diversification. I would bring my company investment selections to him to let him look at them. And it was usually mostly in an S&P fund, then a Nasdaq fund and usually some international funds, too.

Also, how a nice $10,000 investment can turn into a life-changing investment. Such as an Amazon or even Google. Let it ride and don't touch it.

I was fortunate to be riding the Nvidia wave, but I started with about $1,000 — which is now $27,000 or so. If that had been $10,000, oh my!

If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to MyFirstMillion@futurenet.com to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.

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There's a well-known study that Fidelity produced years ago that reviewed thousands of brokerage accounts and looked at the returns in each. The anecdotal conclusion: The best-performing accounts belonged to deceased account holders.

Right behind them were accounts belonging to people who had simply forgotten their passwords. I find that finding remarkable — and completely logical.

You can't panic if you're not paying attention

The thesis is simple. Investors who aren't actively managing their accounts don't panic-sell, don't try to time the market and don't interrupt their investments' ability to compound.

Those combined factors tend to produce better returns than what more anxious, hands-on investors experience. The least-engaged accounts are effectively emotionless — no second-guessing when markets spike, no panic when they drop.

This tracks with what plays out in financial advising every day. Some clients want to be deeply involved in their portfolios — joining every call, making market calls of their own, flagging sectors they want to chase, constantly tinkering.

Others barely discuss their investments at check-ins, admit they haven't looked at their accounts in months and place full trust in their plans.

Categorically, the highly engaged, informed, opinionated investors tend to fare worse than the ones who stay mostly hands-off.

Markets go up and down — reliably

Detaching from day-to-day market noise can be a genuinely effective strategy for many investors. It keeps emotion — and the fight-or-flight instincts that come with it — out of the decision-making process.

It's tempting to make market calls or share strong opinions about the economy. The markets, unfortunately, aren't listening. They don't care about anyone's fears, predictions or analysis. They largely just do what they've always done, and they do it fairly predictably.

What does "predictably" mean here? Markets have historically averaged roughly 10% annual returns and have been up in about three out of every four calendar years. That's simply the pattern.

Knowing that in advance, a down year shouldn't come as a shock. Nor should the fact that some pullback happens during nearly every calendar year, even the good ones — that's the norm, not the exception.

There's no getting around it: Investing in the markets means living with volatility. The real question is how an investor responds to it.

The realistic middle ground

Being completely detached from an investment plan isn't the right answer either. It makes sense to keep some pulse on a portfolio, but for most people, an arm's-length relationship works best.

That might mean placing trust in a professional or building enough personal discipline to avoid constant tinkering.

The goal isn't to ignore the markets entirely — it's to stop reacting to every headline or talking head on a financial news show.

What matters more is staying allocated in a way that's aligned with long-term goals. Changes should be occasional, not reactive, grounded in research and represent a strategic shift worth committing to for an extended period.

Above all, an investor should be comfortable enough with the plan to stick with it through every kind of market.

Why this matters more in retirement

This dynamic becomes more important once someone shifts from saving to spending down a portfolio. During accumulation years, a rough patch in the market can often be corrected by continuing to contribute and letting time do the work.

In retirement, that safety net disappears. A retiree reacting emotionally to a downturn — selling at the wrong moment, abandoning a withdrawal strategy, chasing yield into something unfamiliar — can do lasting damage to a plan that took decades to build.

The retirees who tend to do best are often the ones who set an allocation aligned with their income needs, then largely leave it alone.

No one has to be dead to earn great long-term returns, but acting a bit more like it — staying invested, resisting the urge to tinker and tuning out short-term noise — might be the closest thing to a reliable strategy that exists.

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• Are You Looking for Financial Advice or Just Validation?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Let's play a little "would you rather," retirement edition.

Would you rather retire somewhere warm or somewhere warm? Somewhere you can get a tee time, or somewhere you can also get a tee time? Somewhere popular among retirees or… you get the idea.

The playground version of "would you rather" pits opposites against each other: hot or cold, sweet or sour. But one of the biggest decisions of your life — where to retire — often comes down to two places that, on paper, both sound good. According to the moving-services platform HireAHelper, more than 2 million people aged 65 and older were essentially playing this game in 2025.

Take Naples, Florida, and Palm Springs, California. Both are sun-soaked, golf-mad, upscale havens that have been drawing retirees for decades.

Look closer, though — at the taxes, the risks, the culture, the whole character of each place — and the similarities fall away fast. Get past the sunshine, and one of them is probably a much better fit for your next chapter than the other. Here's how they stack up.

What to know about retiring in Naples, Florida

When you picture the Sunshine State, you probably think sandy beige and ocean blue. In Naples, the defining color might be fairway green. It's the self-titled "Golf Capital of the World," with the second-most golf holes per capita of any U.S. city.

So, head in any direction, and you’ll likely run into a golf course or a millionaire, since Naples also has one of the highest concentrations of them per capita in the country.

The price of this side of paradise

Cost of living matters at any age, but especially in retirement when living on a fixed income. It's usually dominated by one thing: housing. Naples is a case in point. Overall, the Economic Research Institute pegs the city's cost of living at about 29% above the national average, but everyday expenses — groceries, utilities, gas — actually run close to or just below the national norm.

The median home sale price is around $1.2 million, according to Redfin, with rents typically $2,000 to $2,500 a month. Set against a median household income near $153,000, it's a market that rewards those who arrive with equity already in hand.

What the taxman takes

Here's where Naples really shines. If you love the word 'no' and hate taxes, this is the place for you because Florida is about as tax-friendly as retirement gets. No state income tax. No tax on Social Security, pensions or 401(k)/IRA withdrawals. No estate or inheritance tax. For a retiree drawing down a pension and retirement accounts, that can mean keeping thousands of dollars a year that other states would claim.

Still, as nice as it is to worry less about taxes, it’s rarely the sole reason people choose Florida. "Clients do not move to Naples just to save on taxes," says Patrick Huey, a CFP® and founder of Victory Independent Planning in Naples. "They move because they want to enjoy the lifestyle, and then we test whether the numbers support that decision."

When you need a doctor

Retirement and healthcare go hand in hand, and Naples delivers. NCH (Naples Comprehensive Health) has been named one of Healthgrades' America's 50 Best Hospitals — the top 1% nationally — and is a Mayo Clinic Care Network member. It is also the region's only Joint Commission-accredited Comprehensive Stroke Center.

Sunshine… with an asterisk or two

Naples is known for warm, sunny days averaging around 83°F. But you can have too much of a good thing. The area logged 53 days with a heat index of 105°F or higher in 2023.

And there's a bigger asterisk. Hurricane season runs June through November, and Naples' low coastal elevation leaves it exposed to storm surge and flooding (Hurricane Ian hit in 2022; Helene and Milton followed in 2024). Redfin flags nearly all Naples properties as facing severe flood and wind risk over the next 30 years. That risk shows up on the bill. Home insurance averages around $9,660 a year for $300,000 in coverage, with flood insurance a separate policy on top.

Huey points to the ongoing cost of property and casualty coverage as the real planning issue in coastal Florida. "For many retirees, the question is no longer simply, 'Can I afford to buy here?' It is, 'Can I comfortably carry this house for the next 20 or 30 years when insurance, maintenance, and association costs are layered on top?'" he says.

His firm has even rewritten a client's retirement plan so they could move out of a floodplain and cut decades of insurance costs. As he puts it, insurance "is what increasingly determines whether the plan will help them sleep at night."

The Naples vibe check

AARP gives Naples an overall Livability Index score of 55 — solid, though dragged down by a low "opportunity" score (fitting for a place more about winding down than climbing up). With a median age of 67.3, this is unmistakably an older community, and a very safe one, with violent crime well below the national average.

It's also politically conservative and roughly 89% white. The lifestyle is upscale and traditional: white-sand Gulf beaches, luxury shopping along Fifth Avenue South and Third Street South, fine dining, and culture at Artis–Naples and The Baker Museum.

"People choose to retire here because they are buying a lifestyle as much as a tax profile," Huey says. "Warm winters, access to the water, strong golf and social communities, and the feeling of being in a place built around retirement all matter a great deal."

What to know about retiring in Palm Springs, Califonia

Tucked into the Sonoran Desert two hours east of Los Angeles, Palm Springs made its name on hot springs, stylish hotels, golf and spas. It’s a glamorous throwback to the era of Frank Sinatra, Marilyn Monroe and mid-century Hollywood. It's been a retiree magnet since the 1970s, drawing people who want an active, artful, unapologetically freer version of retirement.

The price of this side of paradise

Like Naples, Palm Springs isn't cheap. The Economic Research Institute puts its cost of living at about 29% above the national average too, essentially neck-and-neck with Naples. The difference is what it costs to get in the door. The median home sale price is around $590,000, per Redfin — roughly half of Naples' — with rents running roughly $1,480 to $1,970 a month. Median household income sits at about $73,119, notably lower than Naples, reflecting a broader mix of residents.

What the taxman takes

If Naples is the taxman's friend, Palm Springs is where he collects. California is among the least tax-friendly states for retirees with heavy pension and 401(k) income. Social Security is exempt, but pensions and IRA/401(k) withdrawals are taxed as ordinary income at rates from 1% up to 13.3% — the highest top rate in the nation — with most retirees landing near a 9.3% marginal rate.

The one bright spot for legacy-minded retirees: like Florida, California levies no estate or inheritance tax.

"The biggest drawback is California's income tax,” says Joon Um, a CFP® and advisor at Secure Tax & Accounting in Beverly Hills. But he points out that "most retirees are nowhere near the 13.3% top rate" (for state tax).

Um says retirees can manage the bite through "Roth conversions, managing withdrawals before RMDs, and using a mix of taxable, IRA, and Roth accounts to better control taxable income."

Even so, he adds, the tax hit often isn't the deciding factor: "Many retirees accept the higher taxes for California's weather, lifestyle, family and healthcare. Taxes matter, but lifestyle often matters just as much."

When you need a doctor

If the hot springs can't cure what ails you, the medical care can. Desert Regional Medical Center sits right in the city, a Level II trauma center, graded "B" for safety by Leapfrog. And a short drive away in Rancho Mirage, Eisenhower Health earned Leapfrog's top "A" grade for 10 straight cycles and ranks as the #1 hospital in the Riverside County–San Bernardino metro by U.S. News.

Sunshine … with an asterisk or three

This is the desert, so sunshine is the whole point. The area boasts about 300 days of it a year and less than five inches of rain. Winters are glorious, with highs in the 60s and 70s. Summers are the catch, with triple digits for months on end, frequently topping 108°F.

The other asterisks are geological and environmental. The San Andreas Fault runs through the region (earthquake coverage is a separate policy through the California Earthquake Authority), and the area faces extreme drought plus some wildfire and flash-flood risk. The state's broader insurance market is under strain, but Palm Springs proper is less exposed than California's fire country.

The Palm Springs vibe check

AARP scores Palm Springs a 49 on its Livability Index. The environment is its weak spot, a common knock on Southern California, thanks to air pollution. With a median age of about 57, it skews a touch younger than Naples, and the vibe follows.

This is active, sociable retirement. Palm Springs is also one of the most prominent LGBTQ communities in America, with among the highest concentrations of same-sex couples of any U.S. city, and that openness shapes its whole character. It's a mid-century-modern design mecca (Modernism Week is a marquee event), with a lively arts scene (the Palm Springs Art Museum, galleries, a film festival), golf and serious outdoor recreation, from hiking the Indian Canyons to riding the Aerial Tramway up Mt. San Jacinto.

While crime is slightly higher here than in Naples, it’s generally property crime, the bane of resort towns.

So, would you rather?

The choice isn't really about weather or golf since both cities have those in spades. Naples rewards you at tax time and with a genteel, traditional feel, if you can clear the higher cost of buying a home and stomach hurricane season. Palm Springs asks more of you at tax time and costs less to enter, trading hurricanes for heat and earthquakes while giving you a livelier, more diverse, more design-forward scene.

The right answer comes down to your priorities, your budget, and perhaps your politics just as much as your postcard. But if choosing between two sun-drenched havens is your biggest retirement dilemma, that's a pretty good problem to have.

Read More on Where to Retire

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You may be ready to call it quits and start your next chapter in retirement, but is your partner ready? They may not be as eager as you to throw in the towel on their career — or, if they are already retired, they might not be ready for all that unplanned 'quality time' together.

After all, gray divorces (age 50 and over) are on the rise, accounting for close to 40% of all divorces in the U.S., and one reason is the sudden shock of all that unplanned time together.

While you may be worried about yourself — getting work done around the house, playing rounds of golf with your friends, or finally going on that bucket list trip — your partner's feelings matter too.

"It should always start with 'am I ready,' and the follow-up question should be 'is my spouse ready,'" says Kyle Moore, founder and financial planner at Quarry Hill Advisors. The goal is to make both feelings fit into the retirement picture.

To keep harmony at home, ask your partner these three questions before picking a retirement date.

1. Are you ready to make all our financial decisions as one?

Assuming you can afford to retire and live on one income (or your retirement savings plus Social Security and any pension income you have), a big financial change when one half of a couple retires is the commingling of finances and money decisions. If the other spouse or partner is still working, it's one 401(k) saving for two, a shared Social Security claiming strategy, and a single-earner household budget.

That's why the first question to ask your partner is: Are you ready to make all our financial decisions as one? "If you're used to looking at things separately, now you have to look at them as one," says Moore. "It's a lot to coordinate."

2. Are you ready for me to be around the house all the time?

"Familiarity breeds contempt" couldn't be truer when one partner is suddenly around all the time thanks to retirement. The road is paved with tales of marriages that fell apart once the working spouse retired and had nothing but free time.

That's not the case for Ellen Kennedy and her husband, Kent Marcoux. The married couple of 26 years have been living as wife and self-appointed "house husband" for about three years, ever since Kent retired.

Ellen is still working full-time as an editor at Kiplinger, while Kent busies himself kayaking — he even got accredited as a whitewater kayak instructor — volunteering to teach veterans with Team River Runner. He also reignited his passion for music, playing in several bands and logging time at a local recording studio. He does the food shopping, laundry, taxes and pet care, freeing up Ellen to focus on work. The arrangement works for them because Kent had a retirement plan separate from Ellen. While he's home more often, it doesn't feel suffocating.

"From my perspective, it took him about two years to transition from work to this new 'house husband' life structure," says Ellen. "He surprises me with cappuccinos in the morning and often asks what my 'HH' can do for me. It's a sweet new phase to our relationship."

To emulate this happily married couple, the second question you should ask your partner is: "Are you ready for me to be around the house all the time?" Hopefully they will say yes! If not, you have some talking to do.

3. What does an average Tuesday in retirement look like?

When most people think about retiring, they romanticize those big bucket-list items — the trip to the Sahara Desert, the move to Florida, or finally buying the RV to traverse across the country. But they don't think about everyday life, how much time they will spend with their spouse, what they will do together and apart. Ignoring that could cause problems, which is why the third question is: What does an average Tuesday in retirement look like?

"One of the things people don't think about is what happens on a random Tuesday. What are my day-to-day expectations of each other?" says Moore. "Having an open conversation about that would avoid conflict."

Keep the dialogue going

Picking a retirement date isn't a one-and-done decision, especially when someone else is involved. If your partner isn't ready for you to call it quits, continue to have open and honest conversations about why.

If it's financial, devise a strategy to shore up extra cash or commit to work an extra few months or a year. If it's about boredom and personal space, make a plan for how you'll spend your time together and apart. Remember, at the end of the day, you're not just planning your retirement date; you're designing a next chapter for both of you.

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Using an independent ATM can cost you a few dollars in fees. But if you paid a surcharge to withdraw cash from a nonbank ATM, you could be eligible for money from a $167.5 million Visa and Mastercard settlement.

The class-action lawsuit alleged that Visa and Mastercard violated antitrust laws by preventing independent ATM operators from charging lower fees when transactions could be processed over less expensive competing networks. The plaintiffs argued that those rules caused consumers to pay higher ATM fees than they otherwise would have. Visa and Mastercard deny wrongdoing but agreed to the settlement.

Consumers who paid an unreimbursed surcharge at an independent ATM between October 24, 2007, and August 14, 2026, may qualify for a payment. Claims are now open, and eligible consumers have until February 10, 2027, to submit a claim.

Who qualifies for the Visa and Mastercard ATM settlement?

According to the settlement website, customers may qualify if they paid a surcharge to withdraw cash from a deposit account at an independent ATM between October 24, 2007, and August 14, 2026. The ATM must have been located in the U.S. or its territories, and the customer's bank must not have fully reimbursed the fee.

Independent ATMs are machines that aren't owned by a bank or other financial institution. You might find them at convenience stores, gas stations, grocery stores, bars and other businesses. To qualify, customers must have made the withdrawal using an ATM or PIN-debit card.

Credit card cash advances and prepaid-card transactions aren't included in the settlement.

How much could you receive?

The settlement fund totals $167.5 million, but individual payment amounts will vary. How much you receive will depend on factors including the number of valid claims and qualifying ATM transactions.

The fund will also be used to pay attorneys' fees and expenses, settlement administration costs, taxes and service awards to class representatives. The remaining money will be distributed among eligible claimants.

How to file a claim

You can submit a claim online through the official settlement website. The form asks for basic contact information, including your mailing address, phone number and email address. You'll also be asked to estimate the number of qualifying ATM transactions you made during the eligibility period.

You don't need to provide documentation when you submit your claim. However, the claims administrator may later ask for bank statements or other documents to support it. Claims are submitted under penalty of perjury, so your information must be accurate to the best of your knowledge.

Claims must be submitted by February 10, 2027.

Why Visa and Mastercard agreed to the settlement

Visa and Mastercard faced allegations that their network rules violated antitrust laws by preventing independent ATM operators from charging lower fees when transactions could be processed through less expensive competing networks.

Plaintiffs argued that those restrictions caused consumers to pay higher ATM fees than they otherwise would have.

Visa and Mastercard deny wrongdoing but agreed to pay $167.5 million to settle the claims.

Key dates to know

As the class-action settlement moves forward, keep these key dates in mind:

• December 11, 2026: This is the deadline to object to or exclude yourself from the settlement. Objections must be postmarked by this date. If you want to retain your right to sue Visa or Mastercard separately over the claims covered by this case, your request to be excluded must be received by December 11. If you exclude yourself, you won't be eligible for a settlement payment.
• February 10, 2027: Claims must be submitted by this date to be eligible for a payment. If you're mailing your claim, make sure it arrives by the deadline.
• February 17, 2027: The final approval hearing is scheduled for 4 p.m. ET. The court will consider whether to approve the settlement. If the settlement is approved and appeals are filed, payments can't be distributed until those appeals are resolved.

When will ATM settlement payments be sent?

According to the official settlement website, the claims administrator expects to send payments within six months of final approval if no appeals are filed. If there are appeals, payments will be delayed until they are resolved.

If you think you qualify for a payment, submit your claim before the February 10, 2027, deadline. After that, keep an eye on the official settlement website for updates on final approval and when payments will be distributed.

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If you're already contributing enough to capture your full 401(k) match, you've got the basics covered. The bigger opportunities — and the ones I see even diligent savers miss — are found a level up from there.

After more than a decade of helping people build their retirement plans as a CFP® professional, I've found that most people stop optimizing right after the match.

Other savings accounts and strategies that could work in their favor go unused for years, not because they're complicated, but because nobody ever walked through them step by step.

Here are five that can make a meaningful difference for people who are already saving well and want to do more.

1. Take advantage of an HSA's triple tax benefits

If you're eligible to contribute to a health savings account (HSA), it may be the most underused account you have.

HSAs offer a rare triple tax advantage: Contributions can be made pretax or may be deductible, earnings grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

For 2026, you can contribute up to $4,400 for self-only coverage or $8,750 for family coverage, plus another $1,000 if you're 55 or older.

Most people treat their HSA like a checking account for copays and prescriptions. You don't have to. You can pay medical costs out of pocket now, let the HSA grow untouched for decades and reimburse yourself years later, as long as the expenses were incurred after you established the HSA, weren't previously reimbursed or deducted and you kept adequate records.

I've worked with people in their 50s who'd been quietly saving old medical receipts for this exact reason, without ever calling it a strategy. Used that way, an HSA functions like one of the most tax-advantaged retirement accounts you have access to, not just a place to park money for copays.

2. Choose pretax or Roth in your 401(k) on purpose

Most people never actively decide between pretax and Roth contributions. Their 401(k) defaults to whatever the plan set up on day one, and they never revisit it. I've reviewed plans for people who hadn't looked at this choice in over a decade, even though their income, and the right answer for them, had changed completely in that time.

The difference matters. Pretax contributions generally reduce your taxable income now, while withdrawals are generally taxed as ordinary income later. Meanwhile, Roth contributions don't provide a current deduction, but qualified withdrawals are tax-free.

A useful starting point is to compare your marginal tax rate today with the rate you reasonably expect when the money is withdrawn. Keep in mind future required minimum distributions (RMDs), tax-law uncertainty, and the value of having both taxable and tax-free income sources in retirement.

For 2026, the 401(k) employee deferral limit is $24,500, with an additional $8,000 available if you're 50 or older.

One change worth flagging for this year: If your 2025 FICA wages from the employer sponsoring the plan exceeded $150,000, your 2026 catch-up contributions generally must be made as Roth contributions. It's a rule that's easy to miss.

There's no universal right answer here, only the one that fits your specific tax situation. Modeling your expected income and tax bracket in retirement with a retirement planning tool can help you make that call instead of guessing. (Note: I'm head of support and a financial planning educator at Boldin.) Make it a real decision, not a default.

3. Look into a mega backdoor Roth if you still have room to save

This one is for higher earners who've maxed out the accounts above and still have money left over to put away.

If your 401(k) plan allows after-tax contributions, separate from Roth contributions, you may be able to save well beyond the standard deferral limit. For 2026, the combined 401(k) employee-and-employer contribution limit is $72,000, or 100% of your compensation if less.

Catch-up contributions generally sit on top of that limit, potentially bringing the total to $80,000 if you're 50 or older, or $83,250 if you qualify for the higher age-60-to-63 "super" catch-up.

Once you've maxed your regular deferral and accounted for any employer contributions, the remaining room can sometimes be filled with after-tax dollars, then converted to Roth, either through an in-plan conversion or an in-service rollover to a Roth IRA.

This only works if your plan specifically permits both after-tax contributions and one of those conversion paths, so call your HR department or plan administrator before assuming it's available. Not every plan offers it, but for the people it fits, it's one of the more overlooked ways to build tax-free savings.

4. Stack a backdoor Roth IRA on top of your mega backdoor Roth

If you've just read about the mega backdoor Roth and assumed you've now used up your Roth options for the year, you haven't.

A backdoor Roth IRA lets high earners get money into a Roth IRA even after they've been phased out of contributing directly. You contribute to a traditional IRA on a non-deductible basis, then convert it to Roth shortly after. For 2026, the IRA contribution limit is $7,500, plus $1,100 more if you're 50 or older.

Here's the part I get asked about constantly: Your IRA contribution limit is separate from the limits that apply to your workplace plan. If you're otherwise eligible for each strategy, you can fund a backdoor Roth IRA and execute a mega backdoor Roth in the same year.

The one thing that can complicate a backdoor Roth IRA is the IRS's pro-rata rule, which requires you to consider all of your traditional, SEP and SIMPLE IRA balances together when calculating the tax on a conversion.

The calculation looks at the year-end value of all of those IRAs, not just the account holding your nondeductible contribution.

A mega backdoor Roth, whether converted inside your workplace plan or rolled directly to a Roth IRA, generally doesn't count toward those IRA balances.

If you don't have pretax traditional, SEP or SIMPLE IRA money sitting around, the backdoor Roth IRA stays clean from a tax standpoint. Either strategy can have tax consequences, so confirm the details with your CPA before you move any money.

5. Don't underestimate a plain taxable brokerage account

After three accounts built around tax breaks and rules, a taxable brokerage account can feel almost boring by comparison. But it doesn't get nearly enough credit.

There's no statutory contribution limit, no income cap and no early withdrawal penalty. You can invest as much as you want and sell investments or withdraw cash whenever you want, although selling appreciated investments can create a taxable gain.

That flexibility is rare among the accounts on this list, especially if you're hoping to retire before 59½ and need a bridge to cover expenses before your retirement accounts are penalty-free.

The tax treatment isn't as generous as a Roth or an HSA, but it's still better than most people assume. Long-term capital gains and qualified dividends get preferential rates, not your ordinary income rate.

For 2026, the 0% federal long-term capital gains bracket for married couples filing jointly extends through $98,900 of taxable income. Ordinary taxable income uses that bracket first, so only gains that fall within the remaining space qualify for the 0% rate.

There's also tax-loss harvesting: Selling an investment at a loss to offset capital gains and potentially up to $3,000 of ordinary income, subject to rules such as the wash-sale rule, something you simply can't do inside a 401(k) or IRA.

I've worked with many who treat their brokerage account as an afterthought, something they'll "get to eventually" once the tax-advantaged accounts are maxed. Fund it on purpose instead, particularly if flexibility and access before retirement age matter to your plan.

These add up faster than you'd think

Some of these moves require additional savings, while others change the tax treatment or destination of money you're already saving. The goal is to direct each additional dollar toward the account that best supports your plan.

That distinction compounds. A few percentage points redirected toward a Roth or an HSA in your 50s can mean a different tax bill in your 70s and 80s.

I've watched people run these strategies side by side and see for themselves how much of a difference the right combination makes over 20 or 30 years.

You don't need to implement all five at once. Start by identifying which strategies are available to you, then prioritize the one that best fits your tax situation, savings capacity and need for flexibility.

Before you know it, you will be on your way to a confident retirement knowing that you have optimized your savings.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

From meal planning and research to fact-checking, copy editing and document summarization, artificial intelligence (AI) is rapidly altering the contours of daily life, becoming as indispensable as a basic internet connection.

But AI is not a magic wand. It's a tool that, when used responsibly, can improve efficiency and fill in specific knowledge gaps.

Within financial services, AI is becoming a bigger factor, both at the adviser level and among consumers, who have more access than ever to educational tools to support planning and investing.

In some ways, this access can be beneficial to consumers and participants, giving them unprecedented access to resources that help them be more involved and invested in their financial planning.

1. Everyday efficiency

I'm probably not the only person who uses ChatGPT to help with shopping and meal planning. With a single prompt, I have a ready-made grocery list and budget-friendly dinner plan built around my specific tastes and dietary guidelines.

Could I achieve the same thing by flipping through cookbooks or doing a Google search? Probably. But it would take a lot longer to sift through all the recipes that don't meet my criteria.

In finance, AI can serve a similar purpose, helping potential investors to get the lay of the land. Someone can use it to compare two investment options or learn about complementary opportunities.

It's a low-stakes way to familiarize yourself with the dizzying array of investment options.

2. Learning and definitions

AI is a great learning tool. At a basic level, you can use Claude or ChatGPT to provide definitions for common terminology: What is a stock? What is a bond?

Of course, Google does the same thing, but AI does it more efficiently and effectively.

3. Fact-checking professionals

Though AI can't replace a professional, it is effective for fact-checking, much in the way that patients can consult with another doctor to get a second opinion.

Humans are fallible (though they're less prone to errors than their robotic cohorts), so it's always healthy to do some quick fact-checking

However, when it comes to your finances, AI is not, and can't be, a substitute for professional expertise. It can't replace the empathy and connection that another human can provide.

4. Bad prompts produce errors

Ever heard of "garbage in, garbage out"? If you give AI a confusing prompt, you're likely to get a muddled answer.

I experienced this firsthand during planning for a group bike trip. As an avid cyclist, I turned to my trusty AI assistant to help plan a multiday bike route for me and some of my colleagues.

Apparently, something in my prompt was confusing, and on the last day, instead of setting out on a 30-mile ride, we discovered that it was, in fact, an 80-mile route.

I learned a hard lesson: Clarity is everything, and even small errors can lead to mistakes that you might not catch until it's too late.

5. Easily confused

AI is not great at juggling multiple thoughts at once. Specifically, it can conflate similar-sounding but different concepts such as a separately managed account vs an adviser-managed account, or a retirement-plan brokerage window vs a retail-brokerage account.

While these distinctions might seem small to the layperson, they're important because they involve different fee structures, governance and access rules. AI can slip up when multiple concepts converge, even if it gets them right individually.

6. Bias and data limitations

Studies have shown that large language models (LLMs) have consistently demonstrated bias across categories such as gender, race and age. While this is a discrimination problem, it also contributes to functional errors as diversity of thought leads to better, more accurate outputs.

Even in a perfect world, Claude or ChatGPT could never replace your doctor, lawyer or financial adviser. People want to look across the table at someone they trust when discussing critical issues such as their health and finances.

They also want accountability. A couple of years ago, I started working with a running coach. If you're not an avid runner, the idea of a coach might seem ridiculous. Running is just putting one foot in front of the other, right?

Well, in addition to helping with training, sleep and diet, my coach keeps me accountable. I pay for a coach not because I don't know how to run, but because someone showing up to my house in the morning keeps me accountable. I won't skip a run if I know Jeremy is going to be there. AI is not going to solve that issue.

Likewise, the value of the adviser-client relationship is accountability, trust and follow-through. As an investor, AI can be a useful tool to help you become more efficient and better informed, but it will never be a substitute for your financial adviser. Supplement, don't supplant.

You're likely not the only one using AI. Your financial adviser might use it, too, which is OK, even smart, but you're entitled to know how they're using it and make that part of the decision-making process.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Stocks surged on Friday after a cooler-than-expected September jobs report eased pressure on the Federal Open Market Committee (FOMC) to raise interest rates at its meeting later this month. Oil prices retreated amid a global effort to support crude supply. But bond yields pushed up again following an initial pullback on the employment news, and the main equity indexes slipped from intraday highs.

The 2-year Treasury yield fell from 4.787% on Thursday to 4.693% right after the release of the nonfarm payrolls report, but it was already rising before the opening bell and ended the session up 5.0 basis points at 4.837%.

The Bureau of Labor Statistics (BLS) said the U.S. added 29,000 new jobs last month, well below a consensus forecast of 93,000, and the unemployment rate unexpectedly ticked up to 4.2% from 4.1%.

The 10-year Treasury yield (+4.5 bps, 5.279%) and the 30-year Treasury yield (+2.5 bps, 5.628%) followed similar trajectories.

"Payrolls growth disappointed in September," Fifth Third Commercial Bank Chief Economist Bill Adams writes. "With downward revisions to July and August, the acceleration of job growth that seemed visible in the August jobs report has been revised away."

Still, the economist observes, the mediocre September jobs report isn’t bad enough to shift the Fed's focus from inflation.

"Their next decision in late October is live," according to Adams, "and will probably be swayed by the September CPI and PPI reports, geopolitical developments, and prices at the pump between now and then."

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According to CME FedWatch, price action in the federal funds futures market indicates a 22.7% probability the Fed hikes rate by 25 basis points at the October Fed meeting, down from 64.2% a week ago.

Meanwhile, the front-month West Texas Intermediate crude oil futures contract was down 1.5% at $91.45 per barrel.

In an effort to mitigate disruptions to the global supply chain, the G7 and the International Energy Agency will coordinate the release of up to 100 million barrels of emergency crude oil and diesel fuel over the next four months.

HPE gets an AI bounce

By the closing bell, the tech-heavy Nasdaq Composite was holding a 1.2% gain at 27,190, the broad-based S&P 500 had risen 0.7% to 7,722, and the blue-chip Dow Jones Industrial Average was higher by 0.5% at 51,176.

Artificial intelligence (AI) revolutionary Nvidia (NVDA) hit a new all-time high, and its market cap climbed closer to $6 trillion, following the $150 billion stock buyback increase management announced on Monday.

It's the biggest stock buyback ever, and Nvidia plans to buy a total of $235 billion of its own shares through fiscal 2028.

Electric vehicle maker Tesla (TSLA) was up 4.5% on management's report that third-quarter deliveries topped Wall Street's forecast, though rival Rivian (RIVN) was down 3.1% because it didn't beat its delivery forecast by enough to satisfy analysts.

Old-school Silicon Valley legacy outfit Hewlett-Packard Enterprise (HPE, +7.4%) was one of the best-performing S&P 500 stocks and also closed at an all-time high on Friday.

Management of the tech stock forecast solid revenue growth for its networking segment because of demand for AI infrastructure. The segment includes "data-center networking, routing, and campus & branch" and serves enterprise and service provider customers such as hyperscalers, as well as "neocloud" platforms that support AI computers.

Has Nike lost its swoosh?

Nike (NKE) was the worst-performing Dow Jones stock on Friday following management's report on fiscal 2027 first-quarter results after the closing bell on Thursday.

Revenue was slightly below Wall Street's forecast, and earnings were in line with the consensus estimate. But management's forecast for full-year earnings of $1.15 to $1.35 per share fell well shy of the $1.67 analysts wanted to see.

And guidance for a high-single-digit decline in percentage terms for revenue was a lot bigger than Wall Street expected. As UBS analyst Jay Sole writes in a post-report note, "The pivotal Nike question remains 'Is all the 'bad news’ now priced in?'"

Sole cites NKE's steep pullback, but the analyst says he still doesn't see a good entry point. One potential upside catalyst is Nike's analyst day in November and whether management can convince Wall Street its downward earnings revision cycle has ended.

"The main downside risk," he adds, "is the rebound takes much longer than the market anticipates and therefore the downward earnings revision cycle may not be over."

Sole reiterated his Neutral (Hold) rating, but he cut his 12-month target price for the iconic consumer discretionary stock to $34 from $42.

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Imagine this: You receive a check with the proceeds of an inheritance. Whether you were expecting it or not, the question now is: What do you do with it?

Here's where you might run into some problems. If the amount is larger than $10,000, most banks won't accept a mobile deposit. A Kiplinger colleague recently experienced this after losing a loved one and encountered unexpected challenges.

The check arrived, but they couldn't deposit it electronically. Another issue? They didn't live close to any of their bank's brick-and-mortar branches. If you find yourself in a similar situation, here's what to do.

Ask your bank for solutions

My colleague reached out to their bank, which suggested overnighting the check. If you go this route, send the check via certified mail, then you can track the package and have proof that the bank received it.

But mailing a large check can be uncomfortable for many, including my colleague. If you don't want to mail your check, contact your bank directly to explain your situation.

Chances are, they'll find ways to work with you. Banks usually set deposit limits based on your average daily balance and account age for both savings and investing accounts such as IRAs. Yet, they'll give you more clout when depositing a larger amount.

Other ways to deposit your beneficiary check

Some banks partner with other institutions. This is more prevalent with credit unions. If you don't have a local physical branch, a partner institution might, allowing you to conduct in-person transactions seamlessly.

Another option is to contact the will's executor. Ask them to cancel the check and wire your funds electronically. This can bypass any deposit limits the bank imposes, giving you quicker access to your funds.

My colleague reached out to their brokerage firm for help. The firm eventually decided to send someone to their house to pick up the check for deposit. This is likely a last resort, as many banks don't have the resources or won't offer that service.

Once you deposit your inheritance check, another question emerges: What do you do with the funds?

Buy yourself some time with this step

Proper planning goes a long way to ensure the gift you receive helps you achieve your goals. I recommend opening a high-yield savings account, a money market account or a short-term CD until you decide if there's anything further or more specific you want to do with the funds.

Look for online banks since they offer higher APYs, lower fees and many accept mobile deposits. On the high-yield savings end, here's a smart recommendation:

Money market accounts are great if you want to grow your cash with the purchasing power of a checking account. Keep in mind that some banks set transaction limits, so this account works best for someone who wants guaranteed returns while making minimal transactions.

Meanwhile, a CD locks in a decent rate of return without market volatility, thanks to its fixed interest rate. I recommend a short-term option of three to six months or a jumbo CD (if the deposit is $50,000 or more) to earn a sizable return while you figure out next steps.

Use this Bankrate tool to find and compare options fast:

When choosing an account, look for FDIC insurance. This protects your deposit up to $250,000 per account holder, giving you peace of mind.

Once you choose a savings account, do this next.

Set goals to create lasting wealth

Your loved one left you a valuable resource. It's up to you to determine what to do with it. If you haven't been in a position in which you've had this much money before, my first tip is to find a reputable financial adviser or personal banker.

When searching for a financial adviser, look for the following qualities:

• Fiduciary designation. This ensures they act in your best interest rather than prioritizing commissions or sales targets.
• Reputation. Read client feedback to gauge trustworthiness. Common complaints across reviews can point to recurring issues you might experience too.
• Personal. Find an adviser who asks open-ended questions about your financial goals and values rather than boxing you into a one-size-fits-all approach.
• Services. Can they cover all your financial needs, such as retirement planning, tax strategies, asset allocation and estate planning?
• Proactivity. Goals evolve. Look for an adviser who commits to meeting regularly, so they can update plans as priorities change.

One of the best things about working with a reputable financial adviser is that they can take some of the planning off your plate. Once they understand your goals and values, they can tailor a plan to pay off debt, save/invest, plan your estate and address any other financial concerns you might have.

If you don't have an adviser yet, you can use this Bankrate tool to find a reputable one quickly:

Ultimately, receiving an inheritance check can be a challenging process at a time when you're experiencing the fog of grief. However, by following these steps, you can find the right deposit solutions, give yourself time to figure things out and develop a plan that helps you build wealth now and well into the future, as the gift was intended.

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I recently wrote about how today's clients expect something different from their advisers. They're looking for advice that helps them make better decisions, simplify complexity and regain time.

Investment management still matters, but increasingly, it's just one piece of the value equation.

Since then, I've had several conversations with advisers who agree with that premise but are wrestling with a different question: If clients expect more, how do you consistently deliver more?

What I've found is that many advisers already are. The challenge is that neither their teams nor their clients can clearly articulate what that "more" actually means.

Ask advisers to describe the value they bring, and most can do it without hesitation. Ask them to show where it's documented, how it's delivered consistently and how clients know what services are available to them, and the answer often becomes less clear.

That's because many firms didn't intentionally build their service model. They accumulated one.

Over the years, one client needed help with an estate issue. Another needed coordination with a CPA. A business owner required guidance on succession planning. The adviser stepped in, solved the problem and moved on. Then it happened again. And again.

Eventually, the adviser delivers far more value than investment management alone, but much of that value lies in experience rather than in a clearly defined model.

The hidden risk of doing more

Most firms don't have a capability problem. They have a visibility problem. When advisers don't define what they do, clients often receive whatever level of service is delivered rather than the level they need.

A client with a straightforward retirement plan and a client preparing for a business sale rarely have the same planning needs.

Yet many firms still approach both relationships through a similar service structure — not because they're unwilling to provide more, but because they've never established a framework that distinguishes one experience from another. Over time, that creates risk.

The highest-value clients often have the most complex needs. If they don't see evidence that those needs are being addressed proactively, they'll eventually look elsewhere. And when they do, they're rarely leaving because another adviser has radically different capabilities. They're leaving because another adviser made those capabilities visible.

Experience Alpha requires structure

One of the central ideas behind Experience Alpha, a strategic initiative launched at AE Wealth Management, where I am president, is that client experience doesn't happen by accident. It has to be designed. That design starts with understanding the services you're providing and determining which clients should receive them.

Some firms organize those services into tiers. Others categorize them by client complexity, planning needs or relationship type. The specific approach matters less than the discipline of defining it.

At our firm, we often think about services as evolving from foundational planning and investment guidance to broader planning coordination, advanced wealth strategies and concierge-style support for significant life events.

The labels aren't important. What matters is creating clarity for your team, for your clients and for yourself.

What advisers usually discover

When advisers map their client relationships against a defined service structure, two things almost always happen.

First, they realize they're already delivering far more value than they give themselves credit for. The work is happening every day. The problem is that clients often experience those services as isolated interactions rather than as part of a broader advisory relationship.

Second, advisers identify clients who should receive a more advanced level of support than they currently receive. Those discoveries are often uncomfortable. They also tend to be incredibly valuable because they reveal opportunities to strengthen client relationships before clients start questioning them.

The communication advantage

One of the simplest tests I encourage advisers to try is this: If a client referred you to a friend tomorrow, what would they say?

If the answer is simply, "My adviser is great," you've earned a compliment. If the answer is, "My adviser coordinated my tax strategy, helped structure my estate plan and guided us through a major liquidity event," you've created a story.

Stories generate referrals. Stories reinforce value. Stories help clients understand why they stay.

When clients clearly understand what you do, they're more likely to engage more deeply, consolidate assets and view the relationship through a broader lens than quarterly performance reports alone.

Make the invisible visible

The reality is that most advisers are already doing more than their clients realize. But value that remains invisible is difficult for clients to appreciate. It's difficult to explain. And it's difficult to differentiate.

As client expectations continue to evolve, the advisers who thrive won't necessarily be the ones who do the most. They'll be the ones who make their value the easiest to understand.

Because in today's environment, delivering a great experience is only half the challenge. Making sure clients can see it may be the other half.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For savers, the sharp spike in interest rates has a silver lining: higher annuity payouts and larger risk-free guaranteed income streams.

When interest rates rise, annuity yields typically follow; insurers earn more on bonds they buy with customer premiums, so they can pass along higher rates to new annuity buyers.

An annuity is a contract between you and an insurance company that converts savings into guaranteed income — for a set period or for life.

With borrowing costs rising from the Federal Reserve’s benchmark short-term rate to the 10-year Treasury note, annuities are back in the spotlight. Preretirees and retirees seeking a guaranteed income stream beyond Social Security can take advantage of the rate spike and lock in higher annuity rates.

With equity markets near record highs and interest rates surging, U.S. annuity sales rose 2.2% in the second quarter to $121.2 billion, according to LIMRA. Sales in the first six months of 2026 totaled $228.7 billion, a new first-half record.

Money parked in annuities reduces market exposure and provides protection against a downturn in stocks.

There are many types of annuities. But we'll focus on two common types that offer fixed payouts or lifetime income and are simple to understand. Examples include:

Multiyear guaranteed annuity (MYGA). This is a "fixed annuity" that locks in a guaranteed interest rate for a set term — typically, three to 10 years — with tax-deferred growth and no market risk. As with a certificate of deposit (CD), this annuity is used for accumulation. You give the insurer a lump sum for, say, five years, earn a fixed annual rate of return and get your principal back at the end of the contract.

For example, if you put $100,000 into a five-year MYGA yielding 6.55%, you'll earn $6,550 each year and get your principal back five years later at the end of the contract.

Single premium immediate annuity (SPIA). Often called immediate annuities, this type of annuity is similar to an old-fashioned pension, as it turns a lump sum into guaranteed income for life. You give an insurer a lump sum today, and the company writes you a monthly check for the rest of your life or a fixed number of years starting immediately.

With SPIAs, be aware that once you turn over your money to an insurer in a "life only" SPIA, and they start providing a guaranteed income stream, the money you forked over is gone. For this reason, many buyers purchase SPIAs with a "period certain" or cash refund rider so their heirs get the remaining balance if they die early.

SPIA math is simple. To determine the monthly income an annuity will pay out, multiply the premium (or lump-sum payment) by the annual payout rate, then divide by 12. Using a $100,000 premium and a 5% payout rate, the monthly income would be $416.67. Monthly income = $100,000 x 5% / 12 = $416.67. At a 5.25% payout rate, the monthly income climbs to $437.50.

Why are annuities attractive now?

What makes these annuities attractive currently is the high income they generate because of the spike in rates.

As of October 1, 2026, the best fixed annuity rate for a three-year annuity is 6.10%, five-year annuities pay 6.55%, seven-year annuities earn 6.95%, and a 10-year annuity pays 6.35%, according to My Annuity Store.

With Wall Street penciling in another full percentage point of Federal Reserve rate hikes through the end of 2027, potentially taking the Fed’s overnight bank lending rate from 4% to 5%, investors must weigh whether now is the time to lock in higher rates.

From an income opportunity standpoint, those yields are attractive, and investors or retirees should take advantage of them, says David Lau, founder and CEO of DPL Financial Partners, an online platform that offers commission-free annuities.

"It’s a terrific time to lock in these rates," says Lau. A perk of owning a MYGA or fixed annuity is that most insurers let you withdraw up to 10% of your account value per year without a surrender charge, according to AnnuityExpert.com.

Despite forecasts of higher rates in the months and year ahead, it's difficult to predict the direction of rates. Timing interest rates is as difficult as accurately timing when to jump in and out of the stock market. Waiting for a better entry point could always net you an even higher rate on a new annuity. But it's not a guarantee.

"You can't get paralyzed by hoping or wondering whether you can get maybe a little better rate if you wait," says Lau.

Ed Massaro, CEO of Knighthead Life, an insurer that sells annuities, says savers shouldn't place too much emphasis on where rates are headed next when weighing whether to purchase an annuity.

"The right question isn't whether rates are at a peak; it's whether today's rates get you enough income to meet your retirement goals," says Massaro.

Options for annuity buyers as rates rise

Since nobody knows where rates will go, here are four options for an income-oriented preretiree, retiree or conservative saver to consider.

1. Lock in today’s rates. With the 10-year Treasury hovering at around a 19-year high of 5.25%, locking in today's annuity rates that range from 6% to nearly 7% makes sense for a saver who wants a guaranteed return today rather than betting on a higher rate in the future.

The sweet spot for fixed-income annuities or MYGAs is a five-year annuity with yields as high as 6.55% and a seven-year product that offers a top yield of 6.95%. "As long as you have the liquidity (e.g., available cash to meet your spending needs), lock in those longer-duration annuities," says Lau. Since the highest current yield on a 10-year annuity is 6.25%, Lau sees no reason to lock money up in an annuity for a decade.

2. Build an annuity ladder. One way to lock in today's elevated rates while minimizing interest rate risk is to build an annuity ladder that invests in a number of annuities spread across different maturity dates, says Steve Azoury, owner of Azoury Financial.

This strategy is similar to building a CD ladder, but it benefits from tax-deferred growth. Given that annuity rates offered by insurers currently top out at around seven years, you could spread money equally among annuities that offer fixed rates for one, two, three, four, five, six and seven years. If rates keep climbing, you can roll over an expiring annuity into a higher-yielding one, says Azoury. On the flip side, if rates dip for some reason, you'll have locked in today's higher rates.

Before committing any money to an annuity, Azoury says you should review your retirement goals and objectives and decide how big a weighting of annuities you want in your retirement portfolio.

3. Wait and see. If you're willing to bet on rates moving higher, you can wait to buy an annuity to take advantage of higher yields in the future. The risk is missing out on higher yields now and losing purchasing power on cash sitting in lower-yielding investments, says Lau. If the money you plan to deploy in an annuity is sitting in a risk asset such as a stock mutual fund, you risk losing money if the stock market goes down.

"That's the biggest risk, especially those within five years of retirement," says Lau. Losses in the stock market close to retirement can be hard to overcome (an effect known as "sequence of returns risk") and can deplete retirement savings faster than planned.

4. Buy now and buy later. Another strategy is to hedge your bets by putting a portion of your money into an annuity at today's rates and adding more later to hedge against future rate volatility. "Average in,” says Massaro. "Don’t try to pick the top."

Whatever strategy you choose, shop around for the highest rates available from highly rated insurers. An insurer with an A or higher credit rating is a less risky bet than going for a higher rate offered by a lower-rated insurance company.

The bottom line: today's annuity rates are plump enough to generate a solid income stream.

"It’s a good time to participate," says Massaro.

Weigh the downsides

Before you lock in an annuity, consider the drawbacks of fixed annuities.

Inflation. The most serious threat to a long-term annuity contract is inflation. For example, consider the buying power of the 5-year MYGA example above, with $100,000 invested and a 6.55% interest rate. At the end of five years, the insurance company will hand you a lump sum of $137,331, but its real purchasing power, adjusted for inflation, is $116,189.

You've beaten inflation and grown your real wealth by roughly $16,189, but your effective "real" rate of return after inflation is about 3.05% per year.

Penalties for early liquidation. Steep surrender charges, often up to 10%, apply if you liquidate your MYGA early. (SPIAs are similar to pensions and can't be cashed out.)

Taxed as ordinary income. Your annuity will enjoy tax-deferred growth, but gains will be taxed at higher ordinary-income rates rather than capital gains rates.

Read More

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• Do You Know the Pros and Cons of Annuities? Test Your Knowledge With Our Quiz
• The Rule of 240 Paychecks in Retirement
• Kiplinger Readers' Choice Awards 2026: Annuity Providers

Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers who are paid tax return preparers. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. How much can you rely on the IRS's frequently asked questions?

Question: It seems that for the past several years, the IRS has issued lots of its tax law guidance quickly in the form of frequently asked questions (FAQ). Can my clients rely on the agency's FAQs to avoid penalties if the IRS audits them?

Joy Taylor: In many cases, yes. Although the IRS's FAQ guidance does not rise to the level of legal authority and cannot be cited as precedent to support the merits of a taxpayer's position, taxpayers can rely on them to escape accuracy-related penalties. Taxpayers who can show that they relied on the FAQs in good faith and that such reliance was reasonable based on all the facts and circumstances have a valid reasonable-cause defense and won't be subject to the negligence penalty or other accuracy-related penalties.

The IRS includes the following language in each of its FAQ guidance documents:

"These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so."

2. Do paid preparers need a data security plan?

Question: I am a self-employed tax return preparer. I heard that the IRS requires all paid preparers to have a data security plan. Is this true?

Joy Taylor: Yes. Having a data security plan is mandatory for paid tax return preparers. In part, that's because preparers are a frequent target of cyberthieves, who prey on them in their quest for taxpayer personal information.

Anyone who prepares or assists in preparing federal tax returns for compensation must have a preparer tax identification number (PTIN) from the IRS that they renew each year. The form that preparers use to apply for or renew their PTIN requires them to check yes or no to the following statement: "I am aware that paid tax return preparers are required by law to create and maintain a written information security plan that provides data and system security protections for all taxpayer information."

IRS provides help for preparers who need to create a written information security plan. IRS Publication 5708 includes a template of a written information security plan (or WISP) that preparers can use as a starting point and amend according to their own situation.

3. IRS regulation of unenrolled preparers

Question: I am a tax return preparer. I am not a CPA, enrolled agent or lawyer. I heard that Congress wants to make it harder for me to get a preparer tax identification number (PTIN) each year. Can you explain exactly what Congress is proposing for tax return preparers?

Joy Taylor: In late September, the Senate approved a bipartisan bill called "The Taxpayer Assistance and Service Act" that has over 60 proposals covering 10 broad topics:

• Tax administration and customer service
• U.S. citizens who live abroad
• Streamlining judicial review for filers who challenge IRS in court
• Tax return preparers
• IRS's Taxpayer Advocate's office
• IRS's appeals office
• Whistle-blowers
• U.S. citizens held hostage overseas
• Small businesses
• Miscellaneous provisions

One of the sections in this bill would let the IRS regulate unenrolled paid tax return preparers. An unenrolled preparer is someone who prepares tax returns for money but is not a CPA, lawyer, enrolled agent or a comparable state-licensed holder.

Under the bill, unenrolled preparers would have to meet various requirements in order to apply for or renew a PTIN each year. These preparers must provide information about their competence and character, pass criminal background and tax compliance checks, and take up to 18 hours of continuing education courses. Importantly, the proposal does not require unenrolled preparers to pass a competency exam. Under the proposal, the IRS would be able to deny, revoke or suspend PTINs for unenrolled preparers who don't comply with the rules.

Giving the IRS power to regulate unenrolled preparers has been tried before. Since 2014, after an appeals court struck down the IRS's administrative oversight rules for unenrolled preparers, the IRS's National Taxpayer Advocate, Treasury inspectors, government auditors and tax practitioner groups have pleaded with Congress to let the IRS regulate unenrolled preparers. But this has always faced a wall of naysayers in the House and Senate, mainly Republicans, with added pressure from key free-market groups that oppose giving the IRS more statutory authority to regulate preparers.

But some tax professionals say this time could be different. The current language in the bipartisan Senate bill is more modest when compared with prior proposals. Democrats have made preparer oversight a top priority. And it is well-documented that unenrolled preparers make more errors with their clients' refundable credits and certain other tax breaks, when compared with filers who do their own returns, CPAs, enrolled agents, attorneys, and volunteers with tax-filing assistance programs.

Now that the Senate has approved the Taxpayer Assistance and Service Act, the ball is in the House's court. Maybe we will see the House act on the bill in the short time period after the midterm elections and before lawmakers head home again for the December holidays. There are many factors that will determine this, including which party comes out ahead in the midterms, other items on the House's plate, and the determination of legislators to focus on taxes.

4. What are the electronic filing rules for client returns

Question: I am a part-time, self-employed tax return preparer. On average, I prepare about 15 Form 1040 tax returns each filing season for my clients. I prepare the returns on paper and give them to my clients to file. Someone told me that I have to file my clients' returns electronically each year. Is this accurate?

Joy Taylor: The rules for tax preparers on electronic filing of client tax returns are thorny, but I'll try to explain them as simply as I can.

The preparer e-filing rules have been around since 2011. As a general rule, preparers who expect to file more than 10 Forms 1040, 1040-SR, 1040-NR or 1041, or any combination of these during the year, must electronically file them with the IRS.

There are three escape hatches to this general rule:
First, your clients can opt out of e-filing. Returns that clients mail to the IRS themselves are not treated as filed by the preparer and do not count against the 10-return cap. Clients must opt for this in writing. Preparers must keep a copy of the clients' signed statements in their file and attach the IRS Form 8948 to the tax return that the client mails to the IRS. Note that you can provide filing instructions, addressed envelopes, stamps, etc., as long as the client actually mails the return.

Second, preparers who don't e-file returns can request a hardship waiver using IRS Form 8944. To seek a hardship waiver, you must generally send the 8944 to the IRS by February 15 of the year for which the waiver is sought. Note that the IRS is sometimes a bit stingy in granting these waivers. Also, the waivers are valid for one calendar year.

Third, there are a few very narrow administrative exemptions. For example, one is for preparers who are members of certain religious groups who oppose e-filing.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not, and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

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If you thought of your client's career as an investment, what would it be? Would it be safe, like a bond? Or risky, like a stock?

Conventional wisdom says a person's career is more like a bond. The rationale is simple: Most people receive a relatively stable paycheck, so their career income has low volatility.

From there, the traditional advice follows that younger people can afford to take more risk in their investment portfolios and then gradually reduce their equity exposure as they approach retirement.

The logic sounds reasonable as a rule of thumb. The problem is that it's disconnected from how careers actually work. For starters, volatility and risk are not the same thing.

What can go wrong with a career?

Think about some of the risks embedded in human capital:

• Job loss. Career income is illiquid. You can sell a bond whenever you want, but you have to work to get paid. Even a temporary disruption to income can create a cash crunch.
• Disability. This is an obvious risk for certain professions, such as professional athletes, but an unexpected health event can leave anyone temporarily or permanently unable to work.
• Death. For someone with dependents, this raises a very practical question: What happens to my spouse or children if my income disappears?
• Displacement. This risk is particularly relevant in the age of AI. It's anyone's best guess which jobs and industries will be disrupted over the next decade.
• Professional liability. Doctors, lawyers, accountants, executives and others may have substantial career risk tied to litigation or professional mistakes.
• Skill. Career success isn't guaranteed. You may be a CEO spending as though you have another 10 years of high income ahead of you, but a few bad decisions can quickly bring humility to those expectations.
• Volatility. And yes, volatility matters too. Income can fluctuate considerably for people who rely on bonuses, commissions, equity compensation or other forms of variable pay.

Are all these risks important for every client? No, every career is different, and that's a key point.

Looking only at the volatility of somebody's paycheck misses the bigger picture. Human capital isn't a "safe" income stream that we can simply drop into a Monte Carlo simulation. It is a major source of wealth with its own liquidity, concentration, personal and economic risks.

The good news: Many of these risks are manageable

Many of these problems have solutions. A reserve fund can cover expenses during a job loss, buying someone time to find the right next position instead of taking the first available paycheck. Insurance can address disability, death and professional liability risks.

The investment portfolio can also play a role. If a client works in technology and much of their future wealth already depends on the technology sector, maybe their portfolio should have less exposure to tech stocks.

The portfolio can help diversify risks that already exist elsewhere in the client's financial structure.

Of course, not every career risk can be neatly hedged. If AI displaces your job, the solution may involve retraining, changing industries or reducing spending for a period.

Professional liability insurance may cover a malpractice settlement, but it doesn't find you another job. Disability insurance can replace some income, but it generally can't re-create the full economic value of a career.

Risk management doesn't mean eliminating uncertainty. It means identifying the things that could materially affect the client and putting practical protections in place where you can.

So what type of asset is human capital?

In my view, human capital looks much more like a private business than a bond.

Start with the opportunity. For most people, their career is one of the most important engines for wealth creation. Outside of the ultra-wealthy (and even many of those families originally created their wealth through somebody's career or business), human capital is often responsible for producing the majority of lifetime wealth.

Then consider the risks. Like a private business, human capital is:

• Illiquid. You have to work to realize its value. You can't sell 20% of your career tomorrow because you need cash.
• Concentrated. Your eggs are largely in one basket. An injury can end an athlete's career just as a professional mistake can materially impair the career of a doctor, lawyer or executive.
• Non-tradeable. You can't exchange careers with somebody else. If your profession becomes obsolete and you need to retrain, you may be starting over.
• Uncertain. You own both the upside and downside of your future earnings. The result will depend on some combination of skill, effort and luck.

Once you start thinking about human capital this way, the planning implications become more interesting. Instead of simply saying, "You're young, so you can own more stocks," an adviser can ask more useful questions:

• How resilient is this person's career?
• How accessible is their wealth?
• What happens if their income disappears?
• Is their investment portfolio doubling down on risks they already have through their job?
• What protections would allow them to take career or investment risk more confidently?

Those questions get us much closer to real risk management.

Human capital can also offset bad luck

Human capital isn't just something we need to protect. It can be an important risk management tool in itself.

Imagine someone is about to retire and the stock market suddenly falls 30%. If they're already retired, their options may be limited. They may need to cut spending or sell investments in a down market.

Someone who is still working has another lever available: Their career. They could delay retirement for a few years. They might work additional hours, pursue a higher-paying role or temporarily trade some work-life balance for additional income.

None of those choices is necessarily desirable, but having the option is valuable.

This flexibility can offset bad luck elsewhere in the financial structure, and that has implications for the portfolio. Someone with significant career flexibility may reasonably be able to tolerate more investment risk because they have another resource available if markets disappoint.

The opposite may be true for retirees, or even for younger individuals with fewer marketable skills.

Of course, the right approach depends on how human capital relates to the broader financial picture and interacts with an individual's unique risks.

Bringing human capital into the total wealth picture

Ultimately, I don't think advisers should treat human capital as a safe bond or simply as another line item in a planning projection.

It is a unique asset that creates wealth and carries risks. It can be protected with reserves, insurance and diversification. And, because careers give people the ability to adapt their future income, human capital can sometimes help absorb bad outcomes elsewhere.

That's why it belongs in the same conversation as the investment portfolio, private assets, real estate, liabilities, insurance and other components of a client's total wealth.

Advisers are in a unique position to see all those pieces together. When you understand the client's career as part of that broader financial structure, you can move beyond simplistic rules of thumb and start asking a more useful question:

What can we do to help the client navigate their key risks and maximize their wealth potential?

Related Content

• The Bear Market Protocol: 3 Strategies to Consider in a Down Market
• Why Company Stock May Be Riskier Than Employees Realize
• Taming Risk: Offensive vs Defensive Investing Strategies
• The Retirement Mindset Shift: Deciding When to Ease Off Risk
• Starting to Advise Ultra-Rich Clients? Don't Rebuild Your Firm, Just Rethink It

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Editor's note: This is part one of a two-part series on how financial professionals can help their clients avoid costly retirement mistakes.

For many pre-retirees, the transition into retirement doesn't unfold as carefully as they expected.

After years of disciplined saving, the focus suddenly shifts to income — and that's where things can feel rushed. Decisions are made quickly. Accounts are tapped without a clear sequence. Tax consequences show up later.

In other words, their approach is: Ready, shoot, aim.

At Wealthcare Advisors (WCA), we believe retirement income planning isn't something clients should figure out on the fly. This is where they need a skilled and knowledgeable financial advisor.

Before your client locks in their retirement date, there are several key questions — and more importantly, the how and why behind them — that deserve attention. That's what we'll look at in this two-part series.

Which accounts should you tap first — and why?

Retirement income doesn't come from a single paycheck. It comes from a coordinated strategy across different types of accounts:

• Tax-deferred (IRAs, 401(k))
• Tax-free (Roth IRAs)
• Taxable brokerage accounts

The question for clients isn't just, "Where do you pull money from?" It's also, "Which order makes sense for your situation?"

A structured withdrawal strategy can prolong the life of their assets, smooth out tax exposure over time and create flexibility in future years.

For example, drawing only from tax-deferred accounts early may seem logical, but it can create larger required minimum distributions (RMDs) later, potentially pushing a client into higher tax brackets and increasing Medicare premiums.

On the other hand, using taxable or Roth assets strategically in earlier years may allow them to proactively manage their tax position before RMDs begin. The difference-maker is intentional design — not convenience.

How do market conditions affect withdrawal decisions — and how should advisors respond?

Market volatility doesn't stop at retirement, but your client's strategy should account for it differently. The biggest risk isn't just market decline — it's withdrawing income during that decline. That is where sequence of return, or sequencing, risk becomes a reality.

So, how should you respond? Collaborating with your team and developing a plan mitigates much of this quote unknown risk.

A thoughtful income plan may include maintaining a short-term income "buffer" to avoid selling assets in down markets, adjusting which accounts clients draw from based on current market conditions, and diversifying income sources so they're not relying solely on portfolio withdrawals.

Instead of reacting emotionally, the goal is to build a system that anticipates market cycles and adjusts accordingly. You and your clients can't control the markets — but together, you can control how and where they get their income.

Related Content

• The Best Advisers Help Their Clients Use Their Retirement Fear Constructively: Here's How
• Advisers: This Outdated Retirement Rule Actually Un-Diversifies Your Clients
• How to Turn Wealthy Clients' Charitable Giving Into a Cohesive Plan
• Old Annuities Contain Untapped Potential for Clients and Advisers: Here's Why
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

As part of our Trillion Dollar Talk campaign, Kiplinger editors — Alexandra Svokos, Kiplinger digital managing editor and Diane Harris, Kiplinger Personal Finance Magazine deputy editor — brought together three of our favorite experts to discuss inheritance.

We had an invigorating conversation about how families can approach these conversations and the types of problems that often come up, as well as highlighting possible solutions for those scenarios.

Joining us for our panel conversation were: Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth®; Brad Klontz, associate professor of practice in financial psychology at Creighton University Heider College of Business; and Ryan Coon, attorney at Anderson Advisors and J.D. from Willamette University.

Watch the full conversation here:

During this episode of Kiplinger Conversations, we asked viewers to send us their questions. Here's a round-up of those questions, along with our responses. If you have questions on this topic, please reach out to us at KipInheritanceTalk@futurenet.com.

We will do our best to answer as many questions as we can, and your questions might inspire future articles for Kiplinger. The answers provided by our editors are for general informational purposes only. Not all questions submitted will be published, and some will be edited for clarity.

1. Addressing specific numbers.

Question: The overarching question is, how do you have an informed conversation with your adult children without having to discuss specific dollars and cents?

Diane Harris: Great question! It's a very common concern among parents, not wanting to disclose exact numbers.

And you don't need to, honestly. Your general intentions, and why you've made the decisions you've made, and what plans you have in place are what the kids need to know, not numbers. After all, those numbers can change, depending on how long you live and what your expenses will be, particularly when it comes to health or long-term care.

The critical details are not the amounts you intend to leave but whether you have a will and other estate planning documents and, if so, where to find them; the kind of assets you have (for example, do you have accounts that will pass outside of a will, property in addition to your primary residence, investment accounts, and so on); and how you plan to divide them and why.

In particular, it's important to explain your thinking if you intend an unequal distribution of assets among your children, so they understand your reasoning.

And if you have money you intend to give for specific purposes during your lifetime — say, if you plan to help pay for a wedding or assist with the down payment on a home or your grandchildren's college education — it would be good for the children to know that too, so they can plan accordingly.

Alexandra Svokos: It's not unheard of to be concerned about this. In our Trillion Dollar Talk survey, conducted by Morning Consult, we asked adult children to write in the one question they would want to ask their parents about a possible inheritance. The most common response we heard was a version of, "How much will I receive?"

On the flip side, the most common reason parents said they haven't talked to their kids about inheritance yet is that "there are too many unknowns."

Don't let this uncertainty stop the conversation from happening in the first place.

As Diane said, you don't have to lay out everything in your estate — but I would recommend you aim to give your children a ballpark idea of what's in your estate so you can both plan appropriately. Again, exact numbers aren't what matter here; you just don't want to leave them surprised and unprepared when you're gone.

Additional reading:

• We Know You'd Rather Talk to Your Kids About Politics Than Inheritance. Here's the Right Way to Have That Conversation Anyway.
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What to Do About It
• Counting on the Great Wealth Transfer? Why It May Not Pan Out the Way You Hope

2. One-on-one vs group conversations

Question: Do you feel it is better to have a family group inheritance discussion or one-on-one with each family member?

Alexandra Svokos: The answer to this largely depends on your own family dynamics. If your family regularly has open (and healthy) conversations about finance and future planning, a group setting would make sense. If, however, group settings tend to bring up arguments, you may want to start the conversations one-on-one.

Starting with a one-on-one conversation is also helpful if you're splitting an estate anything besides explicitly equally — that way, you can explain your reasoning without having to balance group dynamics, and you'll be in a space where the heir can openly ask questions to understand your decisions.

But what I would keep in mind, as Ryan said, is that it's not a one-and-done conversation. You can have both group discussions and one-on-one conversations to make sure everyone feels comfortable and confident.

Additional reading:

• The Conversation You’re Avoiding: How to Bring Up Estate Planning with Your Family

3. Handling older parents' finances

Question: My husband is an only child, and his parents own two homes. They are 88 and 87. They have made it clear that everything is coming to us and have started to gift us the max each year $76,000.

We don't know how much they have, and we don't need the money. We worry that they might need extensive care as they get older (her mother lived to 106 years old). We are keeping the money in an interest-bearing account so we can use it for them if they need it later. Are there any recommendations as to how/where we keep these funds they are gifting to us? We want to do what is best for them.

Alexandra Svokos: Thanks for your question. Long-term care costs are something many families are worrying about. In fact, our survey found that 24% of older parents fear that ongoing care costs will deplete their estate.

First and foremost, we recommend speaking to professionals for advice on your own particular case. Our answers here are for general information purposes only.

As a general principle, it's worth having a conversation to ask parents if they have their own plans for managing long-term care. They may feel comfortable making gifts because they have a plan in place, for example, and if not, you can discuss how to set up a plan and what makes sense for you both.

Again, this is generally speaking: If you have funds you may need to use within a short time span, an interest-bearing account where you can immediately access funds (like a high-yield savings account) is a decent idea. If you feel sure you won't have to use funds for a longer time period, you can consider CDs (which typically have higher rates, but lock your money in for a set time period) or investing in the market, although that comes with higher capital gains tax rates if sold within a year, and of course, more risk than, say, a locked-in CD.

Additional reading:

• No One Wants to Ask Their Aging Parents About Their Finances, But Here's How
• Where to Put Inherited Money
• Gift Tax Exclusion 2026: How Much You Can Give Tax‑Free This Year
• I Have $150,000 That I Don’t Need Anytime Soon, but I Don't Want To Put It in the Market. What Should I Do?

4. Estate planning for blended families

Question: Given the realities of today’s blended and often fractured family dynamics, is there a provision that allows us to safeguard the inheritance so it stays within the family?

Diane Harris: Yes, in blended families, as our panelists mentioned during the discussion, a will is often not sufficient to ensure your assets pass as you want them to and protect the people you love and want to provide for.

One key estate-planning tool that helps with this is a trust, which allows you to make stipulations — for example, you might set up a trust in a way that provides for a surviving spouse during his or her lifetime but then ensures that the remaining assets will pass to your children from a previous union. Whatever the specifics you want to put in place, a trust is often a good tool. Laying out your intention for personal property in a letter of intent, while not legally binding, is also often helpful.

Often the most contentious items in an estate — in all families, not just blended ones — are items with emotional resonance, not the investment portfolio. Who gets Mom's engagement ring or Dad's prized watch or the ornament that sat on top of the Christmas tree or Grandma's yellow pie plate… those are the items that can cause the greatest friction in families, experts tell us.

An estate planning attorney can help with all of these decisions. You can find them either via personal recommendations from people you trust or by checking a professional directory such as those from the National Association of Estate Planners and Councils or the American College of Trust and Estate Counsel (ACTEC) Directory.

Additional reading:

• The 5 Essential Trusts You Need for 2026 Estate Planning
• This Is How the 'Brady Bunch' Safety Net (aka a QTIP Trust) Protects Your Kids' Inheritance
• The Six Estate Planning Steps Every Blended Family Must Take
• The Little-Known Tool to Protect Your Retirement Savings in a Divorce

5. Children with particular circumstances

Question: How do I or you address issues of a child with dementia and estrangement, re any or partial benefits of an inheritance?

Alexandra Svokos: This is where you definitely want to make sure to get professionals involved. If you are planning to leave something to a child or other heir with whom you're estranged, a letter of intent can help explain the inheritance to them without breaking an estrangement. I would just caution you to remember that a letter of intent is about explaining an inheritance, not about reopening conversations when you're not around to have them.

For a child with dementia or special needs, the answer here is again to make use of trusts. You can, for example, set up a special-needs trust. This is also why I say you'll need professionals involved – be careful about setting these systems and guardrails up so that your legacy gets used in the way in which you want it to be used.

Additional reading:

• The Benefits of a Special Needs Trust
• A 5-Step Plan for Parents of Children With Special Needs, From a Financial Planner
• Managing the Financial Dominoes of Special Needs Planning: A Practical Guide for Long-Term Security
• How to Plan for Retirement When Your Child Has Special Needs
• Is a Living Trust the Right Move for Your Estate Plan?