When I was a kid, my parents worked hard to buy our family's first home. It was an older house, and after years of apartment living, we weren't quite prepared for all the strange noises that came with it.

Those first few nights were terrifying. Something was scratching deep inside my bedroom closet, and I was convinced something sinister was trying to get out. After conducting my own intense investigation, which involved throwing a shoe into the dark abyss and hoping for the best, I called in reinforcements. My parents eventually investigated the mysterious ghoul lurking in my closet, only to discover the culprits were squirrels living inside the walls.

Fortunately, our haunting had a perfectly reasonable explanation and resolution. But not every strange noise or unexplained occurrence in a home is harmless.

From flickering lights to mysterious smells and creaking floors, your house could be trying to tell you something. And while the explanation probably isn't supernatural, ignoring these warning signs could lead to some frighteningly expensive home repairs.

Here are seven spooky signs to watch for and what they could mean for your home and your wallet.

1. Doors that open or close on their own

There's something unsettling about watching a door slowly creak open when nobody is on the other side. Before you blame a ghost, though, there are a few perfectly reasonable explanations.

Loose hinges, uneven floors and changes in air pressure can cause doors to swing open or shut on their own. Temperature and humidity changes can also cause wood to expand and contract, affecting how doors fit in their frames.

Some settling is a normal part of homeownership, especially as a house ages. Small cracks in drywall or around door frames aren't necessarily signs of serious structural problems. Even newer homes can experience minor settling.

However, if several doors suddenly start sticking, won't latch properly or look crooked, it could be a sign of foundation movement or another structural issue. Cracks that continue to widen or uneven floors are additional warning signs worth investigating.

The financial fright: A loose hinge might take just a few minutes and a screwdriver to fix. Significant foundation repairs, on the other hand, can cost thousands of dollars.

If you suspect a structural problem, a professional foundation inspection typically costs between $300 and $1,000, according to HomeGuide. An independent structural engineer may cost more but can help determine whether repairs are actually necessary before you commit to an expensive project.

2. Lights that flicker without explanation

Flickering lights are a classic sign of a haunted house in horror movies, but in real life, they could be warning you about an electrical problem.

Sometimes the explanation is simple. A loose light bulb, an aging fixture or a large appliance drawing power can cause lights to flicker or briefly dim. However, persistent flickering could indicate overloaded circuits, loose electrical connections or deteriorating wiring.

Pay attention if the flickering is accompanied by buzzing outlets, unusually warm switches, burning smells or circuit breakers that frequently trip. These could be signs of a potentially dangerous electrical problem that warrants a call to a licensed electrician.

Homeowners can also use technology to help monitor potential electrical hazards. A Ting sensor plugs into an outlet and monitors electrical signals for patterns associated with potential fire hazards. An infrared thermometer, sometimes called a laser temperature gun, can help identify unusually warm outlet covers or electrical panels without touching them. However, these tools can't detect every electrical hazard or replace a professional inspection.

The financial fright: According to Angi, a professional electrical inspection typically costs between $75 and $500, with homeowners paying around $150 on average.

I learned firsthand why it's worth investigating flickering lights. What I initially thought was a loose light bulb turned out to be frayed wiring hidden behind the drywall of one of my rental properties. It cost $800 to locate and repair the problem, but that's a drop in the bucket compared with the potential damage and expense of an electrical fire.

3. Cold spots in otherwise warm rooms

Ever walked into a room and felt an unexplained chill, even though the rest of the house is perfectly comfortable? Before you assume a ghost is hanging around, consider whether your home is losing heat.

Cold spots are often caused by drafts, insufficient insulation or poorly sealed windows and doors. Missing insulation inside walls can also create noticeable temperature differences, particularly in older homes. Sometimes the problem isn't insulation at all. Blocked vents, leaking ductwork or uneven airflow from your heating system can leave certain rooms feeling colder than others.

Start by checking for drafts around windows and doors, making sure heating vents aren't blocked by furniture and looking for gaps in accessible ductwork. You may also want to consider a home energy audit to identify areas where your home is losing heat. Depending on the type of audit, a professional may use thermal imaging, blower door testing or other diagnostic tools to pinpoint air leaks and insulation problems.

The financial fright: Those mysterious cold spots could be driving up your utility bills. According to Angi, a professional home energy audit typically costs between $212 and $698, depending on your home's size, location and the type of testing involved.

Additional diagnostic tests or follow-up visits may cost extra. Before paying out of pocket, check with your utility company to see if it offers free or discounted energy assessments. An audit could help you prioritize improvements that reduce energy waste rather than spending money on repairs you might not need.

4. Mysterious knocking behind the walls

Hearing unexplained knocking, tapping or scratching behind your walls can make you wonder what's lurking on the other side. As I learned from the squirrels living in my childhood bedroom closet, sometimes there really is something hiding in there.

But not every mysterious noise means you have unwanted houseghosts. Banging or knocking sounds could be caused by water hammer, which occurs when flowing water suddenly stops or changes direction, creating a pressure surge in your plumbing. Pipes and ductwork can also make popping or tapping noises as they expand and contract with temperature changes.

• Pay attention to when the noises occur. Banging shortly after turning off a faucet or running the washing machine could point to a plumbing issue.
• Popping sounds when the furnace kicks on may be related to expanding ductwork.
• Irregular scratching, scurrying or gnawing sounds, especially at night, could indicate mice, squirrels or other pests have found their way inside.

If the noises persist, consider calling a plumber, HVAC technician or pest control professional, depending on the suspected source. Ghostbusters should probably be last on your list.

The financial fright: Ignoring these sounds could lead to more than a few sleepless nights. Repeated water hammer can stress plumbing connections and contribute to leaks and water damage.

Rodents can chew through insulation and electrical wiring, creating expensive repairs and potential fire hazards. Identifying the source early could save you from a much bigger problem hiding behind your walls.

5. Musty smells that come and go

Sometimes your nose knows something is wrong before you see any signs of trouble. After years of walking through homes as a real estate agent, I've found that my sense of smell is often the first thing to alert me to a problem, whether it's a gas leak, hidden water damage or stagnant water.

A mysterious musty or earthy smell that comes and goes could indicate excess moisture, a hidden leak or poor ventilation. Basements, crawl spaces, bathrooms and areas around windows are common trouble spots. You might notice the odor more after heavy rain or during periods of high humidity.

Just because you can't see water damage doesn't mean it isn't there. Moisture can collect behind drywall, underneath carpeting or inside wall cavities long before visible stains appear. Look for discoloration, peeling paint, condensation, damp flooring or soft spots around windows and baseboards.

If the smell keeps returning, try to identify when and where it's strongest. A moisture meter or professional inspection may help uncover a hidden problem before it spreads.

The financial fright: A small leak left unchecked can lead to damaged drywall, rotting subfloors, ruined insulation and mold growth. What might have been a relatively inexpensive plumbing repair could turn into a much larger restoration project. Finding the source of the moisture early is often the best way to keep repair costs under control.

One important distinction: A rotten-egg or sulfur-like odor could indicate a natural gas leak, not a moisture problem. If you suspect a gas leak, leave the home immediately without operating electrical switches or appliances and contact your gas utility or emergency services from a safe location.

6. Windows that rattle or whistle

A howling wind outside might set the mood for a spooky night, but hearing it whistle through your windows when they're tightly shut is another story. Those eerie sounds could mean your home is letting in more than just a little fresh air.

Over time, weatherstripping can deteriorate, caulking can crack and window components can loosen. These small gaps allow outside air to sneak inside, creating whistling sounds and uncomfortable drafts. Windows may also rattle during strong winds if the glass or frame isn't properly secured. In some cases, the problem could be related to improper installation or damaged window components.

Before assuming you need new windows, check for worn weatherstripping, cracked caulking and visible gaps around the frames. Replacing weatherstripping or sealing small gaps can be an inexpensive DIY project. However, windows that shift in their frames, won't close securely or show signs of water damage may need professional attention.

The financial fright: Drafty windows can increase your heating and cooling bills, but replacing them isn't always necessary. According to a 2026 survey by This Old House, homeowners pay an average of $517 per installed replacement window, with total replacement projects averaging $7,183.

Before making that investment, consider less expensive fixes. A relatively small repair could stop the howling without the expense of replacing an otherwise functional window.

7. Floors that suddenly creak or feel uneven

Every haunted house seems to have a staircase that creaks when nobody's walking on it. Fortunately, a squeaky floor in your home doesn't necessarily mean something sinister is lurking beneath it.

Creaking floors are common, especially in older homes. Wood naturally expands and contracts with changes in temperature and humidity, and loose nails or subfloor fasteners can cause floorboards to squeak when you walk across them. In many cases, these noises are simply part of a home's character.

However, new or worsening creaks, sagging floors or areas that suddenly feel soft underfoot could signal a more serious problem. Moisture damage, deteriorating subfloors, weakened floor joists or foundation movement can all affect the stability of your flooring. Other warning signs include cracks appearing along walls or doors that no longer close properly.

If you notice these changes, consider having a flooring contractor evaluate the problem. For significant sagging, sudden changes in floor level or other signs of structural movement, an independent structural engineer can help determine what's happening beneath your feet.

The financial fright: Fixing a squeaky floor might be as simple as securing loose floorboards, but repairing damaged joists or structural components can cost thousands of dollars.

According to Angi, hiring a structural engineer typically costs several hundred to a few thousand dollars, depending on the scope of the inspection and whether a detailed engineering report is needed. Getting an independent assessment could help you avoid unnecessary repairs while identifying serious problems before they become more expensive.

When your house is trying to tell you something

Not every strange noise, mysterious smell or flickering light means your home needs expensive repairs. Houses naturally settle, materials expand and contract with temperature changes and mechanical systems make noise. The trick is knowing what's normal and when something deserves a closer look.

Pay attention to patterns. Does the knocking start when the furnace kicks on? Does a musty smell appear after heavy rain? Does the banging happen when you turn off a faucet? These details can help you narrow down the source of a problem.

Document anything unusual with photos, videos or notes about when it happens. If the problem persists or gets worse, consider calling a qualified professional. Electrical hazards, unexplained moisture and sudden structural changes shouldn't be ignored.

It's also a good idea to maintain an emergency home repair fund. Even well-maintained homes can surprise you with unexpected expenses, and having money set aside can make it easier to address problems before they become more costly.

The next time your house goes bump in the night, don't call a ghost hunter. Pay attention to what your home might be telling you. After all, the scariest thing lurking behind your walls could be a repair bill you didn't see coming.

Unexpected home repairs can put a strain on your budget, especially when the damage is extensive. If you have built up equity in your home, a home equity loan or home equity line of credit (HELOC) could help cover major repair expenses.

Compare current home equity rates and explore your borrowing options with the tool below:

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Stocks closed higher Tuesday as market participants panned a busy batch of corporate earnings reports and looked ahead to tomorrow's Federal Reserve policy announcement. Chip stocks were a notable pocket of strength, with several mega caps soaring on news of a $63 billion deal between Broadcom (AVGO) and Anthropic (ANT).

At the close, the tech-heavy Nasdaq Composite was up 1.2% at 26,477, the broader S&P 500 was 0.6% higher at 7,722, and the blue-chip Dow Jones Industrial Average had added 0.03% to 52,377.

Broadcom jumped 4% to trade near the top of the S&P 500 after the chipmaker late Monday announced a $63 financing deal that will allow Anthropic to buy AVGO's artificial intelligence (AI) technology.

The agreement is not a straightforward purchase. Rather, four major financial institutions — Bank of America (BAC, +0.3%), BlackRock (BLK, +0.7%), Citigroup (C, +1.4%) and Morgan Stanley (MS, +1.9%) — will finance purchases of Broadcom's AI chips and infrastructure via a special purpose vehicle (SPV), which will then lease the hardware to Anthropic.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

"The announcement should help ease investor fears around financing the AI buildout, in our view," says Oppenheimer analyst Rick Schafer, who has an Outperform (Buy) rating on the semiconductor stock. "AVGO is providing residual value support (RVS) up to the first-lien financing amount rather than an upfront cash investment."

The upside had a halo effect on other chipmakers, including Advanced Micro Devices (AMD, +5.5%), Intel (INTC, +3.6%) and Micron Technology (MU, +2.8%).

Boeing stock slumps after earnings

Boeing (BA) was the worst Dow Jones stock today, shedding 10.7% — its worst day since June 2020 — after the aerospace giant reported earnings.

While Boeing's third-quarter revenue of $24.2 billion came in higher than expected thanks to strong sales in its defense unit, its per-share loss of 34 cents was wider than analysts forecast.

The company also said it does not expect to ramp up production of its 737 Max planes until the second half of next year on slower-than-expected wing production.

JetBlue stock soars on strong outlook

After hitting a record low on Monday, JetBlue (JBLU) soared 19% today, its best day since April 9, 2025, after the discount air carrier reported earnings.

JBLU had a wider-than-expected per-share loss in Q3, and its revenue came in just shy of analysts' estimates. However, the company said it expects its revenue per available seat mile (RASM) — a key financial metric for airlines — to increase as much as 22% in Q4.

"All in, JBLU's trends appear to be strong operationally in areas within control," says UBS Global Research analyst Atul Maheswari. "High fuel costs remain a headwind, but we continue to believe JBLU has enough liquidity reserves to manage through at least the near term."

Consumer confidence rises ahead of the October Fed meeting

Several economic reports were released Tuesday, including better-than-expected readings on September new home sales and durable goods.

The Conference Board also released its latest Consumer Confidence Index, which rose 7.5 points from September to October, to 91.7.

The data reflect "improved perceptions of current and expected business conditions," says Fergus McCormick, senior economist of global indicators at The Conference Board.

Still, McCormick notes that consumer confidence remains in a long-term downtrend. "Consumers planned less spending on services and durable goods over the next six months. This likely reflected higher price levels and persistent inflation, which eroded consumers’ purchasing power."

Indeed, "further strength in the coming months is still required for the trend to turn and become a more meaningful tailwind," says Jordan Rizzuto, managing partner & CIO at GammaRoad Capital Partners.

The economic calendar remains busy the remainder of the week, with all eyes on tomorrow's conclusion of the October Fed meeting. You can follow along with all the latest news and updates on our live blog.

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Many years ago, we debuted the idea of a "stock market Mount Rushmore," evaluating America's best and worst presidents through the singular lens of equity performance.

But recently, we wondered: What if we viewed the Oval Office through a metric that speaks to all Americans? Say … inflation?

A recent Gallup survey suggests almost 60% of American adults own stock, but that still leaves about 113 million of us who don't. But virtually everyone can tell you how they've been affected by the various price pains they've absorbed over the past few years: housing, gas, vehicles, education, insurance, eggs, meat and more.

And while presidents may very well crow about stock-market performance where it's advantageous, few topics wield more influence on their and other politicians' electoral fates — and define their legacies — than inflation.

Concerns about rising costs helped Republicans take the House in 2022 and put Donald Trump into the White House for a second time in 2024. And persistent inflation is among the core reasons why polls are signaling a "blue wave" in the 2026 midterms.

So, let's look at what an inflation Mount Rushmore might look like.

How we calculated presidential inflation numbers

As far as datasets go, this one is pretty straightforward.

Our focus is the Consumer Price Index for All Urban Consumers, which measures the prices of various goods and services paid by urban consumers. This index is known as the CPI-U, but it's best known as just "CPI" — the headline measurement for inflation we regularly report on.

Specifically, we looked at seasonally adjusted CPI, which removes the effects of seasonal influences such as climatic conditions, holidays and sales.

Each president's average inflation is simply an average of the year-over-year CPI growth for every month they were in office.

Seasonally adjusted CPI data, provided by the Federal Reserve Bank of St. Louis, goes back to 1947, and thus YoY growth figures start at 1948.

The best and worst presidents for inflation

A quick reminder before we show you the list: Much like presidential policy can contribute to the direction of the stock market, presidents have some effect on U.S. inflation — but they're hardly the only determinant.

The Federal Reserve historically has had much more direct influence over inflation, and while presidents help shape the board, the central bank typically acts independently of the White House.

Outside factors weigh heavily, too. In just the past few years, we've seen the global post-COVID recovery, supply-chain chaos and Russia's war on Ukraine wreak havoc on consumer prices. And even when presidential policy influences inflation, it doesn't always do so immediately — in some cases, its effect isn't fully felt until after that president has left office.

That's a long way of saying that while presidents may very well be remembered for the inflationary environment they oversaw, being high or low on this list doesn't imply that the president was the cause of said inflation.

Without further ado, here's our list:

Average Inflation column represents the average year-over-year growth in the seasonally adjusted Consumer Price Index (CPI) for every month the president was in office, including partial months.

* Harry Truman's term lasted from 1945 through 1953. However, year-over-year growth data for the seasonally adjusted CPI only goes back to 1948.

Source: St. Louis Fed, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL), seasonally adjusted

Let's take a closer look at the five most recent presidencies to better understand just how much influence our leaders have actually had:

Data is as of October 24, 2026. Average inflation refers to seasonally adjusted CPI. The historical average includes CPI data since 1949.

President Joe Biden

• Term: January 20, 2021-January 20, 2025
• Average inflation: 4.90% (1.38 percentage points above 3.52% historical average)

Of the five most recent presidencies, former President Joe Biden's four-year stint was the only one in which inflation actually exceeded the long-term average.

Biden's $1.9 trillion American Rescue Plan Act was his most direct contribution to inflation, but that was merely additional fuel on top of a fire sparked by the factors we called out above. The U.S., along with the rest of the world, was reopening. Americans were flush with savings and ready to release pent-up consumer demand. But snarled ports, factory shutdowns and labor shortages kept goods scarce. Russia's February 2022 invasion of Ukraine sent energy and food prices soaring.

U.S. CPI peaked at a 9.1% annual rate in June 2022, marking the highest such reading since 1981. And while the Federal Reserve originally insisted the inflationary surge was "transitory," it rapidly ramped up its benchmark federal funds rate from near-zero to a range of 5.25%-5.50% by July 2023. That action helped to cool inflation down to below 3% for the majority of Biden's final year in office.

President Donald Trump (Second Term)

• Term: January 20, 2025-present
• Average inflation: 2.98% (-0.54)

Tariffs and the Iran War are the defining inflation stories of President Donald Trump's second term.

Beginning in 2025, the administration imposed sweeping import duties that it claimed foreign exporters would bear. But a 2026 report from the Federal Reserve Bank of New York found that 90% of the costs were foisted on U.S. consumers and businesses.

Then in late February, the administration waged what has turned into an eight-month (and counting) war against Iran that has sent oil prices skyward. In September, diesel prices reached an all-time high of $6.53 per gallon. And in mid-October, U.S. regular-gas prices hit 158 consecutive days above $4 per gallon — breaking 2022's record of 157 consecutive $4-plus days in a calendar year.

As it stands, Trump's second term is still on pace for below-average inflation, but the current average is right around where inflation stood on his second Inauguration Day.

President George W. Bush

• Term: January 20, 2001-January 20, 2009
• Average inflation: 2.89% (-0.63)

Former President George W. Bush's eight years began with a recession, the bursting of the dot-com bubble and the September 11, 2001 terrorist attacks.

Nothing you can really chalk up to "Dubya."

That said, the Fed responded by slashing rates; the effective federal funds rate plunged to around 1% by 2003. The Bush tax cuts of 2001 and 2003, as well as the costs of wars in Afghanistan and Iraq, added to demand. Cheap credit helped inflate a housing bubble, though shelter's weight in CPI and a flood of inexpensive imports from China kept inflation relatively tame for most of the period.

Energy was the wild card. Oil climbed from roughly $20 a barrel early in the term to a record near $147 in July 2008, driven by surging demand from emerging markets, supply constraints and geopolitical tensions. That spike pushed annual CPI above 5% that summer. Then the Great Recession hit, crashing commodity prices and demand alike, and inflation collapsed toward zero by the time Bush left office.

President Donald Trump (First Term)

• Term: January 20, 2017-January 20, 2021
• Average inflation: 1.90% (-1.62)

President Trump's first term produced low, stable inflation for three years, aided by a tight labor market that didn't translate into much wage-driven price pressure. Low energy prices and a strong dollar helped, too.

The Tax Cuts and Jobs Act of 2017 boosted demand late in the expansion, but the Fed responded with a series of rate hikes through 2018 before reversing course and cutting in 2019.

Trump dabbled in tariffs during his first term, too, placing duties on steel, aluminum and a wide range of Chinese goods. While these raised costs for some products (washing machines were a well-studied example), their impact on overall CPI was modest.

Then COVID-19 threw everything for a loop.

Lockdowns crushed consumer demand in spring 2020, driving annual inflation to almost nothing and dragging down the Trump I average. More than $3 trillion in COVID relief, via the CARES and Coronavirus Response and Relief Supplemental Appropriations acts, as well as near-zero interest rates, set the stage for the economic (and inflation) snapback that followed after Trump left office.

President Barack Obama

• Term: January 20, 2009-January 20, 2017
• Average inflation: 1.39% (-2.13)

Former President Barack Obama inherited the worst recession since the 1930s, and the slack it left behind kept a lid on prices for most of his tenure. Unemployment peaked at 10% in late 2009, and the U.S. economy actually experienced a period of deflation. A $787 billion stimulus package, as well as the Fed's zero-rate policy and quantitative easing, were met with weak demand and a sluggish recovery.

Even when inflation did pick back up, it spent much of the next few years below the Fed's 2% target (which the central bank adopted in 2012 under Bush appointee Ben Bernanke).

Inflation picked up to above 3% in 2011 when oil prices rose during the Arab Spring. But the U.S. shale boom ultimately flooded the market, and the U.S. dollar strengthened, kicking inflation back down to below 2% for most of the rest of Obama's second term.

Obama boasted the lowest inflation average of any recent president — so much so that one of the Fed's greatest worries was not too much inflation, but too little.

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The topic of this week's column comes from a vexed landlord, who writes: "Mr. Beaver, over the past two years I have been involved in a lawsuit from a guy who literally stubbed his toe on a tiny object sticking up from the sidewalk in front of a small strip mall I own.

"[My defense attorneys] could have taken his deposition early in the case, but did not, and tried to bring in the city, which was an expensive lost cause. They refused for months to tell me how much my insurance company was paying them.

"The case finally settled for peanuts — which could have been offered early on. Was I the victim of a conflict of interest with the law firm?"

How can property owners recognize when their insurance-appointed defense attorneys may be prolonging litigation and driving up legal fees rather than pursuing an efficient resolution?

I ran that question by Shant Karnikian, managing partner at Los Angeles-based Kabateck LLP. He provided practical guidance on how property owners can protect themselves during settlement, including verifying medical liens and bills, reviewing settlement language, and spotting provisions that could improperly release attorneys from liability.

"As a plaintiff's trial lawyer," Shant said, "I sue the people and businesses responsible for injuries. I also represent policyholders against their own insurance companies — folks who are being sued but having trouble getting their insurance company to protect them in that lawsuit. So I understand exactly where insured parties get hurt, often by the very insurer that's supposed to protect them — a company they've paid high premiums to for years.

"The bottom line policyholders need to understand: Your insurance company isn't your friend, even when it's paying your lawyer. And the defense lawyer they provide may have a conflict of interest."

Reservation of rights letter

I asked Shant if he could explain what it means if you receive a reservation of rights letter from your insurance company or the lawyer they hire to represent you.

"This usually means, 'We'll defend you, but we may not pay,'" he said. "These letters rarely spell out that you may have to fund the settlement."

To understand why, it's helpful to know how the insurance for liability coverage works.

Duty to defend vs duty to indemnify: The carrier (insurance company) must provide (appoint and pay for) a lawyer if a claim against you involves even a potential for coverage. However, the insurer must pay a settlement or judgment only for claims that are actually covered.

"That gap is where the insured often gets burned," Shant said. "Furnishing a defense does not necessarily mean they will fund your settlement (indemnify) ­— it depends on your policy."

So it would seem that having an appointed lawyer creates a false sense of security. Would it be wise to consult with your own lawyer to make sure the insurance company is doing the right thing?

"Yes," Shant agreed. "We represented a plaintiff injured on a homeowner's property. The carrier appointed defense counsel, so the homeowners thought they were covered. Only at settlement discussions did the carrier reveal it wouldn't contribute anything. The homeowners had to pay out of pocket.

"The carrier lulled them to sleep by creating the impression that defending them in the lawsuit also meant that they would pay for all damages."

The three-way relationship conflict

"While the law firm represents you," Shant said, "the carrier pays them and sends them repeat business. This creates a conflict of interest, incentivizing your defense attorney to protect the insurance carrier.

"For example, if facts come up in the case that affect your coverage, the way counsel handles them can shape whether or not you're covered — and, therefore, help determine whether the carrier has to pay out on the claim.

"This conflict may entitle you to independent counsel paid by the carrier and depends on your state's law."

Shant listed several red flags that suggest a serious conflict of interest:

• There's been no early case evaluation or settlement push.
• Defense conducts heavy discovery and motion practice on a small case.
• Defense says, "Plaintiff hasn't made a demand yet." (Nothing stops your attorney from making a demand or offer.)
• You receive no status reports or budget.
• Defense files costly cross-complaints when cheaper options exist, such as offering to pay policy limits to settle the case.

If you spot any of these, you should immediately consult a lawyer you've selected to monitor what the defense attorney is doing.

It's also important to realize that how much the attorney bills matters to the policyholder, even when the insurance company is paying for the defense lawyers.

First, you may still be paying deductibles.

Second, you may have a policy in which defense costs reduce limits. Future premiums may be affected by how much it costs to defend the case. The longer it takes to resolve, the greater the risk the case may grow beyond your coverage or limits.

What should you do if you're in this situation?

• Tell the carrier and defense counsel in writing that you want the case settled within the limits of the insurance policy as soon as possible.
• Instruct the defense attorney to communicate with you about every settlement demand and offer. If you receive a reservation of rights, ask in writing: "Will you fund a settlement? If not, why not?"
• Consider hiring your own lawyer to watch the carrier and push it to get you out of harm's way.

At settlement

• Make sure the entire case gets dismissed, including cross-complaints.
• Make sure that any release you sign doesn't include a release of claims you may have against the insurance company.
• Get confirmation that your insurance company won't be coming after you for money it pays out.

Bite-sized piece of advice

"A lawyer showing up to defend you is not the same as your insurance company agreeing to pay," Shant cautioned. "Waiting for a demand isn't a strategy. It's a reason to bill another month.

"A few thousand dollars for your own lawyer to watch the insurance company can be the best money you spend in a lawsuit."

Dennis Beaver Practices law in Bakersfield 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.

Nothing brings out taxpayer "creativity" quite like pursuing a bigger refund. Every year, millions of Americans scour their bank statements and receipts, asking the age-old question: "Can I deduct this?"

While the federal tax code clearly allows deductions for legitimate expenses, the line between a brilliant tax strategy and an audit waiting to happen can be notoriously thin. From volunteer mileage and medical home upgrades to grandkid gifts, the IRS has seen it all — and has strict rules about what passes muster.

So whether you're a seasoned self-employed pro or just trying to navigate your return on your own, test your knowledge against these five real-world tax scenarios to see if you can spot a legitimate deduction from a tax-court disaster.

This article is for educational purposes only. The content does not constitute financial, legal, or tax advice. Talk to a trusted tax professional before claiming tax breaks on your federal income return.

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In case your financial institution goes belly-up, it's important to make sure that all the deposits you have there are federally insured against bank failure. Generally, deposit-account balances receive Federal Deposit Insurance Corp. coverage of $250,000 per depositor, per bank. That includes your combined balances in checking accounts, savings accounts, money market accounts and certificates of deposit. (For more information on FDIC coverage, go to the FDIC site)

If the amount of savings that you'd like to park in a safe place exceeds FDIC limits, one solution is to use a service known as CDARS. Operated by financial-technology company IntraFi, CDARS offers a streamlined way to spread the money across certificates of deposit at multiple partner banks, preserving deposit insurance on the full balance.

If you want to save $1 million in CDs, for example, CDARS could split it into four deposits of $250,000, with each going to a different member bank.

And you can compare the best CD rates using this Bankrate tool:

As a depositor, you choose one participating institution that places your money for you; search for one at Intrafi. You'll receive a consolidated statement detailing all your deposits, and you'll earn a single interest rate on each CD maturity, set by the bank you're working with.

Recently, for example, CDARS rates from online bank Everbank included 3.05% on a three-month term and 3.57% on a two-year term.

If you'd rather not lock your money into CDs — especially given the likelihood that interest rates will rise in coming months — consider ICS, another service from IntraFi.

With ICS, your money is spread in increments of no more than $250,000 across money market deposit accounts, allowing you to take out your funds at any time without facing early-withdrawal penalties. As with CDARS, you have a relationship with one participating institution that divides up the funds.

Use this Bankrate tool to find and compare some of the best money market and high-yield savings accounts:

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.

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For some people, inheriting an IRA can feel like a financial windfall. But before you decide what to do with the money, there's a key question: How much will you actually keep after taxes?

The answer depends on more than the IRA balance. Where you live, your relationship to the person who left you the account, the type of IRA you inherited, and when you take the money out also matter.

That's why two people can inherit IRAs with the same balance and potentially face different tax bills. One beneficiary may have flexibility over when to take distributions, while another might have to empty the account within a set period. An heir in a state that taxes IRA distributions could owe more than someone in a state that doesn't.

Here's more to know about key factors that affect your inherited IRA tax burden.

Inherited IRA tax rules

To understand how much of an inherited IRA you'll keep, it helps to start with some basic tax rules.

Generally, inheriting an IRA isn't itself a taxable event for federal income tax purposes. Instead, taxes depend on the type of IRA you inherit and how you take distributions.

State tax rules can also affect how much you owe.

Things to keep in mind:

• Distributions from an inherited traditional IRA are typically taxed as ordinary income on your return, at applicable federal marginal tax rates.
• Qualified distributions from an inherited Roth IRA are generally tax-free.
• A 10% early withdrawal penalty often applies to IRA owners who withdraw money before age 59½, but it generally doesn’t apply to distributions from an inherited IRA, regardless of your age.
• Timing is also important. Many beneficiaries must meet distribution deadlines, and missing a required withdrawal can trigger a 25% federal IRS penalty on the amount you failed to take.

But those are federal rules. State tax laws can differ — sometimes significantly.

Some states tax IRA distributions based on where you live, while a handful impose inheritance taxes based on where the deceased person lived.

Together, these rules can affect how much tax you might owe on an inherited IRA and when you need to withdraw the money. Here are four key questions to consider.

1. Where do you live and where did the account owner live?

When it comes to state taxes, two questions can affect how much of an inherited traditional IRA you keep.

1. Does your state tax IRA withdrawals as income?

2. Did the person who left you the account live in a state that imposes an inheritance tax?

Five states currently impose inheritance taxes: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. (Whether you owe inheritance tax generally depends on where the deceased person lived or owned taxable property and your relationship to them.)

Estate taxes are different. The estate generally pays them before distributing assets to heirs. Twelve states and the District of Columbia impose estate taxes. Maryland is the only state that imposes both estate and inheritance taxes.

Note: At the federal level, taxable distributions from an inherited traditional IRA generally count as ordinary income.

An example: Suppose you live in Florida and inherit a traditional IRA from someone who lived in Pennsylvania.

Florida, a state without an individual income tax, generally won't tax your IRA withdrawals as income. Pennsylvania also generally exempts IRA distributions paid to a designated beneficiary.

But...Pennsylvania may impose its inheritance tax on the IRA balance if the deceased owner was age 59½ or older at death (or was disabled at death regardless of age).

When Pennsylvania inheritance tax applies, the rate depends on your relationship to the deceased:

• Surviving spouse: 0%
• Direct descendants and other lineal heirs: 4.5%
• Siblings: 12%
• Most other beneficiaries, including friends: 15%

Yes, it can get confusing and this is just one simplified example.

The takeaway: When inheriting a traditional IRA, consider both the state income tax on withdrawals and whether inheritance or estate taxes may apply. Rules differ by state, and the type of tax can affect how much you ultimately keep.

2. What was your relationship to the person who left you the IRA?

The rules can vary depending on whether you inherited the account from a spouse, parent, other relative, or someone unrelated.

A surviving spouse generally has options that most other beneficiaries don't. Depending on the circumstances, a spouse may be able to treat the inherited IRA as their own or keep it as an inherited account. Those choices affect the distribution rules and can influence when withdrawals are required.

An adult child who inherits a parent's IRA, however, generally can't simply treat the account as their own. Instead, the beneficiary rules apply.

• For many individual non-spouse beneficiaries who inherit from someone who died after 2019, the account generally must be emptied by December 31 of the tenth year following the year of the original owner's death.
• Exceptions generally apply to Eligible Designated Beneficiaries (EDBs), including surviving spouses, the owner's minor children (until they reach the age of majority, at which point the 10-year rule kicks in), disabled or chronically ill individuals, and beneficiaries not more than ten years younger than the deceased owner.
• The specific requirements depend on your beneficiary category and the circumstances of the owner's death.

It's also important to know that the 10-year rule for inherited IRAs doesn't mean every beneficiary can wait until the final year to withdraw the money. Depending on the rules that apply, you may need to take annual required minimum distributions (RMDs).

Additionally, your relationship to the deceased doesn't automatically set the federal income tax rate on a withdrawal. Rather, that relationship status determines which distribution rules apply and how much flexibility you have over timing.

The takeaway: Know your beneficiary category before you plan any withdrawals. Your relationship to the deceased may determine when you must take the money out, even though your taxable income generally determines the federal income tax rate you pay.

3. What kind of IRA did you inherit?

Not all inherited IRAs are taxed the same way. One key distinction is whether the account is a traditional IRA or a Roth IRA.

• With a traditional IRA, contributions may have received favorable tax treatment when the original owner made them.
• As a result, taxable withdrawals generally count as ordinary income for the beneficiary in the year the money is distributed.
• If you inherit a traditional IRA and take a large distribution, the added income could push some of your earnings into a higher federal tax bracket.

Note: If the original owner made nondeductible contributions, part of the account may represent after-tax money. In that case, the entire distribution may not be taxable.

A Roth IRA can produce a different result. Qualified Roth IRA distributions to beneficiaries are generally tax-free, provided the requirements are met. The five-year rule is relevant when determining whether a distribution qualifies for tax-free treatment.

But tax-free doesn't necessarily mean you can leave an inherited Roth IRA untouched indefinitely. Beneficiaries generally remain subject to distribution deadlines, although the specifics depend on the beneficiary and other circumstances.

The difference can be notable in some cases. Someone who inherits a traditional IRA may need to plan for income tax on withdrawals, while someone who inherits a Roth IRA may receive qualified distributions without owing federal income tax.

The takeaway: Find out whether the account is traditional or Roth before you estimate your tax bill. The account type you inherit can make a substantial difference in how withdrawals are taxed.

4. When do you take the money out?

Once you've sorted out your state residency, beneficiary status, and IRA type, another key question remains: When should you withdraw the money?

For many beneficiaries of traditional IRAs, timing can affect your tax bill.

For example, let's say you inherit a traditional IRA worth $300,000 and also earn a substantial salary. Taking the entire balance in one year could add a large amount of taxable income on top of your normal pay. Depending on your circumstances, some of that additional income could fall into a higher marginal federal income tax bracket.

Taking distributions over several years may help manage that. However, spreading withdrawals out isn't automatically the best strategy for everyone. You still have to comply with applicable deadlines and any annual required minimum distributions.

• For many non-spouse beneficiaries subject to the ten-year rule, the account must be fully distributed by the end of the tenth year following the original owner's death.
• Depending on when the owner died and whether required distributions had already begun, annual withdrawals may also be required during that period.

For example, if an IRA owner dies in 2026 and the beneficiary is subject to the standard ten-year rule, the account generally must be emptied by December 31, 2036. Other beneficiary categories may follow different rules.

A Roth IRA may offer a different planning opportunity because qualified withdrawals are generally tax-free, but distribution deadlines can still apply.

The key is to consider the inherited IRA alongside your other income, your expected financial needs, and the deadlines that govern the account. A withdrawal strategy that works for someone approaching retirement might not be ideal for a beneficiary in their peak earning years.

The takeaway: The amount you withdraw in a particular year can affect the income tax you ultimately owe. The challenge is balancing tax planning with the rules on how quickly you must empty the account.

Avoiding taxes on an inherited IRA: Bottom line

Inheriting an IRA doesn't necessarily mean you should take the money right away. And waiting as long as possible isn't always the best approach either.

Before you take a distribution, find out when you must empty the account and whether you have to take annual withdrawals. Then consider how a distribution would affect your taxable income in the year you receive it. Depending on your circumstances, coordinating withdrawals with your other income and expenses over several years may help mitigate the tax impact.

Also keep in mind that landing in a higher tax bracket doesn't mean all of your income is taxed at that higher rate. Federal income tax rates are marginal, so only the portion of your taxable income that falls within a higher bracket is taxed at that rate.

If the account balance is substantial, or you have questions about these or other key factors, consider consulting a tax professional before deciding. The goal is to make informed decisions that comply with the distribution rules and make sense for your finances over the entire period you'll be managing the inheritance.

Remember: This article is for general informational purposes and is not individualized tax or legal advice. Consult a qualified tax professional about your specific situation.

Related

• Inherited IRA Rules Every Beneficiary Should Know
• Why The IRS is Taking a Closer Look at Trusts
• Inheritance Tax vs Estate Tax: Who Actually Pays
• Are No-Income-Tax States Better to Live In?

The entire purpose of an emergency fund is to have cash on hand when you need it. Yet money sitting in a savings account can feel like it’s doing nothing, particularly if the interest you’re earning is failing to keep pace with inflation.

Meanwhile, stocks have proven to be excellent long-term wealth builders, vastly outperforming the return you can expect to get at the bank.

So, it’s fair to ask: Why not invest your emergency savings in a stock market index fund and be done?

You could do that. And chances are good that things would work out just fine if you did. But what if they didn’t?

Stock returns may be excellent over time. But market volatility means they don’t move in a straight line. And there's no guarantee the market will be up when an emergency rears its ugly head.

So, before you drop your entire emergency fund into the market, let’s do a deeper dive.

What an emergency fund is actually for

Remember, an emergency fund isn’t an investment. It’s insurance. Its function is to cover a job loss, an unexpected medical bill, a car repair or a broken air conditioner without pushing you into debt or into a rushed decision.

The rule of thumb is to keep the equivalent of three to six months of essential expenses in cash.

If you live in a dual-income household with two stable jobs, you might need less than that. For those with less stable incomes, such as freelancers or business owners, it might make sense to aim higher.

Whatever the number, the money has to pass three tests: it must be safe, easy to reach and worth a known amount on the day you need it.

A high-yield savings account passes all three. Deposits at FDIC-insured banks are protected up to $250,000 per depositor, per bank, per ownership category.

You can usually move the money to checking within a day or two. And $10,000 today is still $10,000 next month.

The case for investing it

It comes down to opportunity cost.

Over long stretches, a diversified stock portfolio has beaten cash by a wide margin. Savings rates often trail inflation after taxes, so idle cash can slowly lose buying power. And many emergencies never happen.

If you hold $30,000 in savings for a decade and rarely touch it, you’ve given up years of potential growth. Properly invested, it might have grown to $60,000, even $100,000 in a raging bull market.

Of course, there’s a catch. The events most likely to drain an emergency fund tend to show up at the same time stocks fall, or during a bear market.

Recessions cause layoffs. Layoffs cause emergencies. And recessions are when stock prices often drop the hardest.

During the 2007-09 financial crisis, the S&P 500 fell about 57% from its peak, and U.S. unemployment climbed to about 10%. In early 2020, stocks dropped about a third in roughly five weeks as millions of people lost their jobs.

Imagine this scenario. You put your $20,000 “emergency fund” in an S&P 500 ETF. You get laid off in a downturn, and the account is now worth $10,000.

To pay rent, you sell shares near the bottom. That locks in the loss and leaves less money to recover when the market bounces back.

Even in the absence of a market crash, investing your emergency fund can bring unwanted problems. In a regular brokerage account, selling shares that have gained value can trigger capital gains tax, so an emergency can come with an unplanned tax bill.

So, investing your emergency fund in stocks is a great idea… so long as you never actually have an emergency!

Splitting the difference

No one says you have to choose all or nothing. You can always split the difference, keeping a core first layer of one to three months of expenses in a high-yield savings account or money market fund. This is your instant-access money.

You could have a second layer on top of that in Treasury bills, short-term CDs or a short-term bond fund. Your risk here is modest. In a true emergency, you probably won’t mind paying a penalty of a couple of percent for cashing in a CD early.

Anything beyond these two layers can be invested for growth in stocks or stock funds. If an emergency outlasts the first two layers, you sell from here, ideally after the market has had time to recover.

There's no "right" size for an emergency fund. Every family is going to be different depending on their job security, number of earners, overall wealth and income, health needs, insurance coverage and a host of other factors.

A tenured college professor in a two-income home needs less cash on hand than a self-employed entrepreneur with a stay-at-home spouse and a mortgage.

Use your best judgment to figure out the best level for yourself. Just keep in mind that for an emergency fund to be effective, you have to be confident that it will actually be there when you need it most.

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A high-income earner can save diligently for decades and still face a tax problem in retirement: Most of their savings could be concentrated in accounts in which withdrawals are taxed as ordinary income, with limited flexibility to manage those taxes.

Direct Roth eligibility may have phased out years earlier.

Indexed universal life insurance, or IUL, can address part of that issue. It provides a death benefit, while its cash value could create a supplemental source of money later in life.

For people who have maxed out traditional tax-advantaged accounts and want more control of retirement income sources, IUL might deserve a closer look.

Cash value grows tax-deferred inside the policy, and the owner could later access it through withdrawals and policy loans that are generally not subject to current income tax. This only works if the contract is properly structured and stays in force.

That combination of tax-deferred growth and potentially tax-advantaged access is what differentiates IUL from other retirement savings vehicles.

LIMRA (the Life Insurance Marketing and Research Association) reported record IUL premiums in 2025, up 17% from the prior year. Growing sales do not by themselves establish that a product is appropriate for any client. Still, they show increasing interest in how permanent life insurance might fit into a modern financial plan.

High earners run out of familiar tax-advantaged space

The issue becomes more visible during peak earning years. For 2026, employees can contribute up to $24,500 to a 401(k), excluding catch-up contributions. Direct Roth IRA eligibility phases out from $153,000 to $168,000 for single filers and from $242,000 to $252,000 for married couples filing jointly.

Those limits are not an automatic reason to buy life insurance. Consider workplace plans, health savings accounts, backdoor Roth strategies, taxable investments and adequate liquid reserves first. Still, a high earner with surplus cash flow and a legitimate need for permanent insurance might have room for another layer.

Cash value can add another retirement-income layer

An IUL policy builds cash value and credits interest partly based on the performance of an external index. The money is not invested directly in that index. Caps, participation rates, spreads, guarantees and policy charges determine how much interest is credited.

Growth inside the policy is tax-deferred. The owner can later access cash through withdrawals and policy loans, potentially without current income tax if the contract is properly structured, avoids modified endowment contract status and stays in force. That access might supplement qualified-plan distributions, Roth withdrawals, taxable investments and guaranteed income from annuities.

This additional income source might help during a high-tax year, after a market decline or before tapping another retirement asset. Tax flexibility is a key argument for IUL. The policy doesn't need to replace a retirement account to contribute meaningfully.

The right buyer needs more than a high income

The strongest candidates for an IUL tend to share several characteristics:

• They are typically from ages 40 to 55 and have time to fund the policy before taking income.
• They have stable surplus cash flow after addressing other retirement priorities and liquidity needs.
• They need permanent life insurance for family, estate or business reasons.
• They understand that early surrender can be expensive, and a long-term time horizon is part of the strategy.

Someone with inconsistent income, limited reserves, a short time horizon or no insurance need likely requires a different solution. IUL might work best when both sides of the contract matter: protection for beneficiaries and carefully managed access to income for the policyowner.

Tax advantages don't remove policy risk

Loans accrue interest and reduce cash value and the death benefit. A policy that's been heavily borrowed from can lapse, potentially creating taxable income at an unfavorable time. Policy charges continue, interest-crediting terms can change, and illustrated results are not guaranteed.

Prospective policyowners should review lower crediting assumptions, changing policy terms, interrupted premiums and rising loan balances before committing.

The NAIC's life insurance illustration guidance helps frame that review. AI-enabled planning tools can quickly compare funding and loan scenarios. Still, they can't determine whether the death benefit is necessary or whether the owner can sustain the policy for decades. Regular human review and current in-force illustrations still matter.

Decide what the next dollar needs to do

For financial advisers, at the next review with a high-income earner, map the tax treatment of their existing retirement assets. Then ask where the next long-term dollar should go and what job it needs to perform.

If traditional savings options are already addressed, permanent coverage is needed and another potential source of tax-advantaged money might strengthen the income plan, compare an IUL with the available alternatives. Use conservative projections, explain the conditions plainly, and build annual reviews into the recommendation.

Life insurance is designed to protect people after a death. For the right high-income earner, a properly designed IUL policy might also support decades before that.

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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.

If you're years into an income-driven repayment plan and working toward student loan forgiveness, there is an important number you may not have been tracking: The potential tax bill at the end.

For five years, most student loan forgiveness received favorable federal tax treatment. The American Rescue Plan temporarily excluded qualifying student loan debt forgiven from 2021 through the end of 2025 from federal taxable income.

That temporary protection has now expired. For qualifying income-driven repayment forgiveness that occurs on or after January 1, 2026, the amount discharged is generally included in taxable income for federal purposes.

That doesn't mean forgiveness suddenly stopped being valuable. It does mean borrowers need to look at the entire financial picture rather than focusing only on bringing the loan balance to zero.

The good news is that for most people pursuing long-term forgiveness, this "tax bomb" should not come as a surprise. You may have years to prepare for it.

What the student loan 'tax bomb' actually means

The student loan "tax bomb" sounds more dramatic than the mechanics really are. If you have $50,000 of student loan debt forgiven, you do not suddenly owe the IRS $50,000. Instead, the forgiven amount is generally added to your taxable income for that year.

For example, suppose you earn $80,000 and $50,000 of your remaining student loan balance is forgiven through an income-driven repayment plan. Very broadly, you could be looking at income closer to $130,000 for federal tax purposes before factoring in deductions, exclusions and other parts of your return.

How much additional tax that creates depends on several things, including your filing status, other household income, deductions, credits and the tax brackets that apply in the year your debt is forgiven.

That is why I would not use a simple formula such as "forgiven balance multiplied by your tax bracket." Our tax system is progressive, and everyone's situation is different.

What matters is understanding that a large balance forgiven in a single year can create a meaningful one-time tax liability.

You may also receive a Form 1099-C reporting canceled debt after the debt is forgiven.

Not all student loan forgiveness is taxable

This is an important distinction because the 2026 change does not affect all forgiveness programs in the same way.

Public Service Loan Forgiveness (PSLF) remains federally tax-free. If you qualify for PSLF and have your remaining Direct Loan balance forgiven after completing the required qualifying payments and employment requirements, the amount forgiven is not considered income for federal tax purposes.

Certain other discharges can also qualify for tax-free treatment. Under current IRS guidance, student loan debt discharged because of death or total and permanent disability may be excluded from federal taxable income, subject to applicable IRS requirements. Certain work-related loan cancellation and repayment assistance programs can also receive favorable tax treatment.

The borrowers who need to pay the closest attention are those expecting a remaining balance to be forgiven at the end of an income-driven repayment period.

And those timelines are changing. Depending on your loans and repayment plan, forgiveness may be available after different repayment periods. The new Repayment Assistance Plan (RAP), for example, provides forgiveness of a remaining eligible balance after 30 years of qualifying payments.

So before estimating any future tax bill, make sure you know which repayment plan you are actually on, how much qualifying time you have accumulated, and when forgiveness is realistically expected.

Don't forget about state taxes

Federal taxes are only one part of the calculation.

Your state may also treat forgiven student loan debt as taxable income, and state treatment can vary considerably. Federal Student Aid specifically advises borrowers that income-driven repayment balances discharged beginning in 2026 may also result in state taxes, depending on where they live.

If you live in a state without an individual income tax, that part of the equation may be much simpler. But if your state taxes income, don't automatically assume it will treat student loan forgiveness the same way the federal government does.

This is one of those areas where I would check your state's rules as you get closer to forgiveness rather than relying on something you read several years earlier. State tax laws can change long before a borrower reaches the end of a 20-, 25- or 30-year repayment period.

High earners should run the numbers again

For higher-income borrowers, this tax change deserves even more attention.

The strategy behind income-driven forgiveness is fairly straightforward. You make payments tied to income for the required period, and if a balance remains at the end, it may be forgiven.

But if a significant amount is forgiven during a year when your income is already high, adding that canceled debt to your taxable income can make the final cost of forgiveness higher than you may have originally expected.

That doesn't automatically make forgiveness the wrong strategy.

It simply means the right comparison is no longer, "How much will I pay before my remaining balance is forgiven?"

The better question is, "How much will I pay in student loan payments plus taxes on the forgiven balance compared with paying the loan off another way?"

That distinction matters.

For some borrowers, pursuing forgiveness will still save a substantial amount of money. For others, particularly those whose incomes have increased significantly since they first entered repayment, aggressive repayment or refinancing may deserve another look.

If you are considering refinancing federal student loans, remember that refinancing with a private lender means giving up federal benefits, including income-driven repayment options and federal forgiveness programs. That decision is generally irreversible, so compare the full long-term cost before making the move.

If refinancing does make financial sense for your situation, you can compare available rates through a marketplace such as Credible rather than evaluating lenders one at a time.

One provision could reduce the tax bill: Insolvency

There is another part of the tax code that borrowers should know about, particularly those expecting a large amount of debt to be forgiven.

Canceled debt can sometimes be excluded from taxable income to the extent you were insolvent immediately before the debt was canceled.

In simple terms, insolvency generally means your total liabilities exceeded the fair market value of your total assets.

Suppose, for example, that immediately before forgiveness your liabilities exceeded your assets by $30,000, and $50,000 of student debt was canceled. Depending on your circumstances, the insolvency exclusion could potentially apply to part of that canceled debt.

This is not something I would casually estimate. The IRS looks at your financial position immediately before the cancellation, and claiming the exclusion generally involves Form 982.

If you think you may qualify, work with a tax professional who understands cancellation-of-debt income.

What to do now if you're working toward income-driven repayment forgiveness

You don't need to overhaul your repayment strategy because of a tax bill that may be years away. I recommend adding the tax calculation to your planning now.

First, confirm when you are actually eligible for forgiveness. Log into StudentAid.gov, confirm your current repayment plan, and understand how much qualifying repayment time you have accumulated. Federal repayment options have changed significantly, so don't base your planning on what your loan terms looked like several years ago.

Next, estimate what your balance could be when forgiveness occurs. The number that matters is not what you owe today. It is the projected balance that could actually be canceled.

Then estimate the potential tax. You do not need an exact number 10 years in advance. You need a reasonable range. Revisit that estimate as your income, balance, and tax laws change.

Start building a tax reserve if the potential liability is meaningful. If you expect a $10,000 or $20,000 tax obligation, setting aside money gradually over several years is far easier than finding it all at once after forgiveness.

Finally, rerun the forgiveness-versus-payoff calculation periodically. A strategy that made perfect sense when you earned $60,000 may look very different when you earn $160,000. Your income, family situation, interest rate and loan balance can all change over a repayment period that lasts decades.

Your student loan strategy should be allowed to change with them.

Forgiveness can still be valuable

The return of federal taxation on IDR forgiveness should not scare borrowers away from forgiveness. But it should change the way you calculate its value. For several years, it was easy to think about forgiveness as the finish line: Make the required payments, reach the end of the repayment period, and watch the remaining balance disappear.

Beginning in 2026, many borrowers need to add one more step: What happens to my taxes when that balance disappears?

If you are still many years away, that is actually an advantage. You have time to estimate the liability, build savings for it, monitor changes in the law and periodically ensure forgiveness still makes financial sense.

A future tax bill is much easier to handle when it has been part of the plan all along.

And with student loan rules changing as frequently as they have in recent years, I would make a habit of reviewing that plan regularly rather than assuming the strategy you chose today will remain the best one 10 or 20 years from now.

Related Content

• Student Loan Tax Traps to Avoid in 2026
• The $2,500 Tax Break for Paying Your Student Loan
• Student Loan Shake-Up: What the OBBB Means for Parent PLUS Borrowers, From a Financial Aid Expert
• Taking Out a Private Student Loan Before the Fall Tuition Bill Deadline? 5 Essential Steps Before You Sign
• Parent PLUS Caps Just Changed the Math on Paying for College: How Will You Fill the Gap?

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 rate-changing environment with persistently high prices, where you store your cash could be the difference between growing your wealth or eroding your purchasing power — to the tune of hundreds of dollars.

This is especially true if you're carrying a larger balance like $50,000. Thankfully, there are smart places to park it and earn a healthy APY while investigating other options.

Since there are no one-size-fits-all solutions, here are several common scenarios and strategies for each.

Scenario 1: I want to keep liquidity as I investigate all options

In this case, the smart bet is to open a high-yield savings account at an online bank. Online banks offer higher APYs with minimal account fees, and you can separate this $50,000 from the rest of your cash. This can be critical if you've never been in this situation.

You can find and compare some of the best high-yield savings accounts using this Bankrate tool:

Another reason high-yield savings accounts are useful is that they offer variable interest rates. This is essential right now, as the Federal Reserve will likely issue another rate hike in December, unless there's an end to the Iranian War.

CME FedWatch projects there's a high likelihood the Fed will issue a quarter-point rate hike at its December meeting. When the Fed hikes rates, it can raise the APYs on your savings account, helping you to earn more.

Of course, if you're not concerned with liquidity, better options are available.

Scenario 2: I want to earn now, without tying up money for years

$50,000 is a sweet spot because it can unlock a CD option that earns excellent rates right now: A jumbo CD. The best jumbo CD rates offer you APYs up to 4.60%, well surpassing the best high-yield savings accounts.

To demonstrate, if you were to take your $50,000 and open a one-year jumbo CD with Finworth at 4.35% APY, you'll earn $2,175.

But before you jump at this opportunity, keep these things in mind:

• Interest: Interest earned on a CD is taxed as ordinary income, so make sure to factor this in as part of your plan.
• Early withdrawal: If you need to break open your jumbo CD, you could lose months of interest. This could easily be hundreds of dollars, so only take this approach if you're confident you won't need the cash for a year.
• Maturity: Some banks will automatically renew your CD. Set a reminder on your phone a few weeks before it matures so you can explore other options.

If you don't want to put all of your eggs in one basket, here's a smart alternative.

Scenario 3: I want a mix of short- and long-term solutions

This is where a CD ladder could come in handy. With it, you don't place your $50,000 into one CD. Instead, you spread it across multiple CDs with varying maturities.

Here's an example of how this could work:

This approach lets you use short-term and long-term CDs. You'll have quick cash flow from some of your funds, allowing you to pivot in response to rising inflation. If the Fed hikes rates again, you'll also be better positioned to capitalize on higher APYs.

You'll also have some money earning a much higher rate than a HYSA. This gives you peace of mind that you're maximizing your cash without taking on risk.

You can use this Bankrate tool to find the CD terms that work for you and build your own ladder:

Balancing different strategies

Of course, if you don't need some of the money for years and don't mind risk, a smart play is to invest it in the stock market. Adding index funds tracking broad markets, such as the S&P 500, provides instant diversification and historically higher growth.

Here's a look at how you can balance savings with investing:

Ultimately, if you're looking for smart places to park $50,000 away from market volatility, you have options. The smartest approach is to devote some of your money to short-term CDs so you can earn more than a high-yield savings account, while also allocating some to index funds, where you could earn substantially more.

With an uncertain rate environment and higher inflation, these solutions help you reach your savings goals while shielding your purchasing power from future inflation.

Related content

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• 5 Best Index Funds for Long-Term Growth
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Stocks rebounded Monday on the revival of the artificial intelligence trade, as the developer of the Claude large language model and AI assistant filed for what would be the biggest initial public offering (IPO) in stock market history. Markets are also looking forward to quarterly reports from three more Magnificent 7 stocks, as well as this week's Federal Open Market Committee meeting, which begins tomorrow and concludes on Wednesday.

"AI jitters and oil prices have kept stocks off balance," E*TRADE From Morgan Stanley Managing Director Chris Larkin observes, "but this week's lineup of high-profile earnings and economic data may have the potential to push the market out of its trading range — one way or the other."

As Larkin notes, the Fed will probably hold interest rates this week, so "traders will be focused on tech earnings, especially hyperscalers Microsoft and Amazon, to gauge the strength of the AI trade as we head into year-end."

The front-month West Texas Intermediate crude oil futures contract was down 1.8% to $101.48 per barrel. WTI has risen more than 12% in October, as investors, traders and speculators continue to balance risks of escalation after midterm elections in the U.S. with improving flows from the Middle East.

Meanwhile, the yield on the 2-year Treasury was up 3.2 basis points to 4.716%, while yields on the 10-year (-0.2 bps, 4.986%) and the 30-year (-1.6 bps, 5.299%) were lower for the day.

By the closing bell, the tech-heavy Nasdaq Composite had risen 0.8% to 26,169, the broad-based S&P 500 was up 0.7% at 7,676, and the blue-chip Dow Jones Industrial Average had added 0.3% to 52,361.

What the Fed will do (and when the Fed will do it)

Like most market participants, Deutsche Bank Senior U.S. Economist Brett Ryan expects the Fed to hold the target range for the federal funds rate at 3.75% to 4.00% this week. At the same time, Ryan says dissents from a decision to hold are likely.

The economist expects Fed Chair Kevin Warsh's post-meeting press conference to focus on why the FOMC decided not to raise rates, how recent inflation data has impacted the monetary policy outlook and what, if anything, has changed about the committee's assessment of financial conditions amid recent AI-related volatility.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

"Warsh is likely to signal that recent inflation data reinforce expectations from the September meeting that further tightening will likely be needed over time," the economist concludes. "However, skipping October allows officials more time to assess trends in the data."

You can follow updates and commentary about this week's event on our October Fed meeting live blog.

Should you buy ANT stock?

Anthropic has a ticker symbol, and if everything goes according to plan, ANT will start trading on the Nasdaq next month. One analyst who covers the IPO market says it'll be the first major generative AI pure play to come to market.

So, should you buy ANT stock?

According to Kiplinger's Tom Taulli, "Investors will need to weigh Anthropic's explosive growth against its massive infrastructure spending, fierce competition, safety risk and lofty valuation before deciding whether to buy the IPO."

Listen to what the hyperscalers say

Alphabet (GOOGL, -1.1%) and fellow Mag 7 members Amazon (AMZN, +0.4%) and Microsoft (MSFT, +1.5%) will report top- and bottom-line results amid rising concern about whether we're in an AI bubble rather than an AI boom.

Stifel analysts say markets will watch consumption trends, as well as free cash flow and capex, with emphasis on Azure for Microsoft, Google Cloud Platform for Alphabet and Amazon Web Services for Amazon.

Stifel suggests Azure will top a consensus forecast for 46% to 48% year-over-year revenue growth, "driven by incremental efficiencies, ramping new data center capacity and a growing OAI (Azure OpenAI) acceleration."

The analysts note that GOOGL is on a streak of four consecutive quarters of accelerating revenue growth, supported by spiking cloud business. For its part, AMZN's sequential revenue acceleration streak is at five quarters and counting.

As Stifel notes, Amazon management has already said it won't have enough capacity in 2026 or 2027 and "demand we already have for 2028 is striking."

Meta Platforms (META, -1.9%) and Tesla (TSLA, +5.2%) posted their most recent results last week.

Apple (AAPL, -1.1%) is scheduled to report after the closing bell next Monday, November 2. Though management hasn't yet confirmed the date, Nvidia (NVDA, +2.4%) is expected to host its earnings event after the closing bell on November 18.

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Anthropic, which is a leading developer of artificial intelligence (AI) frontier models, is expected to launch its initial public offering (IPO) in November, raising up to $100 billion at a $2 trillion valuation.

This will make it the biggest IPO ever, exceeding SpaceX (SPCX), which initially raised $75 billion in its public offering earlier this year.

"I do think there will be a bit of hype and frenzy around the name, given that it will be the first major generative AI pure play to come to market," says Avery Marquez, director of Investment Strategies at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. "We have seen investors be discerning this year, but I don't think there will be a question of demand for Anthropic's story."

Still, investors will need to weigh Anthropic's explosive growth against its massive infrastructure spending, fierce competition, safety risk and lofty valuation before deciding whether to buy the IPO.

The story of Anthropic's growth machine

Dario and Daniela Amodei cofounded Anthropic in January 2021. Before this, they served as executives at OpenAI. The siblings saw an opportunity to build a company focused on AI models that emphasized safety and reliability.

During its first few years, Anthropic concentrated on research and development. Then, in March 2023, the company released Claude, a sophisticated AI chatbot. It competed with OpenAI's ChatGPT and Google's Bard (which eventually became Gemini).

Anthropic initially received less attention than its competitors, but that changed in May 2025, when the company released Claude Code. It was an instant hit with software developers. A key differentiator was the system's use of AI agents, which could handle complex development tasks, navigate software repositories, generate and modify of code, debug applications, run tests and manage changes.

Building on these capabilities, Anthropic launched Claude Cowork in early 2026. This enabled agentic capabilities across various categories, including finance, sales and legal. Cowork also included extensive security systems such as identity and access controls, auditing, usage management, and regulatory protections, including HIPAA.

As a result, Anthropic experienced a surge in demand from enterprise customers. In February 2026, the company announced that the annual run-rate for revenue was $14 billion, compared to zero three years earlier. More than 500 customers spent more than $1 million.

At the end of July, Anthropic's annualized revenue hit $65 billion and could reach $100 billion to $120 billion by the end of this year.

The risks of investing in Anthropic

While the growth is impressive, Anthropic faces major risks.

First, the company has signed agreements for at least $518 billion in AI infrastructure spending for the next decade. About 80% of these commitments are non-cancelable.

This is a huge bet that demand for AI services will keep growing at a rapid pace. But several signs suggest customers are having difficulties monetizing their investments. A survey from the Boston Consulting Group found that fewer than half of companies are generating meaningful value from AI, even as spending on the technology has nearly doubled over the past year.

It's no surprise, then, that customers are looking for more affordable models, including open-source options.

There are also safety risks. In September, Anthropic disclosed several incidents in which its AI models accessed real-world systems without authorization during cybersecurity evaluations. In one case, its Claude Mythos 5 model uploaded malicious software to a public repository, which was installed on 15 external systems. While these incidents occurred in misconfigured testing environments, they highlight the potential dangers of increasingly autonomous AI systems.

"Frontier AI still carries significant technical, governance and deployment uncertainty, so the question is whether these companies can meet public-market expectations without letting quarterly pressure outrun the systems needed to deploy safely and reliably," says Afsheen Afshar, founder and managing partner at Pilot Wave Holdings.

When is the Anthropic IPO?

On October, 26, Anthropic released its S-1 registration statement, which provided detailed financial results, risk factors and other disclosures.

While no exact date has been given yet for the offering, Securities and Exchange Commission (SEC) rules stipulate that a company must file its S-1 paperwork at least 15 days before its IPO roadshow. This suggests the Anthropic IPO will happen by mid-November

According to the filing, Anthropic plans to trade on the Nasdaq under the ticker symbol "ANT."

Should you buy the Anthropic IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. And in the "froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

As for retail investors, whether or not you buy the Anthropic IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of ANT stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.

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When people think of Roth options, most think of a Roth IRA. Even though 95% of employers offer a Roth 401(k) plan, less than 20% of employees take advantage of it.

I worked as a consultant in the retirement industry for decades and I was part of the 80% that didn't contribute to Roth in my 401(k). Almost five years into retirement, it's one of my biggest regrets.

The statistics show that, like me, most people continue to contribute pretax to their 401(k). They don't question the conventional wisdom that their tax bracket is probably higher while they're working than it will be in retirement. They take the deduction now and defer the income tax until retirement when they're likely in a lower bracket. It makes sense.

For a lot of Boomers and Gen Xers, Roth 401(k) wasn't an option they skipped — it simply wasn't available. Roth in 401(k) plans didn't exist until 2006, and most employer plans didn't add them for years after that.

As a Gen Xer, that was me: Roth didn't reach my plan until my mid-forties, when I was in my highest-earning years and wanted to reduce my taxable income as much as possible.

Now, almost five years into retirement, I wish I had given Roth 401(k) more consideration. I'm not alone in feeling this way.

Roth conversions increased 41% year-over-year as of Q1 2026, according to Fidelity, indicating that many people who previously contributed on a tax-deferred basis now want the benefits of tax-free growth.

Why the regret?

1. Paying tax on the compounding when it could have been tax-free

Reducing my taxable income while I was working helped, but it was only going to help once. Had I contributed to Roth instead, it could have grown tax-free for decades. And the income tax I'd have avoided on all that growth would have outweighed the tax I saved on the contributions themselves.

When you contribute on a pretax basis, you're not just deferring tax on what you put in, you're deferring it on everything that money earns for decades.

Take a person earning $100,000 who contributes 6% to a 401(k) and receives a 4% employer match over a 40-year career, working and retiring in Florida (no state income tax) at 65. Over those 40 years, they earn a 5% annual return.

For simplicity, this assumes a flat $100,000 salary with no raises, a 22% federal tax rate while working, and a $75,000 annual draw in retirement taxed at 15%.

Real careers and tax brackets are messier than that. The point isn't to predict your exact outcome — it's to illustrate how the tax owed on decades of compounding growth compares to the tax saved on the contribution alone. Before making the Roth versus pretax decision, it's important to run your own numbers with your tax accountant or financial adviser to see how it plays out for your specific situation.

This example also assumes the employee contributes the same dollar amount either way. The Roth contribution reduces take-home pay more because the tax is paid upfront. A pretax saver could invest the tax savings elsewhere, which would narrow the gap. But many people don't, and that's part of the point.

The company match stays pretax in both scenarios, since only about one in five plans currently offer a Roth match.

In this example, if you elect Roth contributions throughout your career, you'd get to retirement with $761,000 of income-tax-free money. You contributed, invested and paid income tax on $6,000 every year for 40 years ($240,000 in total). The other $521,000 is pure tax-free growth. Compare that to the pretax side, where the entire $1.2 million balance is taxed. It feels different, doesn't it?

2. A greater long-term average rate of return widens the gap

The example above uses a conservative 5% return. If the stock market's long-term return is higher, the difference can become more pronounced. Here's the same example: Same contributions, same 15% tax rate, using a 7% return instead of 5%.

The only thing that changed is investment performance, and by contributing to Roth the difference nearly doubled. The better you do as an investor, the more this decision is worth.

These are hypothetical examples and not representative of any specific situation. Your results will vary. The hypothetical rates of return used don't reflect the deduction of fees and charges inherent to investing.

3. Where you work and where you retire both matter

To keep the math simple, the example above assumes no state income tax. But state taxes can change the equation.

Work in a high-tax state and retire to one with no income tax, and pretax may work in your favor.

But if you flip it — work in a no-tax state and retire in one that taxes retirement income — those same pretax dollars could end up subject to both federal and state tax on the way out.

4. Pretax only means grossing up every withdrawal to get what you want

Want to withdraw $10,000 out of your pretax 401(k)? You'll have to take out $11,765 if you're in a 15% tax bracket to net the $10,000. With Roth, if you want $10,000, you withdraw $10,000.

5. Roth conversions mean writing a check you feel

You have to pay income tax regardless of whether you contribute to Roth initially or convert the assets down the road. But paycheck withholding happens automatically, before the money ever reaches your account. A conversion means writing the government a bigger check, since you're also paying tax on the earnings. And writing a check just doesn't feel the same.

6. Roth 401(k): No RMDs

With the SECURE 2.0 Act, as of 2024, original owners of a Roth 401(k) (or Roth IRA) don't have to take RMDs from that account during their lifetime.

7. Heirs inherit money and the tax

When my dad passed away in 2018, he left me some money in his traditional IRA. I was 50, still working and in some of my highest-earning years, so every required distribution added to my taxable income at the worst possible time.

Because he passed in 2018, I was able to stretch those distributions over my own lifetime. That option largely went away for non-spouse heirs beginning in 2020. Those heirs now have 10 years to empty an inherited pretax account, which means bigger distributions and bigger tax bills, often during their own highest-earning years.

When I've had to take RMDs on my dad's IRA, I've paid tax at whatever rate I happen to be in that year. Had it been Roth, those withdrawals would have been income-tax-free.

To Roth or not to Roth?

Whether you plan on "dying with zero" or leaving a legacy to your heirs, to Roth or not to Roth is something to carefully consider. And it doesn't have to be either/or — it can be both.

When you're living in retirement on a fixed budget, having some portion of your assets income-tax-free is confidence that's hard to put a number on.

I can't go back and change my 401(k) contribution elections. But if you're still working and have a Roth option sitting unused, you can. It's worth considering during annual enrollment this year.

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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.

Dear Wealth Wise: I'm 29 and trying to build retirement wealth. I have most of my assets in my Roth IRA, 401(k), and HSA: over $270k in total, with about $220k in the Roth IRA. I mostly hold individual stocks, and I'm not sure whether it makes more sense to switch to index funds and accept market-adjacent returns or stay concentrated. I don't want to lose what I've built, but I don't want to give up valuable growth this early in my retirement savings. I am ready for a "set it and forget it" portfolio, but I also have experience researching stocks, so I'm wary of going all in on index funds. — Passive Curious

Dear Passive Curious: Before we dive into your question, we first want to note how far ahead of most young investors you are. If you left your total savings of $270,000 invested and didn't save another penny, you would have $2.05 million at age 60, assuming a conservative 7% return. So, well done!

While your youth gives you more runway to experiment than older investors might have, your question is spot-on for anyone weighing the upside of stock picking against the simplicity of index funds.

Many investors prefer index funds over taking their chances with a portfolio of individual stocks. The S&P 500 index has rewarded investors with an average annual return of about 10% (or about 7% after inflation) since its inception in 1957.

In fact, Warren Buffett, one of the most successful investors of our time, agrees that everyday investors are well served by loading up on index funds over the long term.

In his 2013 Berkshire Hathaway shareholder letter, Buffett said, "The goal of the non-professional should not be to pick winners — neither he nor his 'helpers' can do that — but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal."

At 29, you might easily have a 30-year window to build wealth. Will a shift to index funds mean selling your goals short? Here’s what the experts have to say.

It’s a matter of how much risk you want to take on

The good thing about being 29 is that you’re young enough to take on risk in your portfolio. But the question you want to ask, says Danielle Arlotta, CFP and founder at Sole Financial, is "Can you continue to pick stocks for the rest of your life?"

"I’m sure that you’ve heard most active managers underperform their benchmark," Arlotta says. "It’s good that you’ve done your research and know what you’re buying. It sounds like you have been able to outperform the market as well. But one bad pick and you can also suffer significant losses."

As Arlotta explains, indexing works because it gives you instant diversification, which helps reduce portfolio volatility. As you get older and your risk tolerance starts to wane, it's important to recognize that benefit.

Keep in mind that broad indices like the S&P 500 are market-cap weighted, meaning that just a few mega-cap tech giants (like the Magnificent 7) make up a big slice of the fund. If you want true broad-market diversification, consider pairing an S&P fund with an international index, for example.

Holding individual stocks isn’t gambling

You’ll often hear that index investing is safer than holding stock individually. Vincent Garaventa, CFP and vice president at Bauman Wealth Advisors, says that has some validity. But not every individual stock holding is speculative.

A well-researched, diversified portfolio may not be risky off the bat. The key, according to Garaventa, is to monitor your investments and rebalance as needed over time. You don’t want to remain too concentrated in a single company or market sector, so you’ll need to actively manage your portfolio.

"If done in the right amounts with the right portion of the portfolio," Garaventa explains, "there can be value for some diligent, disciplined investors in mixing in individual stocks or more targeted, themed investment funds."

Consider a hybrid approach: The core-satellite strategy

You may have the time and energy to follow individual stocks now, including the due diligence of reading 10-K reports and listening to earnings calls. But if you start a family or your work intensifies, index funds may look far more attractive. Arlotta says there’s nothing wrong with shifting to a "set it and forget it" strategy, but it doesn’t have to be all or nothing.

"Since you already have a majority of individual stocks, you can allocate all future contributions to index funds and rebalance when necessary," she says.

Arlotta's solution is easy to manage and avoids selling your stock positions. But there's another approach if you want to be more hands-on.

Garaventa suggests a core-satellite strategy, where the "core" of your portfolio consists of stable index funds and the "satellite" holdings can aim to beat the market.

"You siphon off a smaller portion of your portfolio and allocate it to your higher-risk investments, like individual security selection, and then run the core of your portfolio in a variety of index funds in a set it and forget it type of plan," he says. "This is a great way to balance the profit potential of individual stock selection with the high probability of index investing."

Advisers typically suggest that investors following the core-satellite strategy devote 80% or 90% to the core index fund portfolio and the remaining 20% or 10% to stocks. Many advisers recommend that no individual stock make up more than 5% of the portfolio.

Garaventa says it’s also important to consider the rate of return your plan needs to meet your goals.

"Sometimes that rate of return may be lower than one might anticipate, and investors may decide to use a higher-probability, index-only strategy where they’re not seeking significant outperformance beyond the benchmark because they’ve run the numbers and understand that their plan doesn’t require them to outperform the index," he says.

Of course, Garaventa acknowledges that most investors are wired to want higher returns, even if those returns aren’t needed to cover their future spending needs. It’s less about greed than ambition.

Plus, a 29-year-old investor doesn’t know what the future holds in terms of career growth, inflation, and AI-related disruption. Having more money than less only puts you in a stronger position to manage whatever the future holds.

At the same time, Garaventa says, "It’s important to consider the drawbacks and the higher risk. In my view, if you don’t want to leave individual stock selection behind, there’s value in doing both, as long as you do it in portions that are reasonable for your plan."

Keep in mind that there are tax ramifications for the location (or type of account) where you've stashed your funds. On the plus side, you can reallocate the $220,000 in your Roth IRA without a tax hit. That would not be the case if those funds were held in a taxable brokerage account. But if one of your stocks suffers a permanent loss in your Roth account, you can't harvest tax losses.

You’ve already won the hardest part of the early wealth-building game. Moving into index funds isn’t conceding defeat — it’s building in your lead so you can spend less time managing your money and more time living your life.

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.

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To help you understand what's going on in the economy, business and politics and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts(Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Less than two weeks until the midterms and the Democrats are on pace for notable gains. The party is on the cusp of winning one chamber of Congress, and possibly both, if current trends hold.

President Trump’s policies are on the ballot, as he himself said. Unfortunately for him, his low approval ratings (south of 40%) have GOPers in battleground districts and states keeping him at arm’s length. Voters, overall, are in a sour mood, amid the Iran war, high fuel prices, trade wars, stubborn inflation, etc., and many place the blame on the party in power.

While the party out of power usually makes gains in midterm elections, we expect Democrats to do better than the historical norm. Democratic voter enthusiasm is high, though not always for individual candidates. Rather, those voters are eager to put up a roadblock against Trump’s policies.

Turnout also may be an issue for Republicans with the president not on the ballot. Republicans do have a big money advantage and are spending heavily now, with these midterms shaping up to be the most expensive in history. The GOP’s cash advantage could tip the scale its way, but probably isn’t enough.

Democrats are on track to win the House, with gains of 15 to 25 seats, which would give the party a majority similar to the one it won in the 2018 midterms. Political shifts have nearly neutralized the GOP’s redistricting advantage and taken one-time pickup opportunities, including some majority-Latino districts in Texas, out of contention. The effort may net them a handful of seats at most. Meanwhile, Republican spending is picking up in usually safe red districts, a sign that the party feels pressure to shore up potential political vulnerabilities.

The Senate is a bigger question. Democrats need a net gain of four seats, a tall order. And they are running in more competitive races than Republicans are. But races in GOP-held Alaska, Iowa, Kansas, Maine, Ohio and Texas are unusually tight, with Democratic candidates polling ahead or about even in each. Dems are also likely to flip a GOP-held seat in North Carolina and hang on to seats in battlegrounds Georgia and New Hampshire.

Republicans’ best shot at flipping a Democrat-held seat is Michigan, as the race is extremely tight. Winning there would significantly help the GOP retain the Senate.

Overall, Democrats hold the slightest of edges to capture the Senate. Whichever party wins, the margin of their majority will be slim, only a seat or two. If the GOP loses even one chamber, Trump’s legislative agenda would falter, unless he decides to strike deals with Democrats. But his working relationship with the party is almost nonexistent, and Dems are in no mood to change that. If they win the Senate, Trump’s cabinet and judicial nominees will also face long odds.

This first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Spend two weeks in Spain and you may end up believing that living costs are less than what they are in the U.S.

A cup of coffee is cheaper. Dinner is cheaper. Apartments are cheaper. You begin to wonder how far your retirement budget might stretch in Valencia.

But there's a problem with that. Tourists don't pay a month's rent. They don't buy groceries every week, insure a home, pay utilities or local taxes. The cost of living varies enormously from one Spanish city to another.

The mistake is assuming that what you spend on vacation is a useful indicator of what you'll spend as a resident.

A vacation is not a household budget

Consider Benicàssim, a beach town in the Castellón province about 50 miles north of Valencia.

It is a popular vacation destination, and many visitors browse real estate listings before they go home.

(For dollars, use an exchange rate of $1.16 per euro.) A two-bedroom apartment might cost €120 a night, and a lunch of a bocadillo, a soft drink and an ice cream will cost around €12 a head. A three-course dinner with wine can be expected to run about €40.

I drove an electric car during my visit there, so instead of using my own transportation costs, I substituted the approximate cost of a midsize rental car from Valencia airport, including fuel and parking.

For two people, the resulting vacation day looked like this:

Now, put the same couple in Valencia, but as residents rather than visitors.

A midrange two-bedroom apartment, utilities, internet, groceries and public transportation come to about €2,520 a month, or €84 a day. Add occasional restaurant meals and other expenses, and that gap narrows.

The vacation budget also contains a cost that disappears when you become a resident: Nightly accommodations. A long-term rental in a less expensive location can dramatically reduce the daily cost of living.

There are other expenses that don't come into play on vacation: Health insurance, home insurance, professional fees, taxes and the costs of maintaining a household.

There is no single cost of living in Spain

The useful question isn't "How much does it cost to live in Spain?" It's "How much would it cost to live the way I want to live in the Spanish city of my choice?"

Consider the same hypothetical household across five cities — a retired couple renting a midrange two-bedroom apartment, without a car or school fees. These are monthly estimates for rent, utilities, groceries, public transportation and internet. They exclude eating out, leisure, health insurance and taxes.

* Dollar figures use an exchange rate of $1.16 per euro. Costs exclude eating out, leisure, health insurance and tax

The striking number isn't the difference in the grocery bill. It's the difference in rent.

The same basic household budget costs about €1,145 more each month in Madrid than in Alicante — nearly €14,000 a year — largely because of housing.

These aren't necessarily trade-offs between an attractive city and somewhere you'd never want to live. Alicante and Málaga both have international airports and major medical facilities. Valencia has excellent public transportation and a large international community.

Go further down the list, and the numbers can fall again. Granada and Badajoz, for example, can offer substantially lower housing costs than Madrid or Barcelona. The table also holds lifestyle constant at a midrange level. Change that assumption, and the totals move substantially.

A useful exercise before moving is to take your last 12 months of housing, utilities, groceries and transportation costs, divide that number by 12, and compare it with the city you're considering. Then, add the expenses you would incur in Spain but not necessarily at home.

The expenses tourists don't see

Healthcare is one area in which Americans moving to Spain can see significant savings, particularly if they're accustomed to paying U.S. private-insurance premiums. Private health insurance is required for some residency applicants, and premiums vary considerably according to age, location, medical history and coverage.

For example, 2026 quotes obtained for policies meeting Spanish immigration requirements included:

Those are examples, not universal prices. Older applicants, people with medical conditions and people seeking broader coverage can face substantially different premiums.

Utilities are not necessarily cheaper than in the U.S., and older Spanish buildings might have limited insulation or inefficient heating and cooling. A January heating bill in Madrid is something a July visitor is unlikely to factor into a budget.

Transportation matters, too. A couple who can live comfortably without a car can save substantially compared with one that needs to own, insure, fuel and park a vehicle.

Then there are taxes. Spain generally taxes residents on worldwide income, while Americans continue to have U.S. filing obligations. Tax rules also vary among Spain's autonomous communities, including rules affecting wealth and inheritance.

Someone moving to Spain for employment might also qualify for a special tax regime known as the Beckham Law. Eligibility is limited, and retirees generally won't qualify, but employees transferring to Spain (or some remote workers) should have a specialist determine whether it applies.

Income matters as much as expenses

Spain can feel inexpensive to an American earning or receiving U.S.-level income while feeling expensive to someone living on a Spanish salary.

Spain's average gross annual salary was €29,540 in 2024, according to the Instituto Nacional de Estadística. The median was €24,497, while the most common salary was €16,520.

That doesn't mean Americans moving to Spain are automatically wealthy. It means the same restaurant bill, rent payment or utility charge can represent very different proportions of household income.

It also helps explain why a place can seem inexpensive to a visitor but feel expensive to a resident.

If your income comes from a U.S. pension, Social Security, investments or a remote U.S. job, compare that income with your projected Spanish expenses, then model the tax consequences.

Don't forget the currency

The Alicante couple's expenses are €2,295 a month whether the dollar rises or falls.

At an exchange rate of $1.16 to the euro, that's about $2,660. At $1.03, the same €2,295 would cost about $2,364.

Nothing in Alicante has changed; only the exchange rate has.

Over a long retirement, currency movements can materially affect a dollar-based household budget. Anyone relying primarily on U.S.-dollar income should stress-test the budget against an unfavorable exchange rate move rather than assuming today's rate will persist.

Budget for the year, not the month

A monthly budget is only a starting point. Some expenses arrive once a year: Property taxes, insurance renewals, professional fees and perhaps a flight home. Others might arrive only once, such as visa and legal costs, deposits, shipping, furnishing an unfurnished rental or buying a car.

A reasonable approach is to build a full 12-month budget, then add a separate contingency reserve. Stress-test it against higher utilities, an unfavorable currency move or an unexpected trip back to the U.S.

Turn your vacation into a scouting trip

A vacation can tell you whether you like Spain. A scouting trip can tell you whether you can afford to live there.

Book accommodations in a residential neighborhood in your price range. Visit a supermarket and do a real grocery purchase. Use public transportation. Price rental car rates.

Look at apartments. Check the neighborhoods and how far they are from supermarkets, medical care and public transportation.

Talk to professionals before you make the move. An immigration lawyer can explain which residency route applies to you. A cross-border tax adviser can model your tax situation under Spanish and U.S. rules. Give each city at least several days.

If a coastal town is on your shortlist, consider returning in winter. A resort that feels perfect in June might look very different in January.

The budget that matters

Spain might indeed cost less, but the size of the saving depends on where you live and how you live. The vacation tells you what coffee, dinner and an apartment cost for a few days; the real budget tells you what the rest of your life will cost.

Moving to Spain has managed more than 700 relocations from the U.S. and U.K. since 2017. You can use our calculator to compare the cost of living across Spain.

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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.

When I ask pre-retirees with large 401(k)s how they plan to handle the taxes on those accounts, I usually hear some version of the same answer: "We'll wait until we retire. Our income will drop, and we'll be in a lower bracket."

However, "What will my tax rate be the year after I stop working?" is the wrong focus for a household with $2 million or more in pre-tax savings.

It's far more useful to consider what you and your spouse, and eventually your children, may pay in taxes across all the years that money will be withdrawn.

Your deduction today is a decision about decades

Deferring taxes while you work can make sense, and today's deduction is a real benefit.

But a traditional 401(k) or IRA isn't entirely yours to spend. Every dollar that comes out is generally taxed as ordinary income, and the balance that will eventually be taxed keeps growing along with your investments.

At a hypothetical 6% annual return, $2 million doubles to roughly $4 million in about 12 years. That growth is good news, but it also means the pool of income you'll eventually pay tax on may be much larger than the one you're looking at today.

You also won't have full control over when that income shows up. Required minimum distributions (RMDs) generally begin at 73, or 75 if you were born in 1960 or later, and they're calculated from your pre-tax balance whether you need the money or not.

Where 'lower later' tends to break down

Retirement can open a window of lower-income years. But for large pre-tax savers, that window is often shorter than expected.

Income stacks. RMDs add taxable income. Higher income can make up to 85% of your Social Security benefits taxable. It can also trigger Medicare IRMAA surcharges on Part B and Part D premiums, which are based on your tax return from two years earlier.

Market declines leave fewer choices. A downturn strains any retirement portfolio. But if all of your savings are pre-tax, every withdrawal you take to cover spending also adds taxable income. Roth savings don't protect you from market losses, but they give you another account to draw from without raising your tax bill.

A surviving spouse files alone. After one spouse dies, the survivor generally files as a single taxpayer. Household income often doesn't fall by much, especially if the survivor inherits the IRAs, but the tax brackets are roughly half as wide.

Your children inherit the tax bill, too. Most non-spouse beneficiaries must empty an inherited IRA within 10 years, according to IRS Publication 590-B. Those withdrawals are generally taxable, and for many adult children they land during their own peak earning years. Inherited Roth IRAs have distribution rules too, but qualified withdrawals can be tax-free.

None of these factors makes a Roth conversion the right move on its own. But together, they're the reason "we'll be in a lower bracket" isn't the same as "we'll pay less."

What paying tax now can buy, and what it costs

A Roth conversion doesn't avoid tax. You recognize income today and move that amount into a Roth account, where future growth may be withdrawn tax-free if you meet the IRS qualified-distribution rules.

In return, you get more control. A smaller pre-tax balance can mean smaller RMDs later. Qualified Roth withdrawals aren't counted in gross income, so they generally don't increase the taxable portion of Social Security or the income Medicare uses to set IRMAA. And as the original owner of a Roth IRA, you aren't required to take distributions from it during your lifetime.

The costs are just as real. A conversion raises this year's tax bill and can push you into a higher bracket or trigger higher Medicare premiums two years later. Paying the tax from savings outside your IRA uses money you could otherwise keep invested. A conversion can't be undone. And if your future tax rate really is lower, waiting may cost less.

So the real decision is when to recognize income, and whether paying some tax now may lower what your household pays over both spouses' lifetimes.

How to test the assumption

If you're within 10 years of retirement or recently retired, these steps can show whether waiting is really your cheapest path.

1. Sort your savings by tax treatment. List pre-tax 401(k)s and IRAs separately from Roth and taxable accounts. Many couples I work with are surprised by how much of their net worth carries a future tax bill.

2. Project income, not just a rate. Estimate what RMDs may look like alongside Social Security, pensions and planned withdrawals. The question is how much income will land on your return each year, and in which years.

3. Plan for both spouses, and your heirs. Run the numbers for the years after one spouse is gone and for what your children would receive. Those are the years a pre-tax-heavy plan is most likely to cost more.

4. Convert in pieces. A conversion plan doesn't mean moving an entire account in one year. Many households convert enough to use available room in a chosen bracket, then pause in years with a bonus, a business sale or a large capital gain.

5. Line up the tax payment first. Decide how you'll pay the tax, and adjust withholding or estimated payments before you convert. Your tax professional can help you check the effect on Medicare premiums and state taxes.

Make waiting a choice

Waiting until retirement to convert may still be the right answer for you. But it should be a conclusion you reach after comparing your options over both spouses' lifetimes, not a default you accept because it's what most people do.

Every pre-tax dollar will be taxed at some point. You have the most say over when that happens in the years before RMDs and other retirement income begin to stack up.

Projections depend on assumptions about returns, tax law and your circumstances, and they cannot guarantee a lower tax bill. The 6% return above is hypothetical and does not represent any specific investment.

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• The Retirement Move That's Quietly Taxing Your Social Security to the Max (and How Early Roth Conversions Can Help)
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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.

In Sir Terry Pratchett's 1993 Discworld novel "Men at Arms," Captain Samuel Vimes laid out his grand economic theory: a rich man spends $50 on a pair of good leather boots that last ten years. A poor man, who can only afford $10 cardboard-soled boots, has to replace them every year.

After ten years, the rich man still has his expensive boots and dry feet. But the poor man has spent $100 and still has wet feet. As Vimes noted with characteristic cynicism, "The reason that the rich were so rich…was because they managed to spend less money."

Retirees on a fixed income face similar traps with their income taxes.

For instance, maxing out traditional 401(k)s and IRAs to save on taxes during your working years feels like a sensible, frugal choice. But deferring taxes without a plan is the financial equivalent of buying cardboard-soled boots — it gives temporary relief today, only to push you into higher federal tax brackets tomorrow.

The good news? You don't need a fortune in cash to keep your feet dry. You just need to know how to patch your boots in retirement.

How the "Boots Rule" of retirement tax planning works

The "boots rule" of retirement tax planning acknowledges a simple reality: most retirees don't have wads of cash hanging around.

As Sam Vimes alluded to in Discworld, everyone would buy durable, high-quality boots if they could afford the upfront cost — or, put another way, retirees would make the "perfect" financial move if circumstances allowed.

Nowhere is this clearer than in traditional retirement accounts. During your working years, deferring taxes offers an immediate, affordable benefit: get your employer's match, deduct your contributions today, then pay the taxes later.

However, deferring taxes means deferring them on decades of compound growth, creating a mounting tax liability down the road.

Then, when standard financial advice tells you to "just convert your 401(k) to a Roth IRA today," it ignores the immediate, out-of-pocket tax bill that conversion triggers. Just like the worker was forced to keep buying cheap boots, many retirees stay in tax-deferred accounts because they lack the upfront cash needed to buy their way into tax-free growth.

To overcome this, you can become a financial cobbler. Rather than paying a big upfront tax bill all at once, you can patch your financial boots on a modest budget using three core levers:

• Smart timing. Withdrawing money from specific account types during "low-income gap years" (the window between career retirement and when Social Security or required distributions begin) to minimize tax exposure.
• Bracket management. Intentionally filling lower federal income tax brackets (like 10% or 12%) without accidentally spilling into higher marginal tiers.
• Account sequencing. Choosing the order in which you spend down your taxable, tax-deferred, and tax-free accounts to prevent artificial income spikes later in life.

Coordinating these three levers creates a personalized "repair strategy" that systematically plugs your tax leaks year by year using dollars you already have. This can help protect your retirement portfolio against unoptimized RMD payments, higher taxes on Social Security benefits, expensive Medicare surcharges, and wasted charitable deductions.

Four "leaks" to plug in your retirement dollars

Without proactive planning, four major tax traps act as the "cardboard soles" of retirement — quietly draining your portfolio year after year. Here is how to fix each leak using low-cost levers:

1. Required minimum distributions (RMDs). Starting between ages 73 and 75, mandatory pre-tax withdrawals from traditional IRAs and 401(k)s force taxable income into your bank account, pushing you into higher brackets whether you need the cash or not.

The "shoe repair": Use smart timing to execute targeted "micro-conversions" during your gap years. Moving smaller IRA amounts — maybe $1,000 annually — from a traditional IRA to a Roth systematically chips away at future forced RMDs (since Roths aren't subject to them). Roth distributions are also not taxable when withdrawn.

See also: 6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)

Plus, by only converting small amounts, you're less likely to push yourself into a higher marginal federal tax bracket. This type of bracket management may keep the federal tax on those annual Roth conversions as low as $100 to $220 per year (assuming a 10% to 22% marginal tax bracket rate).

2. The Social Security "tax torpedo." Unmanaged IRA withdrawals stack directly on top of your Social Security benefits. This triggers a compounding formula that can tax up to 85% of your Social Security income.

The "shoe repair": Blend tax-free Roth withdrawals or health savings account (HSA) funds to cover discretionary spending spikes (like home repairs or travel). Keeping ordinary income below the threshold limits helps protect your Social Security from taxation.

You can also draw down taxable brokerage accounts up to the 0% long-term capital gains tax threshold to fulfill your cash needs without raising your taxable baseline (or, as Kiplinger reported, utilize tax-loss harvesting to lower your tax bill).

3. Medicare IRMAA surcharges. One extra dollar of retirement income can cost you thousands. For instance, crossing an income-related monthly adjustment amount (IRMAA) threshold triggers automatic, high-cost monthly premium hikes on Medicare Parts B and D two years later.

The "shoe repair": Instead of draining pre-tax accounts first, sequence your annual withdrawals across three buckets: taxable, tax-deferred, and tax-free. Blending these sources keeps your modified adjusted gross income (MAGI) low, potentially helping your retirement income steer clear of IRMAA cliff edges. For more information on the three-bucket model, check out Kiplinger's report, The 40-Year Retirement Rule.

4. The RMD legacy and charitable waste. Donating cash directly from your checking account overlooks significant tax savings once you reach RMD age (and even a little before that).

The "shoe repair": If you are age 70½ or older, use a qualified charitable distribution (QCD) to transfer funds directly from an IRA to a qualifying charity (up to $111,000 per individual). This satisfies required distributions without adding a single dollar to your taxable income.

But if you want to donate outside an IRA, you can still get a tax advantage. Starting in 2026, the new charitable deduction for standard filers allows up to $1,000 in tax savings per individual on direct cash contributions.

Comparing your options side-by-side

To help evaluate your options, the breakdown below contrasts sticking with default standard tax-deferred accounts against a low-cost "boot repair" strategy.

The bottom line: Keeping your feet dry

Navigating taxes in retirement isn't about finding a magic bullet (or a magic shoe). As Sam Vimes realized, the real challenge is that short-term financial constraints often force choices that drain long-term wealth.

You don't need $5,000,000 sitting in a bank account to protect your portfolio from future tax hikes, Medicare surcharges, or mandatory distribution cliffs.

By making small, deliberate adjustments — filling low tax brackets, utilizing gap years, and sequencing your withdrawals — you can patch your financial boots year by year using the money you already have. But financial strategy is highly personalized, and no one size fits all.

So take a look at your current account mix today. Identify whether your savings sit primarily in pre-tax accounts, and map out your income gap between retirement and forced RMD age based on your specific financial circumstances.

A few simple patches could help to keep your tax bill more predictable, your income intact, and your financial feet dry for decades to come.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

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"I'm self-funded." I hear those two words from almost every successful retiree I meet, and I understand the instinct.

Nobody wants to spend their retirement thinking about nursing homes or memory loss.

But after 40 years of planning for retirees, I can tell you the real question was never whether you can pay for long-term care. It's what happens to your spouse and your children while you do.

What self-funding actually costs

Here's the math most people never run. Say a care need costs $10,000 a month, a realistic figure for assisted living or a home health aide today. That money typically comes out of a traditional IRA that hasn't been taxed yet.

To walk away with $10,000 after taxes, you might need to withdraw $16,000 to $18,000. Your income jumps, your tax bracket can shift, and your Medicare premiums rise with it.

Then there's timing. Care doesn't wait for a good market. If a health event hits during a downturn, you're selling investments at the worst possible moment, not because it's smart, but because the bills don't stop.

When adult children are managing the finances during a crisis, they don't always make calm decisions. I've sat across the table from families quietly watching an inheritance disappear, arguing about whether Mom "really needs" a higher level of care. That's not a position any parent wants to put their kids in.

What changed one couple's mind

Let's consider a scenario with a couple I'll call Richard and Diane, a composite of a pattern I see constantly.

He's 67 and retiring, she's 66, and for three years, a couple like them tell me the same thing every retiree tells me: "We're self-funded." Large IRA, strong financial plan, long-term care nowhere on the radar.

What changes minds like theirs isn't a spreadsheet. It's Diane watching her own father need care. He had the money to pay for professional help and refused to spend it, so the calls went to his children instead.

Diane stepped up, and she saw firsthand what that looks like: The physical demands, the disruption to her own family, the exhaustion.

Her conclusion, one I hear versions of constantly: "There is no way I'm putting my kids through that."

That's the moment long-term care planning stops being a financial exercise and becomes something personal.

What Medicare will and won't cover

One of the biggest misconceptions I run into is that "Medicare will handle this." It won't, at least not the way people expect. Medicare might pay for a stay in a skilled nursing facility following a hospitalization, but that coverage runs out fast.

Around day 20 or 21, once care shifts from skilled to custodial, Medicare typically steps back, and the bill lands on you.

For a progressive condition such as dementia that requires years of care, Medicare offers very little.

The plan this structure solves for

Say Richard and Diane have a large IRA sitting untaxed, and Richard is approaching the age at which required minimum distributions (RMDs) would start. A common structure here is a custodian-to-custodian transfer, for example $280,000, from that IRA into a new IRA held at an insurance company.

That money funds a long-term care life insurance hybrid policy over 10 years, with the carrier adding roughly $65,000 in interest, bringing the total to about $345,000, distributed in equal annual pieces.

The policy would give them a current monthly benefit of slightly more than $6,000 for home healthcare, assisted living or nursing home care, available immediately if needed. That benefit typically increases 3% a year for two decades, so by the time they're in their late 80s, it has roughly doubled.

The benefit is unlimited in duration and paid out completely tax-free. Each spouse's benefit is entirely separate, so one spouse's claim never reduces what's available to the other. If neither of them ever needs care, there's a death benefit for their heirs.

There's a second benefit most people miss: The annual transfer from the IRA counts toward Richard's required minimum distribution once he turns 73, so a decision he had to make anyway now does double duty.

In this short video, I break down how such a structure plays out over a decade, RMDs included, if you'd like to see the numbers visually.

None of this was available to them by accident. Long-term care insurance requires underwriting, and Richard and Diane could still qualify because they had this conversation while they were healthy. Wait until a diagnosis arrives, and you might not qualify at all.

Wait five years because you're not ready to think about it, and the policy will likely cost more, with no guarantee you'll still be insurable. Most people I meet after a health event no longer have that option.

I want to be straightforward: A policy such as this doesn't cover every dollar of every care scenario, and costs will keep rising. But having $10,000 or $12,000 a month arriving tax-free changes the equation. Your children aren't scrambling for cash, and your surviving spouse isn't draining their own resources.

There's no investment strategy that replicates that kind of advantage. You can't self-fund an unlimited benefit. The math doesn't work.

Three steps to take now

1. Run the real numbers on what self-funding a $10,000-a-month care need would cost you in taxes and IRMAA surcharges, not just the sticker price.

2. If you're in your 60s and in reasonably good health, get a hybrid long-term care quote now. Underwriting only gets harder from here.

3. Talk to your spouse and adult children about who would provide care if no plan existed and whether that's a role you want them in.

You don't put a long-term care plan in place for yourself. You put it in place for the people who love you enough to show up when things get hard, so that showing up never becomes their full-time job.

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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.

Is 2027 your year to retire, or should you prepare a little more and work another year? That may be the question running through your mind as we round out 2026. After all, it's been pretty tumultuous. Inflation is up 3.7%, gas is over $4 a gallon and the stock market has been volatile. At the same time, 401(k) balances are at record highs and there are more 401(k) millionaires than ever before.

If you have been doing your job and saving, you may be thinking you're ready. You've got the cash and the means, so why not go for it? It turns out there's a lot more to it than the balance in your retirement accounts.

"It's a conversation we're having a lot right now with consumer sentiment so low and what's happening out in the world," said Kelli Smith, a financial planner at Edelman Financial Engines. "Can you really afford to retire next year, and how do you feel about it?"

To help you decide, we've created a choose-your-own-path type guide. Read on to see which path may be best for you.

Retire in 2027? Work One More Year?

Retire in 2027 if you know exactly what your retirement expenses will be each month: If retirement is only months away, a general idea of your monthly spending isn't enough; you should know exactly how much you'll spend and have a strategy. "Is your plan thorough?" says Smith. "Can it support your lifestyle, healthcare and income taxes in retirement?"

Work one more year if you don't have a retirement budget: If you're going off a rough estimate or plan to wing it, work one more year and create a detailed budget. To be extra ready: Smith says to follow that budget the year you're still working. You'll see if that's the right amount. Plus, it gives you a chance to save more.

Retire in 2027 if you're comfortable with the amount you saved: Most Americans think they need over $1 million to live comfortably in retirement, but that varies based on your unique situation. Some need more and some less. Whatever your number, once you reach it, a major retirement hurdle is gone.

Work one more year if you are unsure about your number: If you are feeling a little bit unsure about your retirement balance, working one more year can help build up your confidence. It's an additional twelve months to max out your retirement accounts, pay down any high-interest debt and save more. "A penny saved is a penny earned," says Smith. "Use the year to feel more comfortable."

Retire in 2027 if you have a withdrawal strategy: Do you know how much you plan to withdraw regularly, and does it account for inflation and any market downturns, particularly early in retirement? If you can answer yes, then it's another aspect of retirement readiness you can check off. A tax-smart plan for when and how much you withdraw in retirement will ensure your money lasts and give you permission to spend.

Work one more year if you plan to figure it out as you go: If you don't have a plan for using your money in retirement, another year may benefit you. Withdrawing as you go can lead to running out of money prematurely. That's particularly true during market downturns. To help build a strategy, check out our rules series, including the 4% rule, the bucket approach, guardrails and the pay yourself first strategy.

Retire in 2027 if you know what you'll do with your free time: Retirement isn't only about your finances; it's about your emotional health. Happy retirees typically have a passion that gives them a purpose and a sense of community. It can be volunteer work, a part-time job or spending time with friends and family. Whatever it is, if you know what your retirement passion will be, or at least have a list to try, it's a good sign you're ready to retire.

"It comes down to defining a lifestyle, not a number," says Michele Havens, head of U.S. wealth management at BMO. "We ask clients to think about their value and purpose more than their savings."

Work one more year if you don't know what you'll do in retirement: You may know you don't want to work anymore, but if you haven't really thought about what you'll do once you retire, take the time to ponder it. Spend one more year working and map out what retirement will look like for you. Not only the big trips and hobbies, but the day-to-day activities. What does a regular Tuesday look like?

Take your time with the choice

Deciding between 2027 and working one more year doesn't have to be an all-or-nothing choice you make today. Use the coming months to hone your plan, build your confidence and map out what life actually looks like after work. When the financial and emotional pieces align, you'll know it's time.

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While eating Thanksgiving dinner with loved ones is a meaningful holiday tradition, gathering and preparing all the dishes has become more expensive. With grocery prices creeping even higher this year, many households are looking for ways to save on their favorite Thanksgiving dishes this holiday season.

Several major retailers have responded to this by offering Thanksgiving meal bundles that can feed an entire family for less than $50.

These deals typically include items like a turkey, potatoes, stuffing, vegetables and other holiday staples at a discounted price. Some retailers advertise meals for as little as $4 or $5 per serving, making it easier to host Thanksgiving without spending hundreds of dollars at the grocery store.

But not all holiday meal deals offer the same value. Some require additional ingredients, while others include larger turkeys, desserts or ready-to-heat dishes. Before filling your cart, it's worth comparing what's included and how much you'll actually spend.

Which retailer offers the most affordable Thanksgiving dinner?

The retailers that offer the most affordable Thanksgiving dinner options tend to offer bundled shopping lists that you can add to your cart with all the basic main and side dishes for a traditional Thanksgiving dinner.

This is a convenient way to gather everything you need in one place and stay within your budget. When comparing options, keep in mind that the amount of food and preparation required can vary considerably.

This year, Lidl offers the cheapest Thanksgiving meal per person at $3.59, but it’s not too far off from Aldi's deal at less than $3.90 per person. However, Aldi includes a larger 16-pound turkey compared with Lidl's 14-pound turkey and doesn't require a loyalty membership.

Wegmans and Kroger also offer meals for less than $5 per person, while Target's $30 dinner is an affordable option for smaller gatherings of six. Winn-Dixie has a traditional Thanksgiving meal for $38.90.

For shoppers looking to spend less time in the kitchen, several retailers offer prepared holiday meals. Winn-Dixie has a heat-and-serve option, while Publix's prepared dinners start around $70 for eight people.

Sam's Club offers a larger spread serving up to 16 for approximately $160. The Honey Baked Ham Company also sells fully cooked turkey and ham dinners with ready-to-heat sides, with prices varying by package.

What Thanksgiving meal deals might leave out

While a Thanksgiving meal deal for under $50 may sound like a great value, the advertised price may not reflect everything you'll spend.

Retailers like Aldi, Lidl and Kroger offer discounted ingredients for traditional holiday meals, but their shopping lists may leave out essentials such as milk, butter, eggs, cooking oil and seasonings. These extras can add up quickly, especially if you're cooking from scratch or need larger portions to feed more guests.

Some deals also require shoppers to purchase specific store brands or package sizes to get the advertised price. Prices and availability can vary by location, so your final grocery bill may be higher than expected.

Before shopping, check whether a loyalty membership is required. Lidl's Thanksgiving deal requires a free Lidl Plus account, while warehouse clubs like Sam's Club and Costco charge an annual membership fee.

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• Walmart and Sam's Club Just Launched a $120 Membership Deal Ahead of the Holidays

For 30 or 40 years, the job is simple: Save more, invest it, let it grow, repeat. Then you retire, and almost everything about how your money behaves changes at once. The habits that built the nest egg are not the habits that manage it well in retirement.

As a financial planner with nearly two decades of experience, I've sat with plenty of accomplished people who mastered the accumulation game but were caught off guard by the drawdown phase. The shift is real, and knowing what's coming makes it far easier to handle.

Here are six things that happen to your investments the moment you stop working.

1. Sequence of returns risk takes center stage

While you were saving, a market drop early in your career was almost a gift. You kept buying shares at lower prices, and time smoothed everything out. In retirement, the order of your returns suddenly matters enormously.

A steep decline in the first few years of retirement, while you're also withdrawing to live on, can do damage that a later decline of the same size would not. You're selling shares to fund expenses at exactly the wrong moment, and those shares aren't around to recover when the market eventually rebounds.

Two retirees with identical average returns over a 30-year retirement can end up in very different places depending purely on when the bad years arrived. The one who hit turbulence late may sail through comfortably. The one who hit it in years one and two may run short, even though the long-run average was identical.

This is the single biggest behavioral and structural shift. But most people have never heard of sequence of returns risk until it is upon them.

2. You move from 'growth at all costs' to income and stability

The whole point of accumulation is growth. The point of retirement is using the money. That usually means dialing back the most aggressive parts of the portfolio in favor of holdings that can produce income and ride out volatility with less drama.

This isn't about abandoning stocks altogether, since a multi-decade retirement still needs growth to keep pace with inflation. It's about changing the mix so that a bad year doesn't force you to sell your strongest holdings at a loss to pay the electric bill. The balance you held at 45 is rarely the balance that serves you at 65.

3. Cash suddenly has a job

During your working years, large cash balances felt like a drag — money sitting idle while it could have been invested. In retirement, a cash reserve becomes a tool rather than a missed opportunity.

Holding a year or two of expenses in cash and equivalents gives you somewhere to draw from when markets are down, so you aren't forced to sell investments at depressed prices. That buffer is what lets the rest of the portfolio stay invested through a rough patch.

The mindset flip is hard for lifelong savers, who spent decades being told that idle cash is wasted cash. In retirement, that idle cash is doing important work.

4. Required minimum distributions start making decisions for you

Eventually the IRS stops letting your tax-deferred accounts grow untouched. For 2026, required minimum distributions (RMDs) generally begin at age 73. From that point, you must withdraw a calculated amount each year whether you need the money or not, and it's taxed as ordinary income.

For someone with a large traditional IRA, those forced withdrawals can be substantial enough to push you into a higher tax bracket or trigger Medicare surcharges. The penalty for missing one is steep: 25% of the amount you failed to take, reduced to 10% if you correct it promptly.

RMDs turn your portfolio into something that generates taxable events on a schedule you don't control. This is also why the years before 73 carry so much planning value. Drawing down or converting some of those tax-deferred dollars earlier, while you have room in lower brackets, can soften the size of the RMDs waiting for you later. Wait passively and the distributions, and their tax bill, only grow.

5. Dollar-cost averaging runs in reverse

For decades, you put money in on a regular schedule, buying more shares when prices were low. That steady-drip discipline worked in your favor.

In retirement, the flow reverses. You're taking money out on a regular basis, which means you sell more shares when prices are low — the mirror image of the dollar-cost averaging strategy that served you so well.

This is why withdrawal sequencing and that cash buffer matter so much. Pulling a fixed dollar amount from a falling market chips away at the share count faster than most people expect. The same mechanical force that built your wealth can erode it if you don't plan around it.

6. You become a spender — and that's harder than it sounds

This last one is psychological, but it is no less real. People who spent their whole lives saving often find it genuinely difficult to flip the switch and spend. They under-spend out of anxiety, denying themselves things they planned and saved for, because watching the balance drop feels wrong after decades of watching it climb.

I've seen retirees with more than enough ration their own travel and comfort as if the money were not really theirs to use. Others swing the other way and spend too freely early on, before they have a clear read on how long the money needs to last.

Neither extreme serves you. Becoming a deliberate, comfortable spender, drawing down the money you worked to build without fear or recklessness, is one of the underrated challenges of retirement, and almost nobody warns you about it in advance.

Putting it together

Look at these six issues together and a theme emerges. Retirement isn't just "accumulation, continued." It's a different game with different rules, different risks and a different relationship to your own money. The instincts that built the nest egg — save aggressively, stay heavily invested, ignore short-term noise — don't all translate cleanly to spending it down over decades.

None of this means retirement is something to dread. It means the transition deserves its own plan, not just an extension of the one that got you here. The years right around your retirement date are when these shifts hit hardest, which is exactly why thinking them through in advance, ideally before you stop working, tends to make the whole transition smoother.

The accumulation phase rewarded discipline and patience. The drawdown phase rewards planning and flexibility. Knowing the difference — and adjusting before the shift catches you off guard — is most of the battle.

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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.

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 56-year-old plumber in Cincinnati who's still working. He reports a salary of $60,000 to $105,000.

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?

Slow and steady. Began contributing to my first company-sponsored 401(k) at age 26 and received a 50% match up to 6%, which is about all I could afford to contribute at the time (6%).

When I left that company, I transferred my balance, which wasn't much, to a self-directed traditional IRA and picked some funds.

Began a new job making more money and contributed to their 403(b). Each year when I got a raise, I increased my contribution amount.

Somewhere along the way, I also opened a Roth IRA and a brokerage account and contributed what I could, when I could.

And that is what I am currently doing, though now I focus on maxing out the Roth as soon as possible.

One point to add is that I never once pulled anything out, no matter how bad the market got, like in 2008. I stayed the course, and it has paid off, so far.

I also never sought out the latest stock or trend. I just picked quality mutual and index funds and let it ride.

What are you doing with the money?

I am still building my wealth over the next four years, when I plan to retire at 60.

The Fun Stuff

Did you do anything to celebrate?

Not yet. I will in four more years when the house is paid off, and I tell work to shove it!

What is the best part of making $1 million?

Feeling like I have a chance at a comfortable retirement.

Did your life change?

No. $1 million isn't what it used to be.

Does anyone know you're a millionaire?

No. It is nobody's business but mine.

Any plans to retire early?

Planning to retire at 60 — four more years.

Looking Back

Anything you would do differently?

Contribute more and maybe start earlier.

What advice would you give to your younger self?

Start early.

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

No, just watched a lot of investing videos on YouTube. But if I were to get a book, it would probably be The Total Money Makeover by Dave Ramsey.

Did you work with a financial adviser?

Never worked with a financial planner until recently. Giving it a "trial" run to see if the fees are worth it.

Looking Ahead

Plans for your next $1 million?

I'll figure it out when I get there.

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

Spend less than you make. Don't rack up debt.

You don't need a new phone or car every year or two. The borrower is a slave to the lender — save up to buy what you want/need with cash. The interest saved will help build wealth.

Don't fall for the latest trends, like bitcoin/crypto. Instead, pick some good mutual/index funds and contribute regularly.

Do you have an estate plan?

Not yet.

What do you wish you'd known when you first started saving and investing?

The best index or mutual funds to invest in.

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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• Can Money Buy You Happiness? Yes, It Can. However…

Things that go bump in the night aren't the only frights retirees should fear this Halloween season; their retirement accounts might just scare the bejesus out of them.

That's especially true in the current environment, where inflation is rising, gas prices are elevated, and a U.S. mid-term election is around the corner. Short-term portfolio dips might be scary, but the true nightmares lie in these five hidden traps.

5 Spooky Retirement Investment Moves to Avoid

1. The monster you invited in

You may have heard this AI stock is the next Nvidia, or this option play using an upside-down multi-way spread trade (whatever that is) will make you rich; if you don't understand it and still invest in it, Brant Wong, head of retirement solutions at Principal Asset Management, says that is one of the scariest things an investor can do.

"With any retirement account, for any investor, there are always different investments, different returns, and risks," says Wong. "It's important to understand how these things work." If you don't, you might make mistakes, leading to buying high and selling low, which is what true portfolio horror stories are made of.

2. Zombie investments

If you've switched jobs over the years, or aren't completely on top of your finances, you may have one or more of these: zombie investment accounts. These are old 401(k) accounts, stocks you forget about, or the same investment in multiple ETFs or mutual funds. All of those zombie investments cost you money in fees, redundancy and lost growth. They can be downright frightening, says Patrick Marcinko, a financial adviser at Bogart Wealth.

"Here's an easy fix. At least once a year, look at everything you own and why you own it. If you can't explain why, it's worth looking at it," he said. "It's very important to have an inventory."

To get started, you could search for lost 401(k) accounts.

3. Panic and run

In horror movies, you want everyone to run for the exit or get away from the axe murderer. But doing that when markets are going south, especially when you have a plan, can lead to a bloodletting, warns Wong. Just look at what happened after the Great Recession in 2008 and 2009. Everyone who didn't sell recouped their losses and then some. History has proven that over and over.

"You may want to escape and get away, but with investments it's not that simple," said Wong. "There's risk mitigation, which is why it's important to understand the investment and to make moves to optimally derisk the portfolio." If you have a plan in place and the markets are dropping, don't react, warns Wong. Stick to the plan and ride out the fright show to live another day.

4. Putting all your screams in one basket

Maybe you had stock options at your job, owned a stock that did well over the years, or, for whatever reason, one investment has taken on a life of its own and now represents a big chunk of your investment portfolio. If that rings true, you are committing what Jaime Quiros, CFP and Portfolio Manager at FBB Capital Partners, says is a grave mistake.

"Too much concentration can hurt you in a downturn or if something happens," he says. "Think about Enron, think about Lehman Brothers." Quiros was referring to two companies that collapsed, taking their share value along with them. "You don't want too much of one stock, especially in retirement," said Quiros.

5. Flying blind

One of the most haunting things any retiree can do that will doggedly follow them in retirement is to lack a financial plan. Without one, you may react when things go bad, which could create shortfalls later in life. "The scariest thing in retirement isn't a market drop," said Marcinko. "It's one you didn't plan for."

Avoiding the financial horror movie

Investing in retirement doesn't have to be scary and spooky this Halloween season. By making sure you have a plan, your investments aren't overconcentrated in one area and that you stay the course once you are on track, you can put all those ghouls, goblins and demons to bed once and for all.

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Where do you turn for investment advice? Your parents? A financial adviser? Or that charismatic guy on TikTok who claims he's making a fortune trading stocks?

Long before TikTok, Reddit and YouTube became popular sources of investment advice, my wife and I spent many Friday nights watching Wall Street Week with Louis Rukeyser on PBS. It was entertaining, educational and a great introduction to the sometimes confusing world of investing.

Years later, I was fortunate to work at Fidelity Investments, where I spent 17 years interviewing financial experts and writing about investing, retirement and personal finance. I was surrounded by colleagues who understood how money works, the importance of managing risk and the value of investing for the long term.

I'm thankful for that experience. But I wonder where younger investors are getting their financial education today.

Increasingly, the answer is social media. And while there are plenty of knowledgeable financial professionals sharing useful information online, there are also people whose investment advice can do more harm than good.

Welcome to the world of finfluencers — social media personalities who offer financial tips, investment recommendations and sometimes promises of quick riches.

When popularity is mistaken for expertise

A recent study suggests investors have good reason to be cautious.

Estonian legal services firm Legalaes analyzed 1,764 finance-related videos across YouTube, TikTok, Instagram and Facebook, representing more than 692 million views. It classified 29% as misleading under its criteria, which included questionable investment claims, guarantees and certain promotional practices*.

Even more concerning, those videos averaged roughly 556,000 views, compared with 326,000 for videos without those warning signals.

The Legalaes study also found that only 2.2% of the 1,266 creators sampled had demonstrable relevant financial qualifications. Fewer than 12% of the videos included disclaimers or had them on the creator's profile.

Trading tips and technical analysis had the highest incidence of misleading signals, at 40.6%. YouTube had both the highest percentage of misleading videos and the highest percentage of content classified as accurate.

Closer to home, a FINRA Investor Education Foundation study (pdf) found that 61% of investors ages 18 to 34 had made an investment decision based on a recommendation from a social media personality. That compares with 31% of investors ages 35 to 54, and just 6% of those 55 and older.

Social media is clearly influencing how Americans invest. The question is whether investors know enough to distinguish useful financial education from advice that could cost them money.

Here are seven ways to protect yourself.

1. Don't confuse a good story with good investment advice

Remember the old Wall Street saying, "When the ducks quack, feed them"?

Scott Hanson, co-founder of Allworth Financial and longtime host of the Money Matters radio show and podcast, says investors should beware of people promoting the latest hot investment, including triple-leveraged exchange-traded funds.

"The most dangerous advice is not always obviously false," Hanson says. "It often begins with an accurate fact, removes the investor's personal context and turns it into a universal recommendation."

An investment might make sense for someone with decades until retirement, considerable savings and a high tolerance for risk. It might be entirely inappropriate for someone saving for a first home or preparing to retire.

Hanson also recalls a neighbor who once sold investment products, dropped his financial licenses and continued selling anyway. "It took the financial regulators a couple of years, but he eventually got caught, and it's likely that a few clients got burned in the process," Hanson says.

The lesson? Before following someone's financial advice, find out who's giving it and whether they're qualified.

2. Check credentials — and make sure they fit the advice

Financial certifications can be confusing. But a few respected designations are worth knowing.

A Chartered Financial Analyst (CFA) typically has specialized investment analysis and portfolio management training. A Certified Financial Planner (CFP®) focuses on comprehensive financial planning, while a Certified Public Accountant (CPA) specializes in accounting and taxation.

Credentials alone don't guarantee good advice. But they provide a useful starting point.

You can verify an investment professional's registration and disciplinary history through Investor.gov, the Securities and Exchange Commission's investor education website, or FINRA BrokerCheck. The CFP Board and CFA Institute also maintain credential-verification resources.

Keep in mind that someone providing general financial education online may not be required to register as an investment adviser. But if that person offers individualized investment recommendations or wants to manage your money, understanding their regulatory status becomes especially important.

And remember: A large following, polished videos and impressive testimonials are no substitutes for professional qualifications.

3. Follow the money: What's the finfluencer selling?

There's nothing inherently wrong with financial educators earning a living from newsletters, advertising, sponsorships or online courses. Plenty of credible experts do.

But consumers deserve to know how those experts are compensated.

Ernie Wingard, an adviser at Capital Choice Financial Group in North Richland Hills, Texas, says investors should be suspicious when a financial personality talks almost exclusively about one product.

"If they are only talking about indexed universal life or whole life insurance and not providing alternatives, that may suggest they're only licensed to sell in one area," Wingard says. "They may be pushing those products because they're the only ones they are licensed to offer."

The same applies to trading strategies.

Wingard says someone who focuses exclusively on day-to-day trading decisions, without discussing taxes, retirement planning or investment alternatives, may primarily be promoting a trading newsletter or educational course.

That doesn't automatically make the information worthless. But it should prompt another question: Is this person trying to educate me, or turn me into a paying customer?

Vignesh Coumarane, founder of Richmond, Virginia-based InvestEd, recommends a simple test: Look at the incentives.

"What's their motivation?" he asks. "You should see what the source gets if you follow their advice. Someone earning money from a newsletter or article may have different interests than yours."

4. Don't let FOMO become your investment strategy

One of the biggest threats to investors, young and old, is FOMO, or fear of missing out.

You've probably seen the pitches: Don't miss the next big thing. Get in now. This investment could change your life.

The excitement is contagious, especially when social media feeds are filled with screenshots of extraordinary returns.

"People want to latch onto shiny investments. It makes them feel good. They are told that now is the time to get in," says Michael Schramm, author of the forthcoming book Emotional Finance.

Schramm, a CFA, points to speculative investments, including cryptocurrencies, that can attract intense attention on platforms such as Reddit but may not make sense for every investor.

His advice is refreshingly simple: Take a deep breath. Ask yourself whether the recommendation feels legitimate. If it feels like a scam, it may well be one.

I'd add another suggestion: Give yourself 24 hours before acting on an investment idea discovered on social media.

A legitimate long-term investment strategy generally won't disappear because you took a day to investigate it.

5. Beware of guaranteed returns and secret strategies

There are few guarantees in investing. And if someone promises unusually high returns with little or no risk, that's a warning sign.

Investment disclosures routinely remind investors that "past performance does not guarantee future results." It's a message worth remembering when you encounter someone boasting about spectacular trading profits.

Be especially cautious about strategies involving borrowed money, highly leveraged investments or putting a substantial portion of your savings into a single stock or cryptocurrency.

Bridge Jackson, founder of Seattle-based fintech startup OUIvest, believes one of the biggest problems with financial advice on social media is that visibility can easily be mistaken for credibility.

A large following, sophisticated graphics or screenshots showing profitable trades tell investors little about whether the creator is qualified or whether the investment is suitable for them.

Jackson encourages investors to ask three questions: Who is giving the advice? How do they benefit if I follow it? And can I independently verify what they're telling me?

Those are good questions to ask before putting your hard-earned money at risk.

6. Do the math before you invest

One of the best ways to evaluate financial advice is to ask the person giving it to explain the numbers.

Coumarane says his first test is whether a creator shares the reasoning, assumptions and calculations behind a recommendation.

If someone suggests buying a particular investment, paying down debt or changing your savings strategy, you should be able to understand how the recommendation applies to your financial situation.

"If you cannot see the math, it is a sign that it may not be genuine," he says.

For example, someone might recommend paying off a low-interest mortgage rather than investing. But what's the mortgage rate? What's the expected investment return? What are the tax implications? How much emergency savings do you have?

Without that context, the advice is incomplete.

You don't have to be a financial analyst to ask reasonable questions. And if the person offering the advice can't explain the assumptions in plain English, consider that another warning sign.

7. Use social media to learn, but verify before acting

Despite these warnings, social media can be an excellent resource for younger investors who are just beginning to understand money.

Jackson believes financial education needs to meet younger people where they are.

"Newbie investors, age 20 to 30, don't want to go to Fidelity or Schwab. So they go online," Jackson says. "But they need basic financial literacy education, so we're making it more fun with gamification and AI."

That's an encouraging development. We need more accessible, engaging financial education, especially for people who may not have parents, teachers or experienced advisers to turn to.

But education and individualized investment advice are two different things. A video explaining how compound interest works can be valuable. So can an introduction to index funds, retirement accounts or the risks of borrowing money to invest.

A stranger telling you to put half your savings into a particular stock is another matter.

Before investing, compare claims with independent information from the SEC, FINRA, established financial institutions and primary company disclosures. If you're working with a financial adviser, ask how the idea fits into your overall plan.

The bottom line: Be curious, but be careful

I'm glad younger generations have so many ways to learn about investing. It's certainly more convenient than waiting until Friday night to watch Wall Street Week.

But access to financial information doesn't automatically translate into financial knowledge.

The best financial educators help you understand risk, evaluate alternatives and make thoughtful decisions. They're transparent about their qualifications, compensation and the limitations of their advice.

The ones to avoid rely on urgency, exaggerated promises, get-rich-quick schemes and a steady drumbeat of recommendations that always seem to lead to another product or subscription.

So keep learning. Follow knowledgeable financial professionals. Ask questions and build a network of trusted sources.

Just remember that having a million followers doesn't make someone a financial expert. And before you invest a dollar based on something you saw online, do your homework.

When it comes to your money, buyer beware.

*Legalaes methodology: The study relied on rule-based text analysis rather than individual manual fact-checking. Its misleading classification therefore should not be equated with proof that every flagged video contained false information. The Legalaes study classified 29% of sampled videos as misleading under its own criteria, which included certain promotional practices — not necessarily factually incorrect advice.

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American Express and Airbnb are teaming up to give travelers more ways to earn rewards and save on vacation rentals at the same time. The new partnership, announced October 22, 2026, brings more than 1 million Airbnb listings worldwide to American Express Travel, along with expanded Membership Rewards opportunities and new benefits for eligible cardholders.

For travelers who already use Airbnb for family vacations, extended business trips or weekend getaways, this partnership could make American Express cards more rewarding. Eligible cardholders can earn up to 5X Membership Rewards points on qualifying prepaid Airbnb stays booked through Amex Travel.

Cardholders with the American Express Platinum Card® or The Business Platinum Card® from American Express can also access up to $850 in combined annual statement credits, including an expanded $600 Lodging Credit and a new $250 Airbnb Experiences Credit. Terms Apply.

However, there's a catch. The biggest statement credits are tied to Airbnb Luxe properties, and travelers must meet specific booking requirements to qualify. That means the new benefits may be more valuable to luxury travelers than those looking for affordable accommodations.

Here's how the partnership works and what to consider before booking your next Airbnb stay.

How to use the $600 American Express Lodging Credit for Airbnb stays

One of the biggest changes from the new partnership is the expansion of the $600 Hotel Credit, now called the $600 Lodging Credit. Previously, the benefit covered eligible prepaid hotel reservations through Fine Hotels + Resorts® and The Hotel Collection.

Now, cardholders with the American Express Platinum Card® or The Business Platinum Card® from American Express can also use the credit toward qualifying Airbnb Luxe stays.

Airbnb Luxe is Airbnb's collection of high-end vacation rentals, including luxury estates, spacious villas and other premium accommodations. Standard Airbnb listings don't qualify for the credit.

To use the Lodging Credit on Airbnb, eligible cardholders must book a prepaid Airbnb Luxe stay of at least two nights through Amex Travel using their eligible card.

The $600 annual benefit is divided into two periods:

• January through June: Up to $300 in statement credits.

• July through December: Up to $300 in statement credits.

Unused credits don't carry over between periods, so cardholders can't apply the entire $600 toward one reservation in a single half of the year.

For example, if you book a qualifying two-night Airbnb Luxe stay for $1,300 in November, you could receive up to $300 in statement credits, assuming you haven't already used your credit for the second half of the year. The booking must be processed during the applicable benefit period, but you don't have to complete your stay before that period ends.

There's another important change coming for eligible cardholders who prefer hotels. Starting January 1, 2027, Fine Hotels + Resorts® reservations must be at least two nights to qualify for the Lodging Credit. Previously, eligible one-night stays could qualify. The Hotel Collection already requires a minimum two-night stay.

This change could make the benefit less flexible for travelers who frequently book single-night hotel stays or short business trips.

What's the catch with the new $250 Airbnb Experiences Credit?

American Express is introducing a new benefit that allows eligible cardholders to receive up to $250 annually in statement credits for Airbnb Experiences. These activities include guided tours, cooking classes, cultural excursions and other experiences hosted by local experts.

However, the credit isn't automatically available to everyone with the American Express Platinum Card® or The Business Platinum Card® from American Express. Cardholders must first book a qualifying prepaid Airbnb Luxe stay through Amex Travel to unlock the benefit.