For millions across the country, the 2026 midyear mark is as much a time for financial planning as it is for celebration. This summer marks America's 250th birthday — a historic milestone for our country's independence.

But while the nation was founded on a rebellion against unfair taxes, tossing your computer into the nearest harbor probably wouldn't work when it comes time to pay the IRS; December 31st is the final deadline for most 2026 tax year money moves.

Instead, you might just want to look to the wisdom of founding father and financial thinker, Benjamin Franklin, this planning season.

Franklin famously noted that, "nothing can be said to be certain except death and taxes." And though you can't escape either, you can control how much you overpay the government.

By applying Ben Franklin's wisdom to midyear tax planning today, you could help secure your retirement nest egg, fund intergenerational wealth, and potentially lower your tax bill in 2026. Here's how.

1. "The Doors of Wisdom are never shut."

Popularized in the 1755 edition of the Almanac, Franklin quoted this proverb to challenge the status quo in how we do things; it's easy to fall into a routine of wash, rinse, and repeat.

But routinely doing your taxes the same way every year can cost you. Gain a little midyear tax wisdom through the following ways:

• Learn midyear strategy. You don't have to wait until April to learn a new tax strategy. Platforms like the IRS Video Learning Portal and tax software academy portals offer free, year-round webinars to help you spot planning opportunities before the year-end deadline strikes.
• Revitalize your filing plan. Your revenue streams may change, and so should your taxes. For instance, if your financial situation has simplified, you might no longer need an expensive tax professional anymore. Alternatively, if you've bought property or started a business, doing taxes yourself might cause you to overlook certain tax deductions and credits.
• Save with free tax tools. There are several ways to file your taxes for free each year. For example, the IRS reports that millions of taxpayers have saved over a billion dollars collectively using IRS Free File alone. Evaluate free filing tools available to you now, while you're outside of the chaotic tax season stress.

2. "Beware of little expenses; a small Leak will sink a great Ship."

In the Almanac, Poor Richard warns that "a little punch" or extra tea now and then might seem like "no great Matter," but accumulated tiny expenses can sink your long-term financial ship.

In terms of midyear tax planning, the lesson is simple: Don't miss the small stuff. Now is the perfect time to audit your tax records before the end-of-year holiday chaos.

• Audit your health accounts. Check your Flexible Spending Account (FSA) or Health Savings Account (HSA) balances. Ensure your medical procedures, prescriptions, and qualifying purchases are properly documented with clean receipts (no matter how small), and budget out your remaining FSA funds if your plan has a strict year-end deadline.
• Track new tax provisions. If you plan on claiming provisions from the 2025 Trump tax bill, tracking documentation is key. For example, the car loan interest deduction allows you to deduct up to $10,000 in interest, but only if the vehicle was bought new, is used primarily for personal use, and had its final assembly in the U.S. Make sure you qualify for all the tax deductions and credits you plan on claiming.
• Organize the paper trail. Start digging through your kitchen junk drawer or email folders. You'll want to make sure you have your tax mileage log on file if you're, say, a ride-share driver, or have your gambling tax documentation if you've placed a bet this year. Start the family's designated "tax folder" now to avoid unnecessary stress later.

3. "Early to Bed and early to rise, makes a Man healthy, wealthy, and wise."

Printed in the 1735 edition of the Almanac, this phrase originally praised the discipline of an industrious lifestyle. Let's modernize that approach and polish it into a midyear tax mantra:

"Early to check and early to optimize makes you more planned, less stressed, and energized."

Corny, sure.

But a midyear checkup ensures you aren't accidentally giving Uncle Sam an interest-free loan — or worse, setting yourself up for an IRS underpayment fee or penalty. Here's the phrase broken down:

For more information on how to plan your tax payments and optimize your withholdings, check out Kiplinger's reports on Estimated Tax Payments and 13 Things Every Worker Needs to Know About Withholding.

4. "Having been poor is no Shame, but being ashamed of it is."

Printed in 1749, this quote reminds us that financial struggle is often a consequence of shifting circumstances, not a lack of virtue. In tax planning, knowing how to handle these financial pivots — and leveraging the IRS code to protect your downside — can be a key tool in your tax toolbelt.

Here's how we can relate that to our midyear tax planning strategy:

• Harvest your investment losses. Know when a position isn't working out. Through tax-loss harvesting, you can sell underperforming equities to counteract your capital gains. If your losses exceed your gains, you can use them to offset up to $3,000 of ordinary income, carrying the rest over to future years.
• Strategize charitable giving. If you want to support a cause close to your heart, plan those donations now rather than scrambling in December. Strategizing early helps you maximize itemized charitable deductions and navigate the new 2026 rules on charitable giving.
• Utilize a QCD. If you're age 70½ or older, you can make a qualified charitable distribution (QCD) directly from your IRA to an eligible charity. This counts toward your required minimum distribution (RMD), the minimum annual amount you must withdraw after reaching a certain age, and also helps keep that money out of your AGI, potentially lowering your tax bill.

5. "Money can beget Money, and its Offspring can beget more."

Moving away from the Almanac, this quote comes from Franklin's 1748 essay, "Advice to a Young Tradesman." Franklin was explaining compound interest, noting that money is of a "prolific generating nature."

Retirement accounts and legacy planning are perfect examples of compounding wealth while avoiding high taxes. And midyear is a great time to double-check that your savings vehicles are on track.

• Maximize pre-tax contributions. If you're currently working and in a higher tax bracket than you expect to be in retirement, maximize your traditional 401(k) or other traditional IRA contributions now. It lowers your taxable income today and gives you more immediate cash flow to save or invest. Later, when your federal tax bracket is (hopefully) a little lower, you'll be taxed on the contributions when you withdraw them.
• Plan the "perfect" Roth conversion window. If you anticipate an upcoming low-income year — maybe you're freshly retired but haven't started drawing Social Security or reaching your RMD age yet — plan a potential Roth IRA conversion ahead of time. Converting traditional retirement funds into a Roth during a low-income year allows you to pay a low tax rate on the conversion, but while there are six reasons to convert to a Roth, there are reasons not to.
• Evaluate your estate tax plan. Check in with your financial advisor about your new estate tax exemption amount. Are you optimizing for the stepped-up basis of inherited assets, leaving appreciated equity without capital gains after death? Also, review whether you should use the annual gift tax exclusion to pass tax-free assets to children or grandchildren in 2026.

From shifting brackets to new legislative bills, tax planning is typically a moving target that requires at least a bi-annual checkup.

While a great financial professional can help you tailor these moves to your specific roadmap, keeping these five pieces of financial wisdom in mind may help you avoid being caught off guard and keep you focused on what matters most this summer — celebrating.

Happy planning!

This article is for informational purposes only and does not constitute professional tax or financial advice. Tax laws (including state taxes) are subject to change and vary by individual circumstances. Consult with a qualified tax professional regarding your specific situation.

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The death of a partner often forces a surviving spouse to face two challenging and conflicting timelines at once: The open-ended process of grief and the immediate reality of financial and tax deadlines and consequences.

Chief among these is the so-called "widow’s penalty."

Despite the name, we're not talking about an official IRS penalty or surcharge. Rather, the widow's penalty is a series of tax and financial shifts that occur when a surviving spouse's tax filing status changes from married filing jointly to single.

The amount of tax-friendly space available to the surviving spouse changes as the standard deduction shrinks, federal income tax brackets compress, and Medicare income thresholds become less favorable.

Meanwhile, tax returns still have to be filed. Retirement accounts continue generating required distributions, and Medicare premiums are recalculated according to established rules and deadlines.

To visualize this, imagine traffic flowing on a four-lane highway suddenly merging into one. The number of cars remains the same, but there is far less room to move.

Understanding these changes and how they interact can help surviving spouses anticipate surprises before they appear on a tax return, Medicare notice, or unexpected bill. Here's more of what you need to know.

The reality of single filing status after a loss

At the center of the widow’s penalty is a deceptively simple shift: moving from married filing jointly to filing as a single taxpayer.

In the year a spouse dies, the surviving spouse can generally still file a joint tax return. By the following tax year, however, many widows and widowers begin facing a very different tax landscape.

Wider federal income tax brackets, a larger standard deduction, and other advantages available to married couples may no longer apply, potentially increasing the taxes owed on the same retirement income.

You can see the differences in the following table.

2026 Tax Thresholds: Single vs Married Filing Jointly

For 2026, the 12% federal tax bracket extends to $100,800 for married couples filing jointly. For single filers, that same bracket tops out at $50,400.

Federal income tax brackets compressed. A widow whose retirement income once fit comfortably within the 12% bracket while married may suddenly find any income over $50,400 pushed into the 22% bracket the very next year.

The standard deduction is cut in half. Even if the surviving spouses' total household income drops slightly, a much larger portion of it is exposed to higher tax rates. This is because the surviving spouse is now claiming a smaller standard deduction; they often end up paying taxes on a much larger share of their remaining income than they expected.

In short, the widow's penalty shift isn’t necessarily driven by more income. Instead, it often reflects the reality that the tax code provides fewer advantages once a surviving spouse begins filing as a single taxpayer.

Your income may fall, but taxable income often doesn’t

One of the most common misconceptions surrounding the widow’s penalty is the assumption that household income is automatically cut in half after the death of a spouse.

Retirement finances, however, are rarely that simple, and a lower income does not automatically result in a lower tax bill.

A surviving spouse may lose one Social Security benefit and potentially a portion of pension income. Other sources of retirement income may continue unchanged, including:

• Investment income continues, survivor benefits may kick in, and retirement accounts must still generate Required Minimum Distributions (RMDs).
• These mandatory withdrawals increase adjusted gross income (AGI), which can further complicate the picture by triggering higher Medicare premiums and increasing the taxable portion of Social Security benefits.

Ultimately, household income may decline, but the tax advantages that once helped shelter that income decline as well.

For instance, if both you and your spouse qualified for the new "senior bonus" deduction, your total tax break might have been $12,000. Now, that tax deduction is capped at $6,000.

Other overlooked tax deductions and credits might be lower with just one individual in the household rather than two.

Why more of your Social Security benefits may become taxable

Many retirees assume that if they’re receiving fewer Social Security benefits after the death of a spouse, they’ll owe less tax on those benefits. In reality, the opposite can sometimes occur.

• Although a surviving spouse may lose one Social Security check, they often continue receiving the larger of the two benefits.
• At the same time, they may be filing as a single taxpayer under a different set of income thresholds.
• As a result, a larger percentage of Social Security benefits may become subject to federal income tax.

For single filers, the thresholds used to calculate taxable Security benefits are significantly lower than those available to married couples filing jointly.

But the rule of taxability remains the same. Up to 85% of their Social Security benefits may be taxable, depending on a survivor’s income, including from retirement accounts, pensions, and other sources.

That is another example of how the widow’s penalty can emerge through changes elsewhere in a surviving spouse’s financial picture.

Medicare premiums can rise even if income falls

For many retirees, Medicare premiums are one of the last places they expect to encounter the widow’s penalty. Yet for some surviving spouses, healthcare costs can become part of the equation.

In many cases, the answer lies in a Medicare surcharge known as the Income-Related Monthly Adjustment Amount, or IRMAA. Higher-income beneficiaries pay additional Medicare Part B and Part D premiums, and those surcharges are based on income reported on a tax return from two years earlier.

• Because IRMAA uses a two-year income lookback and lower income thresholds for single taxpayers, some surviving spouses may find themselves paying higher Medicare premiums even if household income has declined.
• In some cases, surviving spouses may be able to request an IRMAA adjustment based on a qualifying life-changing event, including the death of a spouse, by filing Form SSA-44 with the Social Security Administration (SSA).

Still, IRMAA is another example of how several separate rules can quietly stack on top of one another, exacerbating the widow's penalty.

What surviving spouses can do now

Even though every situation is different, there are some planning opportunities worth discussing with a qualified tax professional or financial advisor who can advise you on your specific situation. Here are a few to get you started.

Taking advantage of the final joint-filing year. The year a spouse passes away provides a final opportunity to leverage the wider "married filing jointly" tax brackets and a larger standard deduction before your filing status changes.

Exploring strategic Roth conversions. Converting portions of a traditional IRA into a Roth IRA during the final joint-filing year — or during lower-income transition years — can help shrink future mandatory distributions and reduce long-term taxable income.

For example, converting $25,000 from a traditional IRA to a Roth IRA during a lower-income year may allow a surviving spouse to lock in a lower tax rate and create a source of tax-free income later in retirement.

Monitoring Medicare income thresholds. Because Medicare relies on a two-year lookback to determine IRMAA surcharges, spikes in taxable income today can dramatically increase your future Part B and Part D premiums.

Working with a tax professional to spread large withdrawals or Roth conversions over multiple years may help avoid crossing into a higher IRMAA bracket.

If your income falls due to a qualifying life-changing event, you may be able to request a new IRMAA determination using Form SSA-44.

Coordinating Social Security survivor benefits. Deciding when to switch from your own retirement benefit to a survivor benefit (or vice versa) requires careful timing to maximize lifelong guaranteed income while managing the sudden shift to single tax brackets.

Reviewing your Social Security claiming strategy may help optimize survivor benefits while minimizing potential tax consequences.

And keep in mind, this piece discusses federal income tax rules and changes, but state income tax consequences may differ. So always consult a trusted advisor who can help with your individual circumstances.

Related

• Taxes on Social Security Benefits: 6 Things You Need to Know
• 2026 Federal Tax Brackets and Income Tax Rates
• Filing a Deceased Person's Final Income Tax Return

Dear Wealth Wise: I'm 46 with two teens. I'm debt-free, own my home outright plus three rentals, and have a $5 million portfolio that I actively manage across diversified markets. I live well below my means, am extremely frugal, and do most repairs myself. I met a great partner (48) who also has two teens, owns a home with a mortgage, has a great job with a pension in six years, and has a 401(k) worth $400K. He spends way more freely than I do. We're discussing the future but have different views on money and different asset levels. How can I protect myself and my kids?
— Cautiously In Love

Dear Cautiously In Love: Meeting a romantic partner later in life can be a wonderful but challenging thing, especially if there are kids in the picture. Blending families isn't easy, especially when navigating the already tricky teenage years. Here's what the experts have to say about her situation.

A prenuptial agreement is key

When you have two people entering a potential marriage with very different levels of wealth, it's natural to want to protect yourself, as well as your children.

Julia Rueschemeyer, a Massachusetts-based divorce lawyer, says, "If you are planning on getting married, the best and only way to protect yourself is to do a prenuptial agreement. This can spell out exactly what would happen financially in the case of divorce, and it would trump any state laws about division of assets and alimony."

Of course, the challenge is that prenups can have a negative connotation. But it's important to recognize that signing a prenup isn't inviting your marriage to fail. It's simply a way to protect yourself, especially since some states have very strict laws about how assets are divided in the event of a divorce.

As Rueschemeyer cautions, "[Massachusetts] state law says that a judge can take any and all assets of one party from before or during marriage and give them to the other party. Only a prenuptial agreement protects you from that."

Don't be afraid to keep some of your finances separate

It's clear that frugality has played a role in your financial success. That's why Kristyn Carmichael, professional mediator, family attorney, and Certified Divorce Financial Analyst at Couples Solutions Center, says it may be a good idea to keep some of your finances separate, especially if you and your partner tend to have different views on spending.

"Many of my clients are in this exact situation," she says. "Anything they bring into their marriage is kept separate property. They open a joint bank account that is for agreed upon joint expenses… They determine their budget for these expenses and contribute to the account either equally or in proportion to income on a monthly basis."

From there, though, all other expenses, such as individual costs for hobbies, shopping, solo vacations, and kid-related expenses, should be paid from their own accounts, Carmichael advises. That way, there doesn't have to be resentment over how much is being spent. And also, each person retains autonomy without having to consult the other.

This could lead not only to cleaner finances but also to a more harmonious relationship.

Put the right estate planning documents in place

In addition to a prenup, Carmichael says it's important to have your estate planning wishes documented.

"You will also want a will and trust in place to protect your children individually," she says.

Carmichael says that a trust, for example, might come into play if one of you moves into the other's home.

"If the owner of the home were to pass away," she says, "they [could] will the home to their children but leave a clause that their partner can live in the home for up to a certain amount of time. This allows that person time to grieve since they lost their partner without being kicked out of their home, giving them a transition period while also retaining the children's interest in the asset."

Rueschemeyer says a revocable trust could be a particularly powerful tool in this situation.

"Real estate in a revocable trust does get the step-up in basis when the owner dies," she says. "The heirs pay capital gains only on increases in value from the time the property passes to them until they sell it."

Finally, our reader might consider a QTIP trust, which is especially helpful for blended families. A QTIP would allow her to provide lifetime income for her husband if she dies first, while legally ensuring that the remaining principal ultimately goes to her children, not his.

Talk to a counselor to avoid financial conflict

It's clear that you and your partner view money differently. And there's nothing wrong with that. You don't need to have the exact same financial philosophy to make a marriage or long-term relationship work.

That said, Rueschemeyer suggests, "Besides getting a prenup, you should meet with a relationship counselor to talk about money before you get married. This could help you talk about your financial habits and aspirations and come to a better understanding and appreciation for each other.

Counseling could also give you the coaching you need to talk about money openly, Rueschemeyer says, so you can enjoy it in your relationship rather than have it become a source of conflict.

A word from Wealth Wise

We understand our reader's concern about protecting her considerable assets in a new marriage, but we aren't convinced that her love interest is a financial slouch. In fact, with savings of $400,000 in his 401(k), he has amassed a much larger 401(k) balance than the average 40-something in the U.S., which was $140,000 in the first quarter of 2026.

Moreover, he has a pension, a good job and owns a home, which demonstrates financial discipline and a commitment to a solid retirement. He may feel more comfortable spending money than she does simply because they grew up in different financial circumstances or cultures.

For that reason, we recommend she start with Rueschemeyer's advice to see a counselor. The couple will need to discuss some basic assumptions and questions, such as how much money they need to feel safe, how they will handle big expenses and purchases and where and how they want to live and retire.

More Advice from Wealth Wise

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Questions from real people, for real people.

• Wealth Wise: Should We Borrow Money From Our Elderly Father?
• Wealth Wise: Should We Downsize or Drain Our 401(k) to Pay Off Our Home?
• Wealth Wise: You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• Wealth Wise: Bridging the Healthcare Age Gap for Military Couples with TRICARE and Medicare

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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You've done everything right. You saved diligently for decades, worked with a financial planner and built a retirement nest egg that should, by any measure, fund the life you've been dreaming about.

So a few months in, why do so many new retirees find themselves feeling vaguely … restless?

There's a concept in psychology called the hedonic treadmill, and it may be the most important retirement planning topic no one is talking about. The idea is deceptively simple: Human beings have a powerful tendency to return to a stable baseline of happiness regardless of what happens to them, positive or negative. We adapt. Quickly.

That new-car smell fades. The lake house becomes just "the house." The golf game you couldn't wait to play every day starts feeling like obligation by the third month. The dopamine hit is real, but it's short-lived. And then the treadmill catches back up.

The treadmill is already running in your retirement plan

Here's where it gets personal. In my years as a financial planner, I've worked with many clients to build what we call an "intentional financial life" — defining what an ideal retirement looks like, then building the plan to get there. We reach the milestone, we celebrate. Then, almost without fail, the goal posts move.

It's not ingratitude. It's biology. The hedonic treadmill doesn't care how hard you worked or how carefully you saved. It just keeps running. And the retirement transition is one of the moments in life where this phenomenon hits hardest, because so much of your identity, your schedule, your relationships, your sense of purpose, changes all at once.

The research backs this up. Studies consistently show that retirees who anticipate a dramatic, lasting boost in happiness from leaving work are often disappointed. The first year frequently brings a genuine honeymoon phase.

But by year two or three, life satisfaction tends to drift back toward pre-retirement levels, unless something more intentional is put in its place.

Moving the goal posts isn't always a bad thing

I want to be careful here, because ambition in retirement isn't the enemy. Plenty of retirees channel the hedonic treadmill productively; they launch a second act, mentor the next generation, or build something new precisely because sitting still didn't suit them. The treadmill, in that case, becomes fuel.

The problem comes when the goal posts keep moving without intentionality behind them. Or, to put it another way, when "enough" never arrives because it's always defined by something just out of reach — a bigger portfolio number, a better house in a warmer state, one more year of work "just to be safe." That's not ambition. That's the treadmill running you.

I've seen the other side of this, too, and it's worth holding up as a model. Occasionally, a client will look at what they've built, look at their life and make a deliberate choice to step off. Not because they've given up, but because they've genuinely recalibrated what they're chasing and realized that "more" isn't the answer.

Their happiness doesn't come from the outside. It comes from an internal sense of enough. Those are the clients I learn the most from.

What the research says actually works

The good news is that the hedonic treadmill can be managed — not defeated, but worked with. Behavioral economists and positive psychologists have identified a handful of things that produce durable life satisfaction rather than a quick spike and fade.

Experiences over things. Spending on experiences, travel, time with grandchildren or learning something new produces longer-lasting happiness than material purchases. Possessions adapt into the background of your life. Memories don't.

Purpose and structure. Retirees who maintain a sense of meaning, through volunteering, part-time work, creative pursuits or community involvement, consistently report higher life satisfaction than those who treat retirement as a permanent vacation. Structure matters more than most people expect.

Social connection. Loneliness in retirement is a documented health risk. The relationships you invest in, with friends, family and community, are among the most reliable predictors of well-being in later life. No portfolio allocation compares.

Savoring and gratitude. Actively noticing and appreciating what's already good — rather than focusing on what's next, is one of the most well-documented ways to raise a personal happiness baseline. It sounds simple because it is. It's also genuinely hard to do consistently.

What this means for your retirement plan

Here's the honest truth: Most retirement plans are built around a number. Hit the number, stop working, be happy. That's the implicit promise. But if the hedonic treadmill has taught us anything, it's that the number alone won't get you there.

The financial piece matters enormously. Security is foundational, and I'm not minimizing it. But the clients I've seen thrive in retirement didn't just plan for what they'd stop doing. They planned for what they'd start. They defined what a good day looked like at 68, and then built a life — not just a portfolio — that could support it.

The treadmill keeps running. That's not a tragedy — it's just how we're wired. The question is whether you're running toward something that genuinely matters to you, or just running.

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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 people step out of their working years and into retirement, they could still have a long journey ahead — perhaps longer than they ever imagined.

Consider how much longer healthy individuals are living today compared with a century ago. For many people, retirement is far more than a brief chapter. It can stretch for decades, which means your planning needs to account for all those years if you want a fulfilling retirement rather than one weighed down by financial stress.

One key to navigating this successfully is having a healthy perspective on accepting longevity. Rather than viewing a long retirement as an obstacle to overcome, think of it as your greatest lever, a powerful tool you can use to your advantage.

Don't eliminate all risk

One way to leverage longevity is by understanding how your investments can complement a longer time period. Many people are tempted to strip nearly all risk from their portfolios as retirement approaches because they worry they won't have time to recover from a market downturn.

While it's true that significant volatility early in retirement can do serious damage to a portfolio (especially when you're simultaneously withdrawing money to cover living expenses while the market is falling), that doesn't mean a conservative approach is your only option.

Protecting every dollar isn't always as efficient as it seems. A portion of your portfolio still needs to be positioned for growth, and that requires accepting some level of risk.

It might feel uncomfortable in this stage of life, but the risks you take should be driven by your needs, not your fears. If you hold on too tightly and suffocate your dollars from growing, they might run out before your retirement does.

This is exactly where longevity becomes your ally. A retirement that lasts 20 or 30 years gives your invested assets real time to recover from market setbacks and continue growing.

That doesn't mean going all in on equities. You absolutely want to shield a portion of your money from market volatility. But keeping your entire portfolio in CDs or similar instruments that can't keep pace with inflation isn't safety — it's a slow erosion of purchasing power.

A balanced investment plan helps give your money a fighting chance over the two or three decades ahead.

An important subject often left unmentioned

When planning for a retirement that could last 20 years or more, one topic deserves a prominent place in the conversation: The potential need for long-term care.

Unfortunately, too many people push this topic aside — which is understandable, but not wise. The prospect of needing a nursing home or round-the-clock in-home care isn't a pleasant topic on which to dwell.

However, these costs can have an incredibly detrimental impact on your retirement savings if you don't plan for them.

The fear of the cost is the other reason people disengage. When they see the numbers involved, planning can feel futile, so avoidance becomes the path of least resistance.

That fear isn't misplaced: Long-term care is genuinely expensive. According to CareScout's yearly Cost of Care survey, the median annual cost of a semiprivate room in a nursing home is $114,975. In-home care can run close to $80,000 annually.

These costs are precisely why planning needs to begin early. Putting it off means that when the need arises, you could find yourself scrambling to address a situation for which you never prepared, and by then, your options might be far more limited.

Those with significant wealth have more flexibility here — not because they're less likely to need care, but because they can afford to pay for it out of pocket. For them, the plan is straightforward: Write a check when needed. Most people don't have that option.

To start, it's worth taking the time to review your options for covering long-term care costs. These might include a dedicated long-term care insurance plan, a life insurance policy with a long-term care rider or setting aside a portion of your savings specifically for that purpose.

This is where the right financial adviser makes a genuine difference, one who is an empowering steward rather than a cautionary money manager. The goal is to build a plan that will help navigate the uncertainties ahead by capitalizing on longevity.

A long retirement can feel like a risk — but it doesn't have to. With the right mindset and planning, longevity becomes an opportunity, not a burden.

Ronnie Blair contributed to this article.

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

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

For decades, the 60/40 portfolio — allocating 60% to equities and 40% to fixed income — stood as the gold standard of wealth management.

Its appeal was rooted in a simple and elegant idea: When stocks decline, bonds typically rise, creating a natural hedge that allows investors to "buy and hold" their way to long-term growth.

However, for accredited investors — those with at least $1 million in investable assets — the financial landscape of 2026 has exposed the limitations of this static approach.

In a world shaped by rapid technological disruption, geopolitical shifts and persistently higher interest rates, the traditional 60/40 portfolio is no longer a reliable safety net.

In many cases, it has become a source of unintended risk.

To preserve and grow capital in this environment, the conversation must evolve from static risk management to tactical risk management.

The failure of the static model

Static risk management is, by design, reactive. It depends heavily on historical correlations, assuming that past relationships between asset classes will continue into the future. Its primary mechanism is periodic rebalancing — adjusting holdings to maintain a fixed allocation like 60/40.

Recent inflationary cycles have highlighted a critical flaw in this approach. During periods of rising inflation, the traditional inverse relationship between stocks and bonds can break down. Instead of offsetting each other, both asset classes may decline simultaneously.

For investors with substantial portfolios, this creates a meaningful risk. A simultaneous 15% drop across both equities and fixed income can significantly erode purchasing power — and recovering from that kind of drawdown can take years.

Defining tactical risk management

Tactical risk management takes a proactive, regime-based approach. Rather than adhering to a static allocation, it dynamically adjusts portfolio exposures based on current economic conditions, market trends and volatility signals.

For accredited investors, this approach offers three key advantages:

1. Volatility budgeting

Instead of targeting a specific asset mix, tactical strategies aim for a defined level of portfolio volatility.

When market turbulence increases, cap exposure to higher-risk assets is reduced, with capital shifting into "dry powder," such as cash or short-term Treasuries.

This helps mitigate sequence of returns risk, which can be especially damaging near retirement or liquidity events.

2. Regime-based allocation

Today's market is characterized by rolling recessions and rapid sector rotations. A static 60/40 allocation may leave investors overexposed to declining sectors or underexposed to emerging opportunities.

Tactical management uses macroeconomic indicators to tilt portfolios toward areas of relative strength — such as energy, commodities, private credit or infrastructure — while reducing exposure to weakening trends.

3. Asymmetric preservation

Tactical strategies often incorporate elements of convexity — seeking to capture a meaningful portion of market upside while limiting downside exposure.

For high-net-worth investors, the objective isn't simply to outperform a benchmark, but to ensure that major market corrections result in more controlled portfolio drawdowns.

The behavioral edge

One of the most overlooked advantages of tactical risk management is its psychological benefit. A static "buy, hold and hope" strategy may feel comfortable during bull markets, but it becomes increasingly difficult to maintain during prolonged downturns.

Many investors abandon their strategy at precisely the wrong moment — near market bottoms.

Tactical management introduces a structured, rules-based framework for decision-making. With predefined signals guiding when to reduce risk, investors can rely on data rather than emotion.

This transforms risk from something unpredictable into something actively managed.

Summary: Preserving the next million

Building wealth is not just about identifying the next high-growth opportunity — it's equally about avoiding significant losses. For accredited investors, access to more sophisticated strategies is often the defining advantage.

The 60/40 portfolio was well suited to a different era — one defined by low inflation and steady growth. Today's environment demands a more adaptive approach. Tactical risk management offers a way to stay aligned with current market realities, helping investors move from a passive position to one of active control.

In a volatile world, it's no longer enough to ride along. Investors need to take the wheel.

Dan Dunkin contributed to this article.

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

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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.

Fear gets a bad reputation in retirement planning.

We’re told not to be afraid of market volatility, not to panic when stocks fall, not to let inflation, health care costs, taxes, or Social Security headlines hijack our long-term plans.

That is good advice — up to a point.

But after decades of writing about retirement and now working as a retirement coach, I’ve come to believe that not all fear is harmful. Some fear is useful. Some fear is protective. Some fear is a signal that your financial life, family life, or future lifestyle deserves more attention. I call it "healthy fear."

The goal is not to become fearless; it’s to learn the difference between fear that paralyzes you and fear that prepares you.

Retirement is one of the few major life transitions in which people are asked to make a series of large, emotional and often irreversible decisions at almost the same time.

When should I stop working? Can I afford to spend more? Should I downsize? Should I help my children now or leave money later? What happens if one spouse needs care? What if the market falls early in retirement? What if I live to 95?

Those are not irrational questions. They are the questions serious people ask when the paycheck is about to stop.

The fear beneath the numbers

The most familiar retirement fear is running out of money. For many people, it remains powerful even when the math suggests they are likely to be fine.

Jason Dall’Acqua, founder and financial adviser at Crest Wealth Advisors in Annapolis, Md., works with many clients who have accumulated significant assets. Yet the fear of running out of money still shows up regularly.

Sometimes that fear is rooted in actual planning risk. Sometimes it comes from something deeper: a childhood where money was tight, parents never spent freely, a business setback, a divorce, a market crash, or decades of being rewarded for saving rather than spending.

Many successful retirees became successful because they were cautious. They lived below their means. They saved steadily. They avoided debt. They did not buy everything they could afford.

Then retirement asks them to reverse decades of behavior. Now the question is not "How much can I save?" It's "How much can I safely spend?"

That can be harder than it sounds.

Dall’Acqua says part of the work is helping clients see what their money can do while they are still healthy enough to enjoy it. A client may be able to afford a large family vacation, meaningful charitable gifts, or financial help for children and grandchildren. But they still may need reassurance that the plan can support those decisions.

That is where a healthy fear becomes useful. It does not say, "Never spend." It says, "Let’s understand what is sustainable."

Fight fear with facts and action

Mary Ware, managing partner and senior wealth adviser at Carnegie Private Wealth in Charlotte, N.C., puts it this way: "I try to help clients fight fear with facts and action."

Sitting in worry rarely helps. But turning worry into a planning conversation can, Ware says.

If you fear long-term care costs, start by learning what care actually costs in your area. What would in-home care cost? Assisted living? Memory care? A continuing care retirement community? How would you pay for it? From portfolio assets? Home equity? Insurance? Family support? Some combination?

If you fear burdening your children, don’t just worry privately, says Ware. Talk with them. Tell them what you want, what you are planning and what you do or do not expect from them.

If you fear market volatility, don’t move everything to cash. Ask whether your portfolio has enough liquidity to support several years of spending without forcing you to sell long-term investments during a downturn.

A little fear can lead to better questions. Better questions can lead to better planning.

Healthy fears: The 6 fears worth listening to

Some retirement fears deserve attention because they point to real planning gaps.

• Fear of outliving your money may prompt a better cash-flow plan, more realistic spending assumptions, a smarter Social Security claiming strategy or a more durable withdrawal plan.
• Fear of health care costs may prompt you to review Medicare choices annually, price long-term care options, update health care proxies and talk honestly with your spouse or adult children.
• Fear of inflation may remind you that "safe" assets are not always stable if they fail to keep up with rising costs.
• Fear of cognitive decline may push you to simplify accounts, name trusted contacts, update powers of attorney and make sure both spouses understand the household finances.
• Fear of family conflict may lead to clearer estate documents, better beneficiary designations and more transparent conversations about inheritance, charitable giving and expectations.
• Fear of losing purpose may push you to build a life before you leave a career — one with relationships, structure, health, community and reasons to get up in the morning.
  

These fears do not need to dominate your life. But they should not be ignored.

Don't let fear make the decision

The danger comes when fear stops being a signal and becomes the decision-maker.

That is when retirees go too conservative too early, hoard cash, delay retirement unnecessarily, refuse to spend, avoid family conversations, or stay in a house that no longer fits their health or lifestyle needs.

I understand the appeal of cash. It feels safe. It does not send alarming headlines to your phone. It does not drop 20% in a bear market. But too much cash can create a quieter risk: the slow loss of purchasing power.

The same is true with refusing to spend or the so-called "spending guilt." Some retirees are so focused on preserving assets that they miss the season of life when travel, family experiences, hobbies and generosity may be most meaningful.

"You can worry so much about outliving your money that you forget to enjoy your life right now," says Ware.

That does not mean spending recklessly. It means remembering that retirement planning is not only about avoiding bad outcomes. It is also about enabling good ones.

The retirement fears that arrive later

Some fears do not fully appear until after retirement begins.

At first, there may be relief. No commute. No boss. No meetings. No Sunday-night dread.

As a retirement coach, I ask clients to ponder the quieter questions. Why do I feel guilty spending money? Why do I miss being needed? Why do market headlines bother me more now? Why is my spouse adjusting differently from me? Why does every major decision — moving, helping the kids, buying a second home, joining a community — feel so permanent?

This is where retirement planning becomes more human than mathematical. A spreadsheet can tell you whether you can afford a trip. It cannot tell you whether you are emotionally ready to spend the money.

A Monte Carlo analysis can estimate the probability that your assets may last. It cannot tell you whether your adult children understand your wishes if your health changes.

A tax projection can show whether a Roth conversion makes sense. It cannot tell you whether you and your spouse have the same vision for the next 20 years.

That is why healthy fear should lead to better planning and communication, not just portfolio changes.

What healthy fear can do

When retirees take their fears seriously early enough, good things can happen. They may build a more resilient portfolio. They may create a cash reserve that helps them sleep during market volatility. They may update estate documents before a crisis. They may buy or reject insurance with clearer eyes. They may start giving money during their life instead of waiting to leave an inheritance. They may have the family meeting they have been avoiding.

They may also make better lifestyle decisions about whether to downsize, move closer to family, or take that major trip before turning 75 while they are still healthy.

These are not just financial decisions. They are life decisions with financial consequences.

Fear, in the right dose, can help you pay attention. The key is to ask: What is this fear trying to tell me?

If the answer is, "Sell everything and hide," take a breath.

But if the answer is, "Update your plan, talk to your family and financial adviser, understand your risks, protect your spouse and start living more intentionally," then maybe that fear is not your enemy.

Maybe it is one of the tools that helps you retire better.

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To help you understand what is going on in the economy 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...

Social Security’s cash shortfall is nearing, according to government accountants. The point at which the program’s trust fund of prior tax revenue runs out and legally triggers a 22% drop in payments is now estimated to hit at the beginning of 2033.

What can Congress do to head off disaster and keep the immensely popular program solvent? We expect lawmakers to find some solution. But anything they choose will be painful. The gap between what the Social Security Administration takes in taxes and what it pays out as benefits has been growing for decades. But before that, when the program was running a surplus, Congress spent the extra cash, leaving IOUs in the trust fund. Now, the Treasury is repaying those IOUs via money from general taxation and mounting debt issuance. Once the IOUs have been repaid, though, the feds can no longer pay more in benefits than they take in from Social Security’s dedicated payroll tax. Any fix will require more taxes, more debt or lower benefits.

Let’s look at some of the options on the table. Congress could let the Treasury sell more bonds to fill Social Security’s shortfall. That would sidestep the need for new taxes, but further blow up the deficit, which is already running at $2 trillion a year. Bond investors may balk at adding to it. Other common proposals get Congress partway to a solution. Among them:

• Lifting the full retirement age by a year eases the program’s tax gap by 12%.
• Raising the cap on earnings subject to the payroll tax would cover 26% of it. That’s assuming the cap rises from the present $184,500 of earnings to $330,000. Hiking the payroll tax one percentage point for everyone also yields 26% of the money Congress needs to find to keep scheduled benefits intact after 2033.
• Other options include reducing annual benefit increases and similar tweaks.

None solves the funding gap on its own, and all will be wildly unpopular among whichever voters find themselves paying more, getting less or doing both.

Given the difficult politics involved, we look for Congress to drag its feet and put off any solution for as long as it can. Social Security has long been known as the third rail of American politics. Calling for less-generous benefits or higher taxes is a surefire way to not get reelected. But the funding crunch can’t be wished away.

Ultimately, expect a mix of benefit cuts and tax increases, as lawmakers try to minimize the ways in which they antagonize voters. It’s too early to predict just how the pain will be distributed, but we would guess that upper-income folks will bear more of it than those lower down the income ladder. That may mean means testing for benefits, smaller annual increases, a higher cap on payroll taxes, etc.

This looming battle figures to dominate U.S. politics in the coming decade.

This forecast 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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You've done everything right, and you're still losing ground. That's the sentiment many are feeling, as rising inflation takes bigger bites out of your paychecks when you pump gas, pay your electric bill or go to the grocery store.

It used to be that you could turn to a high-yield savings account to outpace it. Yet, with inflation at 4.20% and not likely to cool soon, most savings accounts don't earn returns keeping pace with inflation.

"It’s not just about earning interest," says Eric Bernstein, President of LendFriend Mortgage. "When your savings are sitting idle, you’re missing out on the compounding power that could strengthen your homebuying profile. For those targeting a purchase, inflation isn't just an annoyance — it's a direct reduction in your future purchasing power."

Stop letting the status quo erode your wealth. Here are three strategic pivots to shield your cash from inflation and crush your debt for good.

1. Stop chasing yields

For a long time, savings accounts offered exceptional rates of return that outpaced inflation. In the interim, likely, those days are over. The ongoing war with Iran will keep fuel prices high. And even if there is a permanent resolution soon, energy prices might not stabilize fully into 2027.

The problem is that you need a high-yield savings account as part of your financial plan. Instead of shopping around for rates every few months, I'm recommending a savings account I've found that consistently offers good returns and has no monthly fees.

Once you reach your emergency fund and short-term savings goal, you want to shift your focus away from saving.

2. The debt-first pivot

Debt robs you of future wealth, especially if you're carrying high-interest debt. Credit cards and HELOCs also feature variable rates that can compound faster than any return you would earn on a savings account.

Therefore, when you view these debts as an emergency, you restore your purchasing power and improve your monthly cash flow.

Here's a debt repayment checklist to help you devise a plan that works:

• Make a list of all your outstanding debts, including balances owed, interest rates, etc.
• Use a budgeting app or a personal banker to see if you can free up any cash in your budget or curtail spending
• Use the Debt Avalanche method (focusing on the debt with the highest interest rate) first, or do the Debt Snowball, where you tackle your lowest balance to build momentum
• Set up automatic payments to ensure you never miss one
• Allocate any surplus cash from bonuses, commissions or tax refunds to pay off the debt with the highest interest rate first
• Review goals at least quarterly to ensure you remain on track to pay off debt

Along with debt repayment, now is a vital time to reevaluate how you approach buying everyday items.

Use the tool below, powered by Bankrate, to connect with a financial professional that can help you build a plan to reach your financial goals:

3. Spend with intention

Debt repayment takes center stage, but you must also plug any spending holes you have in your budget. To demonstrate, inflation won't show up as a line item in your budget, but rising per-unit prices create stealthy paycheck erosion.

I'm going to show you a few ways to rein in spending. First, everything in life seems to revolve around subscriptions, so this is a good place to start. Look for apps or memberships you haven't used much in the past few months and pause them. If you can go a few months without them, then you won't need them back.

And if you want to save on streaming moving forward, do this:

• Use your credit card and cell phone plan perks to lower total streaming costs
• Buy annual plans around Black Friday, where deals are usually the best
• Use shopping subscriptions like Walmart+, which offers a free membership to Peacock Premium or Paramount+ Essentials plan, you can switch options every 90 days

The next area is mastering the art of grocery shopping. Instead of impulse buying, plan meals. Shop ethnic markets for produce, as they tend to be cheaper and offer better quality than most grocery stores, in my experience.

Use warehouse clubs for pantry bulk supplies, where per-unit prices are often lower than at your regular markets.

Another tip seems simple, yet it's effective. Kiplinger personal finance writer Rachael Green reached out to her service providers to ask if they could lower her bills. She saved over $700 annually, so it definitely pays to reach out.

Lastly, if you find something you want to buy that isn't essential, implement the 24-hour rule. I do this often and find that after sleeping on it, I don't really need the item. This can help you rein in impulse spending, giving you more money to devote to debt repayment.

Ultimately, inflation can erode some of your purchasing power, but you can control its impact. The key is to move away from an all-savings strategy and implement other solutions impacting your finances.

Attacking high-interest debt with urgency and treating every dollar you earn with intention helps you not only save money but also buy back your financial freedom. These small shifts can help you weather the storm of higher prices so you can reclaim the ground inflation tried to steal.

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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 and retired 55-year-old public high school teacher in Midland County, Michigan. He reports his annual salary when he began teaching was $30,000. At retirement in 2020, it was $68,000.

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?

My wife and I hit our first million in our early 40s. In my mind, we owe a lot to a few people:

• One was a fellow teacher who, when I was a rookie, recommended a financial planner she used
• Another was a different teacher who told me to make sure I earned a master's degree
• The third was Clark Howard, whom I discovered by accident when his radio show followed a.m. radio Tigers games. Clark taught me tons in every one-hour show.

While I earned the degree and credits to "move to the right" on our school pay scale (it's an education thing), my wife worked in several different jobs, remaining in them until she either became bored/restless or saw another opportunity.

She eventually ended up at a giant chemical company in Midland for the last 17 years of her career.

What are you doing with the money?

We didn't do anything unusual. We did travel a bit on my summer breaks. We never upsized our house (paid $93,500 in 1997), never had kids (I like to say that, as a teacher, I raised other people's kids), and we drive our cars well over a decade. (Clark Howard once said that people who buy a new car every year or so end up working two years longer.)

The Fun Stuff

Did you do anything to celebrate?

Nope. Maybe a dinner out? I don't recall.

What is the best part of making $1 million?

I want to share both sides. The good is that sense of accomplishment. We both grew up in modest families: Our parents were blue-collar all the way.

It sure was nice learning that we didn't have to be "worried" about money. When our financial planner told us we could easily "self-fund" long-term care, I was shocked.

On a negative side, sometimes when I see people struggling, I do feel some guilt. If I had a different family or had gotten sick and so on, I could easily be in their shoes.

Did your life change?

I don't feel like it did in a big way, but you have to realize that we got the financial planner when we were in our mid-20s: Becoming financially secure was "part of the plan," so each year, we had a meeting with the financial planner, and we followed our progress together.

It wasn't like there was some surprise when we hit $1 million — we slowly and steadily saw it coming.

Does anyone know you're a millionaire?

No one knows for sure. I've been retired for five years (at 50), and I had a good handful of students asking me how I could be retiring before the other teachers.

I did lessons about saving and investing and being frugal and showed them spreadsheets with progressions, and the ones paying attention, I'm sure, knew or could guess.

Did you retire early?

At 50. Wife is still working, half-time, mostly for fun. She did retire from the chemical company a few years ago, but got recruited by former workmates to work for a different large agricultural/chemical company from home.

I think she's going to quit for real at 59½, which is a couple of years off.

She does something she calls "e-business." I'd try to explain it, but I don't get it.

Looking Back

Anything you would do differently?

No.

What advice would you give to your younger self?

Be open to people, usually older than yourself, who have potentially good advice. Watch out, though. How do you spot the bad advice?

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

No books. A few websites. But really, listening to Clark Howard for years allowed me to absorb more than I'd have gotten from most books.

Did you work with a financial adviser?

They recently changed their name to Rise Financial, in Mount Pleasant, Michigan. They've been incredibly important.

Did anyone help you early on?

It had to be the econ teacher I student-taught under (more about that later). He showed me how to trade stocks and connected me with a discount broker.

Yes, it did lead to my Enron loss (more on that later, too), but those experiences were extremely valuable.

Looking Ahead

Plans for your next $1 million?

None. After we hit $1 million, I honestly stopped paying attention. We might be past $2 million now; I don't know.

I do recall our financial planner showing me an extrapolation predicting we'd max out around $7 million in our late 60s, early 70s.

Will that become reality? No idea.

Having two pensions helps.

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

Slow and steady is the way. I remember during student teaching, I worked under an econ teacher who was a millionaire. He was an inspiration.

I wanted to invest in an environmentally positive company (this was before my first teaching contract and before having a financial planner), and I put about $500 into Enron. Yeah.

Anyway, let a pro manage your money. Yes, they take a slice, but it sure was nice not having to worry about stuff on my own.

When the market went down, that simply meant there were bargains out there.

Just for fun, a few years ago, I also put $500 into Canoo (electric vehicle startup). I had the chance to get out with $2,000-plus, but I hung around and watched it also disappear.

Do you have an estate plan?

We currently have a will set up, where 100% goes to three charities when we die.

We do give minor amounts annually to several animal charities, but we made the decision to save most everything, then leave it.

I've seen the "die with zero" stuff lately, but I don't know how I feel about that yet.

People don't think it'll happen to them, but things like accidents or cancer can wipe out nest eggs of many sizes. Quick, knock on wood.

What do you wish you'd known …

When you first started saving? How do you "pick" how much to save? Do you get to "pick," or is it just a matter of saving what is left over every month?

I know people who make tons more than we ever did and could easily save, but from their point of view, they don't believe they have anything "left over."

We aimed for saving 15%, and that worked out.

When you first started investing? My lesson with Enron taught me plenty. Diversify. Let a full-timer worry about it.

Before you retired? I had read many examples of folks retiring and losing their social contacts from work, so I tried to be prepared for that and have been moderately successful.

I keep socially busy enough for my liking, but I do miss a few friends still teaching.

When you first started working with a financial professional? Right away, I made peace with the amount they shaved off the top. Yes, it amounted to five figures, but I kept my eyes on the bigger picture.

Anything you'd like to add?

I never obsessed over money, but it's easy to imagine going to a dark place. … I feel like while my wife and I did work for what we have, chance was involved: We stayed healthy, never had a serious car accident, etc.

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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The aphorism "If you fail to plan, you're planning to fail" is commonly attributed to Benjamin Franklin.

Even if the words are his, he wouldn't have been thinking about income taxes when he wrote them. Those were introduced in 1862 to temporarily fund the Civil War. The 16^th Amendment made them permanent in 1913.

Today's income taxes are quite complex compared to the type of taxation people would have known in the days of the Founding Fathers. And you'll need to take an active, strategic approach to managing them if you want to optimize your financial position.

In general, for income of $150,000 or under, there are specific concerns and ways to approach the planning. For those with $500,000 and more in income, there are different concerns and approaches.

There is no doubt that proper tax planning helps at any level, but in the "messy middle," between $150,000 and $500,000, there is more complexity than necessary.

The challenges of active tax management

One of the biggest challenges in active tax management is synthesizing all the information to uncover what can reduce your tax burden as much as possible in the future, and not just in the current year.

You might be unaware of various deductions, state-specific rules and thresholds that can kick you into a higher bracket, eliminate or phase out a deduction, or cause other unforeseen expenses now or later.

It is a balancing act that is based on and informed by income sources, assets, ways assets are owned, taxation attributes of types of assets, financial goals, expectations about the future of taxes and sometimes even legacy intentions.

For many, the complexity requires a professional to dig into the details, ask the right questions and help devise the best strategy or mixture of strategies. An expert can provide objective analysis that identifies missed deductions and potential opportunities, ensures regulatory compliance, mitigates risks and increases net after-tax long-term wealth.

Whether you do your own tax planning or hire a tax professional, the important point is being intentional — making tax planning a priority in your financial plan (at the very least giving it equal importance to investment, income, legacy and protection planning) and making choices to ensure you are protecting as much of your savings and assets as possible for the long term for the best possible taxation.

Learning the tax implications of your income range

The starting point in active tax management is figuring out your likely income range and optimal tax strategies for now and for retirement. Tax rates can change in the future, but the important approach now is to identify an income range where you think you could settle tax liability at reasonable rates, avoid paying unnecessary taxes and set up a future where you have some flexibility to manage brackets later.

Let's focus on the tricky messy middle — those with between $150,000 and $500,000 in income. For the 2026 tax year, that range of income spans three tax brackets (22%, 24%, 32%) for married couples filing jointly and three for single/married filing single (24%, 32%, 35%).

That range points out the importance of active tax management not only because of the various tax rates, but also because there are numerous deduction phase-outs and additional tax triggers.

Here are just some of those (based on the 2026 tax year).

Net investment income tax (NIIT). This is an additional 3.8% federal tax on certain types of investment income. It applies to individuals with modified adjusted gross income (MAGI) exceeding $200,000 (for single filer/head of household) and $250,000 (married filing jointly/surviving spouse).

Once you cross into these ranges, every dollar of investment income becomes less efficient, making proactive tax planning significantly more valuable. The NIIT applies to income such as interest and dividends, capital gains (stocks, real estate, funds), rental and passive income and certain annuity income.

Long-term capital gains rates. Another negative impact of the NIIT: It effectively raises long-term capital gains rates to 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%), depending on your filing status and income level.

Qualified business income (QBI) deduction. The QBI deduction is a tax break allowing eligible self-employed individuals and pass-through business owners (partnerships, LLCs, S corps) to deduct up to 20% of their qualified business income from their personal taxes.

In 2026, the phase-out range (for some in specified trades or businesses) is $403,500 to $553,500 for married joint filers, $201,775 to $276,775 for single filers.

Child tax credit. The phase-out starts at $200,000 for single/head-of-household filers and $400,000 for married couples filing jointly. The credit amount is reduced by $50 for every $1,000 of income above these thresholds.

Deduction for those who are 65-plus. A new $6,000 deduction for individuals aged 65-plus phases out between a MAGI of $75,000 to $175,000 for singles and $150,000 to $250,000 for married joint filers. The deduction reduces by six cents for every dollar over the limits.

State and local tax deduction (SALT). With MAGI just over $505,000, you begin to lose the increased SALT deduction, but for now, for many with income under $500,000, a higher deduction may mean itemizing for the first time in a while.

Charitable contributions. Donations are only deductible to the extent they exceed 0.5% of your adjusted gross income (AGI). For example, with an AGI of $300,000, only donations over $1,500 are deductible as an itemized deduction, and then only if you itemize. There is now a small "above the line" deduction for those not itemizing. (A note for those in the top tax bracket: A limitation on itemized deductions comes into play for you.)

Increased Medicare premium surcharges. The income-related monthly adjustment amount (IRMAA) is a surcharge added to Medicare Part B and Part D. It is based on your MAGI from two years prior. Single filers with income ranges from $109,000 to $500,000+ pay progressively higher surcharges, as do those filing married jointly from $218,000 to $750,000+.

For example, a married couple filing jointly with a MAGI of $280,000 would pay approximately double for Medicare premiums relative to those who make $215,000.

This is an especially tricky one to navigate and is not felt until two calendar years later, based on how Medicare premiums are determined. You go over a threshold by just a dollar, and it could cost you hundreds, if not thousands.

The widow's tax penalty. This is a surge in federal income tax liability and Medicare premiums that occurs when a surviving spouse shifts from married filing jointly to single status, typically one year after their spouse passes away.

For higher-income individuals, the penalty can be severe because they often have income sources (pensions, IRAs, investments) that do not decrease when a spouse dies.

Most often, the surviving spouse spends about the same money and needs the same amount of funds to accomplish that, which means the same amount of income while the brackets have been cut in half. The IRMAA charges are higher at lower income levels, too, for the surviving spouse.

Take control and reap the rewards

Active tax management is no longer beneficial for just the ultra-wealthy; it is a necessity for anyone and beneficial for those navigating the increasingly complex $150,000 to $500,000 income range.

This bracket is filled with hidden triggers, phase-outs and surtaxes that can quietly erode wealth if left unaddressed. The difference between reactive and proactive planning can mean thousands of dollars kept or lost each year and over a lifetime.

Understand what you have, what you can do now and what you can do later, so you can either defer income or settle tax liability when it makes sense. That approach allows you to optimize your current and future tax situation.

By understanding how the various ingredients and thresholds interact — and by making intentional, forward-looking decisions around income, investments and timing — you can take greater control of your financial outcomes and your net after-tax dollars.

Remember, you do not get to spend pre-tax dollars — it is only the after-tax dollars you get to spend. As the great Yogi Berra once said, "If you don't know where you are going, you'll end up someplace else."

Dan Dunkin contributed to this article.

Appearances on Kiplinger.com were obtained through a paid public relations program. The author received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

The information contained herein is for educational purposes only. It is not intended to provide, and should not be relied on for, any tax, legal or investment advice. You are advised to seek the advice of a qualified professional prior to making any decision based on any specific information contained herein. The specific tax consequences of any investment or strategy will depend on your specific tax situation.

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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.

More Americans are growing concerned about their ability to afford retirement.

A recent survey from Northwestern Mutual found that 48% of Americans believe they'll outlive their savings.

Many also believe they'll need at least $1.46 million in savings to retire comfortably in 2026, a $200,000 increase from 2025.

It can be easy to hyper-focus on having a certain amount saved before retirement, but without a strategy to turn those savings into reliable income, even the most substantial nest egg may not last.

Whenever surveys like these come out, people shut down after hearing they'll need to have a million dollars in retirement savings. What's often missing from the conversation is how that number is actually calculated.

Many pre-retirees start by estimating how much monthly income they would need to live comfortably. Others use the income replacement ratio (IRR) method, which is calculated by estimating the pre-retiree's average gross salary during their final three years of employment and assuming they'll need about 60% to 80% of that amount each year.

Pre-retirees can also use the 4% withdrawal rule, which suggests they may be able to withdrawal about 4% of their retirement portfolio in the first year of retirement, adjusting that amount for inflation each year thereafter.

Some may choose to take a more detailed approach by building a retirement budget that includes both essential expenses and discretionary spending.

It's important to note that these methods are great starting points, yet they may not take into account market downturns, long-term care needs, reduced Social Security benefits, higher taxes or taking care of adult children.

While it can give you a ballpark range to aim for, setting a target savings number doesn't account for unexpected life events, such as a medical emergency, job loss or a sudden drop in the value of investments.

Oftentimes, these estimates are based on assumptions that do not reflect real-life conditions.

The transition from earning income to living off of savings brings uncertainty regardless of how much money is sitting in retirement accounts. Instead of receiving a consistent paycheck, retirees must rely on their savings to generate income.

This introduces a new set of challenges to navigate, such as withdrawal strategies, healthcare expenses and tax management. Rather than building savings, the focus shifts to sustaining them.

When it comes to creating a withdrawal strategy that works for you, start by developing an expense and budget plan.

• Make a list of your expected annual or monthly expenses, including mortgage or rent payments, property taxes, insurance premiums, utilities, healthcare expenses as well as credit card and loan payments
• Calculate your guaranteed income from sources such as Social Security or pensions.
• Subtract that amount from your annual expenses to determine how much money you'll need from retirement savings or investments to fill that gap.

Once you know how much income your portfolio needs to generate, you can utilize investment strategies. Depending on your goals, risk tolerance and timeline, this may include a combination of income annuities, bonds, certificates of deposit (CDs), dividend-paying stocks, alternative investments, reverse mortgages or other investment vehicles.

After establishing an asset allocation strategy, you can implement a withdrawal approach that aligns with your spending needs.

A strategy that could work for you

For some, the bucket withdrawal strategy might be the best approach. This method puts your savings into short-term, intermediate and long-term spending buckets.

Others may follow the guardrails strategy, which allows retirees to increase withdrawals when portfolio values are rising and reduce them when the market is down.

The "go-go, slow-go, no-go" spending framework may also be worth considering. This method acknowledges that spending patterns often change throughout retirement, with higher spending in the earlier, more active years, followed by slower spending in the later years as one ages.

An important part of retirement planning is preparing for the unknown. Whether it's accounting for inflation, market downturns or longer life expectancies, a comprehensive retirement plan is built to withstand various outcomes.

Even with a solid retirement plan, mistakes can still happen. What's important is being flexible.

Refusing to modify withdrawal rates or adjust investment strategy as life changes can have long-term consequences that can be difficult to recover from.

Market fluctuations can also have a significant impact on retirement income, particularly in the first few years of retirement. When markets decline, many retirees panic and sell off their investments, which can lock in losses that can be difficult to recover from, especially if a withdrawal strategy is already in place.

And, as history has shown, those who leave the market when it's down often miss out on the rebound.

Building a sustainable income strategy starts with understanding monthly expenses.

Once a budget is in place, retirement income can be generated through a combination of Social Security benefits and investments, structured to provide day-to-day sustainability and future growth.

Chris Cohan is a registered representative of and conducts securities transactions through CoreCap Investments, LLC. Chris Cohan is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. RJP Estate Planning is a separate entity and not affiliated with CoreCap Investments or CoreCap Advisors.

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

Stocks opened lower Friday as tech stocks slumped on reports that artificial intelligence (AI) giant OpenAI is considering delaying its initial public offering (IPO). And while the main equity indexes were in positive territory by lunchtime thanks to strength in defensive sectors, including healthcare and consumer staples, momentum faded into the close.

Late Thursday, The New York Times reported that advisers to OpenAI are encouraging CEO Sam Altman to delay the ChatGPT parent's offering until 2027. This comes amid recent volatility in SpaceX (SPCX, +0.2%), which went public earlier this month in the biggest IPO ever.

OpenAI confidentially filed its IPO paperwork with the Securities and Exchange Commission in early June, with some suggesting it could go public as soon as Q3 2026.

But a potential delay "is a rational, strategically sound decision by one of the most sophisticated management teams and advisory networks in the technology industry," says Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace.

Lango believes OpenAI would be going public "in a competitive environment where Anthropic's rapid progress has created legitimate uncertainty about long-term market share dynamics" and "in a market that just watched SPCX's $1.75 trillion IPO produce more volatility than anyone wanted."

The news sent the Nasdaq Composite down more than 1% at Friday's open, though the tech-heavy index closed with a more modest loss of 0.2% to 25,297. Memory chip stocks created some of the biggest headwinds for the Nasdaq, with Micron Technology (MU, -6.7%) and Sandisk (SNDK, -10.5%) both posting notable losses on Friday.

Elsewhere, the broader S&P 500 slipped 0.05% to 7,354, while the blue-chip Dow Jones Industrial Average — which will add Google parent Alphabet (GOOGL, -2.2%) to its 30-stock roster on Monday — fell 0.09% to 51,876.

ON Semiconductor sinks 24% on deal drama

ON Semiconductor (ON) was another notable tech loser on Friday, sinking 23.7% to make it the worst S&P 500 stock of the day, after the chip manufacturer said it will buy Synaptics (SYNA, -3.7%) in an all-stock deal valued at roughly $7 billion. This also marks ON's largest single-day drop since October 2023.

"By adding Synaptics' differentiated Edge AI compute franchise and strong portfolio of human-machine interface and wireless connectivity solutions, onsemi is expected to extend its capabilities beyond power and sensing to intelligent systems, delivering greater value to a broad range of end markets," ON Semi explained in the press release.

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The reaction from market participants is likely "an investor preference for a data center rather than edge enhancement," says B. Riley Securities analyst Craig Ellis. But Ellis believes it's "a logical product line extension play from data center AI toward the edge for significant SAM expansion into a $100 billion CY30 AI opportunity now including more humanoids and robotics."

Ellis reiterated his Buy rating on ON and lifted his price target to $135 from $118.

Moderna stock soars on sector rotation, drug news

On the plus side of Friday's ledger was Moderna (MRNA), which rose 12.6% to put it at the top of the S&P 500. In addition to a broader rotation into defensive stocks, the drugmaker got a boost after unveiling its first in vivo CAR-T autoimmune therapy program during Thursday's investor day.

"We do think there is investor interest more broadly in the oncology pipeline and new sources of future growth and diversification beyond infectious disease and COVID/Flu, etc.," says UBS Global Research analyst Michael Yee.

But the new programs discussed on Thursday won't be potential growth drivers until at least 2030, Yee says. As such, focus for now is on the company's INT cancer vaccine, with Phase III data expected later this year, and lowering operational expenditures to reach breakeven.

Yee has a cautious Neutral (Hold) rating on the healthcare stock and a $45 price target — more than 30% below its current price.

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Even the best-laid retirement withdrawal plans can’t foresee every expense that crops up. When you need extra cash for unforeseen costs, knowing where to turn can be paralyzing. After all, every financial move comes with tax implications that ripple well into your future.

Should you sell stocks in your brokerage account, or flip the family lake house? Is it time to finally get rid of the boat you keep meaning to take out, or should you drain a Roth IRA instead?

"When you need cash in retirement, it requires a balancing act," says Patrick Marcinko, a financial advisor at Bogart Wealth. "Don't rush. There's a timeline and a deadline, but you really need to take an objective look at all your assets and what the tax implications are."

In a perfect world, you’d have a cash reserve carved out for the unexpected. But if you don't, some assets are far better to tap than others. From brokerage accounts to lifestyle vehicles, here is a look at which assets to sell first when you need extra money.

1. Investments in your brokerage account

When withdrawing money in retirement, Marcinko says retirees must be mindful of the potential tax hit, which is why a taxable brokerage account is typically a better first choice than a traditional 401(K) or IRA. Long-term capital gains tax rates, which top out at 20% for the highest earners, are substantially lower than ordinary income tax rates, which apply to traditional retirement account withdrawals.

Taking money from the wrong bucket can easily push you into a higher bracket, triggering higher Medicare premiums and even taxes on your Social Security benefits. To avoid this, try to minimize capital gains by employing strategies like tax-loss harvesting and avoiding selling your most highly appreciated assets, says Patrick Shope, Certified Wealth Strategist and founder of Shope + Associates. It's better to pick and choose to ensure you aren't creating a bigger tax event than necessary.

2. High-fee and redundant funds, stocks and investments

If you're tapping a brokerage account for extra cash, start by trimming the fat. Sell off high-fee funds, redundant holdings and underperforming assets that could harm your overall portfolio over the long term.

However, be mindful of timing, says Marcinko. If you sell during a down market, you risk locking in losses. This causes sequence of returns risk, leaving your remaining portfolio with a smaller base to recoup those losses, which can cause a structural shortfall later in your retirement.

3. Concentrated stocks that have done well

Cutting back a very concentrated position may seem like a no-brainer, especially if you own big-name tech or AI stocks that have surged in value over the past few years. While it may make sense to sell the stock from a diversification perspective, you must carefully navigate the tax implications.

If the stock is held inside a traditional 401(k) or IRA, selling the asset won't cause an immediate tax event, but withdrawing the cash from the account will subject it to ordinary income tax. Even if the stock is in a Roth 401(k) or IRA, where withdrawals are tax-free, cashing out now permanently impacts the tax-free compounding advantage that would otherwise benefit you and your heirs. If you do sell a concentrated stock position in a taxable account, Shope suggests doing it gradually to minimize your annual tax liability.

4. Unused lifestyle vehicles (boats, RVs, motorcycles, and extra cars)

If you can't remember the last time you took your boat out on the water or your RV has sat in the driveway for years, it is safe to put those lifestyle vehicles up for sale. Finding a buyer won't always be a quick or easy way to get immediate cash, but it frees up significant equity.

Unused lifestyle vehicles represent unique vulnerabilities in a portfolio: they actively drain your cash flow through ongoing maintenance, storage and insurance expenses without bringing you actual joy.

Nonetheless, they aren't usually high on financial advisers' lists of what to tap first because they are illiquid, require work to sell, and can be emotionally hard to part with. "If it hasn't moved off the lot in 36 months, you have to commit to having more fun (with it) or selling it," says Marcinko.

5. Rentals or second homes

Real estate is another asset that isn't easy to sell. It carries substantial tax and family implications, especially if you originally planned to pass the property down to the next generation. However, it can also generate serious capital.

If you are considering selling real estate, the decision often comes down to whether the property brings you joy or stress. If it's the latter, then selling makes the most sense.

"If every time the phone rings you think something is wrong with the house, that's a lot of juice not worth squeezing," says Marcinko. "You want to get out of the real estate business and start living the retirement life."

Consider the big financial picture before selling

When selecting assets to sell, resist the temptation to just pick the stock with the biggest run this year or the fund with the highest expense ratio. Instead, put in the work and look at your entire financial picture, considering what the sale will mean from a tax and savings perspective, both now and in the future. Will it impact your Medicare premiums and Social Security benefits today? If you withdraw the money now, will you have enough to live on tomorrow?

"One of the biggest mistakes retirees make when they need cash in retirement is to sell whatever is the easiest to sell instead of what is the smartest," says Shope. "So much of it is around distribution planning, tax planning and Medicare planning. It's not just about having the money. It's about having the right money at the right time with the right tax situation."

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To help you understand the trends surrounding business and technology 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…

Artificial intelligence has a growing list of productive business uses. But it’s also leaving companies and individuals more vulnerable to cyberattacks.

The speed and volume of threats are the biggest shift. AI is “accelerating attacks from months to hours,” according to a Verizon data breach report from May. And recent AI advances have sparked new panic over critical digital infrastructure used by big banks, governments and other organizations.

Cutting-edge AI models stoke new fears

AI cyber fears hit a boiling point this year. It started with Anthropic’s Mythos AI model, which rapidly found and exploited security flaws in widely trusted software after its April launch. OpenAI has a similar capability. Both have partnered with security firms such as Cisco, Palo Alto Networks and CrowdStrike to help companies patch software. The U.S. government is very concerned and has recently banned foreign nationals from accessing Mythos.

Some advice for businesses:

• Don’t panic. The threat requires attention, but it’s not totally new.
• Focus on patching critical systems first and regularly push software updates.
• Make sure only approved people can use certain digital tools by having strong access controls.
• Use multifactor authentication — the process of combining a username with a password and a PIN or a biometric for logins.
• Physical security keys, such as Yubico’s YubiKeys, are another way to protect against unauthorized access.
• Other essential cyber protections, such as firewalls and antivirus scanners, help fortify defenses.

Note that AI will help find and fix flaws faster, too. “Bad guys can use AI to find vulnerabilities and rapidly create attacks, and software developers should be able to use the same technology to more rapidly (as in before releasing bad code) create hardened versions of code,” noted John Pescatore, director of emerging security trends at the SANS Institute, in an April newsletter.

Other leading AI threats that require urgent attention

The risks of agentic AI
Agentic AI does complex multi-step tasks, from building an app to managing inventory. “AI agents aren’t coming, they are already here,” said Saira Mohammed, Microsoft’s chief security advisor, at a recent Gartner cybersecurity conference in Maryland. 80% of Fortune 500 companies are deploying AI agents, according to Microsoft.

Agents risk data leaks, unauthorized transactions, compliance violations and other harms. “Agents can expose more data in five minutes than a careless employee could in a month,” said Mohammed. Companies can implement guardrails and a set of permissions to limit what’s allowed. Tools can track AI usage, risky actions, stolen credentials, off-hours use, data access and more. These include Microsoft Agent 365, which tracks agents from both Microsoft and third parties, and ReliaQuest, which has a tool to track Anthropic’s Claude.

Threats from AI chatbots
Chatbots such as OpenAI’s ChatGPT and Google’s Gemini have security risks that are hard to mitigate. These include users crafting prompts to bypass guardrails; the chatbots divulging company secrets or data; or AI systems being corrupted by data they’re trained on. Firms can start by blocking or restricting certain prompts (the text workers type into the chatbot). Specific AI tools can be blocked on company devices and networks, and sensitive company data can be blocked from public AI tools.

Also have an approval process for new uses of AI to ensure security, privacy and regulatory compliance, said John Murphy, a Gartner analyst, at the conference.

Fears about deepfakes
AI makes it easy to fabricate videos and photos of real or fake people. Deepfakes can infiltrate video conferences, place phone calls or side-step biometric authentication. One example is attackers impersonating an executive to request money transfers from an unsuspecting employee. Detection tools from vendors such as iProov, Pindrop and Reality Defender scan audio and video for fakes, but they’re not foolproof.

Studies show AI deepfake detection working better in the lab than in the real world, said Christine Lee, a Gartner analyst, at the conference. Companies should educate employees about the attacks, along with using strong login security. Low-tech approaches should be combined with high-tech ones, such as asking personal questions to verify someone’s identity.

Employees misusing AI
Company guardrails need to be built into chatbots and agents, as well as clear guidance for employee use. Specify what data and files workers are allowed to upload into AI tools, for example. Shadow AI, the use of unapproved AI at work, has surged over the past year and is one of the top ways company data is unintentionally leaked, according to the Verizon report.

Education helps, such as AI literacy training about possible attacks, data risks and how AI works. Even AI power users need training, as they may not realize all the cyber risks. Also track AI tools to uncover suspicious activity, ranging from data leakage to shadow AI.

Cyber best practices are still the best line of defense

In addition to these AI threats, there’s still ransomware, phishing attacks, software supply chain risks and much more.

Security experts say to focus on the basics. Inventory your data and devices. Encrypt data and keep backups. Discard unused data and IT. Use automated patching. Use e-mail filters to fight phishing. Change default credentials on IT systems and apps. Keep an updated incident response plan for data breaches. Have regular cyber training.

Trustworthy resources for AI threats include MITRE Atlas and NIST’s AI Risk Management Framework.

This forecast 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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Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions on amended returns and penalties for filing your tax return late. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Refund on amended return

Question: I filed Form 1040-X in early May to amend my 2024 federal tax return. I am expecting a refund, and I haven't received it yet. What is the delay?

Joy Taylor: I generally advise taxpayers to have lots of patience when filing an amended federal tax return with the IRS. The agency says you should allow at least 8 to 12 weeks for your Form 1040-X to be processed. However, in some cases, processing could take up to 16 weeks. Note that the IRS website also says that the Service is beginning to process paper-filed Forms 1040-X that were filed in April.

Maybe the processing speed will pick up later this year. The IRS's CEO, Frank Bisignano, testified before Congress that the IRS is using artificial intelligence to reduce processing times of amended returns to as little as three days. We'll see how this plays out over time.

You can use the IRS's "Where's My Amended Return" online tool to check the status of your amended return filing.

2. Amended return filing deadline

Question: I am thinking of amending my 2023 Form 1040, which I filed in February 2024. When is the due date for filing Form 1040-X to amend that return?

Joy Taylor: You generally have (1) three years from the due date of your original Form 1040 or (2) two years from the date you paid any tax due, if later, to amend it by filing an amended return on Form 1040-X. If you filed your original Form 1040 before its due date, it is considered filed on April 15. So, in your case, you would have to file an amended return no later than April 15, 2027.

3. Filing a late refund return

Question: I haven't yet filed my 2024 Form 1040. I plan to do so soon. I know I will get a refund when I do file. But will I have to pay any penalties for my late filing?

Joy Taylor: No, you will not have to pay any delinquency penalties for filing your 2024 Form 1040 late. That’s because taxpayers owe late-filing or late-payment penalties only if they owe tax, and you say you will receive a tax refund. Note that you must file your 2024 return by April 15, 2028, to get your refund. Otherwise, you have essentially ceded the money to the government.

4. Penalty abatement

Question: I haven't yet filed my 2025 Form 1040. I know I will owe tax, and I didn't request a filing extension nor did I pay the tax by the April 15 due date. I hope to file my return next month. This is the first time I have ever filed a late return with the IRS. How much will the agency penalize me for my late filing?

Joy Taylor: You may be in luck. The IRS has a little-known first-time penalty abatement policy. It will approve a waiver of the late-filing and late-payment penalties for filers who pay or arrange to pay the tax due and have been tax-compliant for the past three years. The penalties for late payroll-tax deposits and delinquent returns of S corporations or partnerships are also eligible for the waiver if the conditions are satisfied. But the estimated-tax penalty (also called the underpayment penalty) doesn't qualify for this penalty abatement program.

You may have to request the waiver. If you get a notice from the IRS showing a late-payment or late-filing penalty due but not abated, follow the instructions in the letter or call the phone number on the notice. The IRS has said that it will begin to automatically provide first-time penalty abatement to taxpayers who qualify for relief, starting with 2025 tax returns filed this year. But I am not sure whether the IRS has yet implemented this automatic procedure, which the agency will refer to as automatic exemption of penalties. If the IRS has implemented this program, then you should receive a letter after you file your late 2025 tax return, noting that the IRS didn't assess a penalty.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

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

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Google parent Alphabet (GOOGL) will replace Verizon Communications (VZ) in the Dow Jones Industrial Average at the opening of trading on Monday, June 29, making the 30-stock bastion of blue chip companies increasingly exposed to all things digital.

Alphabet is best known to consumers as the operator of Google and YouTube, but as S&P Global notes, GOOGL's diversified portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, self-driving cars and healthcare technology.

"Adding Alphabet will broaden and strengthen the DJIA's exposure to these dynamic areas of the U.S. economy," S&P Global said in a press release. "Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA."

The move refers to Alphabet's Class A shares. The Class C shares (GOOG) will not be in the Dow.

Telecom giant Verizon, which has been in the Dow since 1984, sounds like a pretty poky business by comparison. Apple (AAPL) replaced AT&T (T) in the Dow in 2015. You may notice a pattern here.

S&P Global notes that Verizon represents only one-half of one percentage point of the DJIA due to its low share price. The Dow is a price-weighted index, and thus "persistently lower-priced stocks have an immaterial impact on the index," S&P Global said.

As much interest as such events generate, being tapped for the Dow is more symbolic than material. After all, the S&P 500 is the main benchmark for U.S. equity performance. That's why the total amount of money passively tracking the index comes to around $12 trillion.

For example, the largest exchange-traded fund (ETF) in the world, the Vanguard S&P 500 ETF (VOO), has more than $1.7 trillion in assets under management alone. A comparable product for the DJIA, the State Street SPDR Dow Jones Industrial Average ETF Trust (DIA), holds just $43 billion in assets under management.

Lastly, as noted above, the Dow is weighted by price rather than by market cap. Although GOOGL has an outsized influence on the movements of cap-weighted benchmarks, such as the S&P 500, Nasdaq Composite and Nasdaq-100, at current prices, GOOGL will be as material to the DJIA as, roughly, Sherwin-Williams (SHW).

Nevertheless, the blue-chip average will now include many of the biggest names among tech and communication services stocks: Apple, Amazon.com (AMZN), Nvidia (NVDA) and Microsoft (MSFT), as well as Salesforce (CRM), Cisco Systems (CSCO) and International Business Machines (IBM).

Is GOOGL stock a Buy?

GOOGL joining the Dow is not in and of itself a reason to buy the Magnificent 7 stock. Nothing about its fundamentals has changed. And while shares are currently in a 15% drawdown from their May peak, Wall Street remains bullish.

Of the 63 analysts covering GOOGL surveyed by S&P Global Market Intelligence, 42 rate it at Strong Buy, 14 say Buy and seven call it a Hold. That works out to a consensus recommendation of Strong Buy.

The Street's investment case for GOOGL comes down to AI. (Duh.)

"Alphabet remains at a minimum competitive, if not a leader, in the development of generative AI, the rapidly developing and perhaps disruptive new computing paradigm," writes Argus Research analyst Joseph Bonner, who rates shares at Buy. "We continue to like Alphabet's underlying businesses and believe that GOOGL shares are attractively valued given the company's growth runway."

The bottom line: If you liked GOOGL before its accession to the bluest of blue-chip clubs, there's no reason to change your mind. But don't buy it just because it's a better fit for the Dow Industrials than Verizon.

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Financial experts recommend setting your asset allocation and sticking to it until your life circumstances change.

You should typically split your investments among equities and fixed-income investments and perhaps a pinch of commodities.

For example, you might decide on 49% in stocks, 49% in fixed income and 2% in commodities. If stocks have a big run-up and become, say, 60% of your portfolio, you should consider rebalancing to get back to your original allocation.

What's the best asset allocation for you is highly individual and depends on many factors, including age. Most people become more conservative as they enter retirement and cut back on stocks and increase fixed-income assets, which include bonds and bank certificates of deposit (CDs).

But they aren't the only choices. As the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and lifetime income annuities, I am a nationally recognized annuity expert and know all about those choices.

Fixed-rate deferred annuities — especially multi-year guarantee annuities, or MYGAs — provide safe, steady interest but without most of the drawbacks of bonds or bond funds. They also usually pay higher rates than CDs and are tax-advantaged.

These annuities can thus substitute for some of the bonds or CDs in your fixed-income allocation. But you need to be aware of liquidity and taxation matters before committing.

MYGAs avoid bond-market volatility

Issued by insurance companies in exchange for a single premium deposit, MYGAs share some similarities with bonds and even more with CDs. Like CDs, they earn a guaranteed rate of interest for a set period, usually two to 10 years.

But there are some key differences between bonds and fixed annuities, which have more guarantees and lower risk.

First, you can lose money in bonds. Both CDs and MYGAs guarantee interest and principal. But the market value of a bond fluctuates with changes in interest rates. If rates go up and you sell a bond prior to maturity, it will be worth less than its original cost. With an individual bond, you can avoid this problem by holding it to maturity.

Bond-fund investors don't have that option. If rates spike up after you buy a bond fund, the value will decline. Especially with a long-term bond fund, it may take many years to recover your full principal, if ever.

Second, owners of individual bonds (except Treasuries and U.S. agency bonds) also face default risk. A company or municipality may run into financial problems and fail to make timely interest or principal payments. A default means you could lose part or all of your investment.

In contrast, an annuity is guaranteed by the issuing insurance company. There is no federal deposit insurance, so buyers need to choose carefully. Insurers with strong financial ratings are considered very safe. Rating agencies like AM Best provide a letter grade to insurers.

With fixed annuities, the insurance company bears the underlying investment risk, shielding annuity owners from both bond market volatility and default risk.

Most corporate, municipal and government bonds pay out interest every six months. Normally, there's no ability to reinvest interest so that it can grow and compound at a high rate.

Bond funds let you reinvest your dividends automatically, but the price per share varies as interest rates change. You may have a gain or loss on reinvested dividends when you cash in the fund shares.

More advantages

MYGAs let you compound interest earnings. Reinvested interest gets the same rate as the base annuity, so the yield is guaranteed. Depending on the annuity, owners who need income can usually choose to receive interest earnings monthly, quarterly or annually.

Interest from corporate bonds and Treasuries is taxable in the year it's received. Annuities in nonqualified accounts (not in an IRA, a 401(k) or a similar plan) are tax-deferred.

All interest earnings left inside the annuity grow and compound tax-deferred until withdrawn, a significant tax-planning benefit. You can wait until retirement, when your tax bracket is likely to be lower, to start receiving payments. Without taxes taking a cut, your money compounds faster.

Many corporate and municipal bonds are callable. When rates are high, it may look like you nailed down a great deal. However, a few years later, when rates are lower, the issuer may call the bond back, and you'll have to reinvest the proceeds at a lower rate.

Fixed-rate annuities, like CDs, can't be called. The interest rate is set for the duration of the guarantee period.

Annuities also offer the ability to create a guaranteed lifetime income stream via annuitization. It's the only financial product that offers this option.

Liquidity and taxes

MYGAs have less unpenalized liquidity than bonds and bond funds. You can always cash them in, but you'll pay a penalty for early surrender. Second, interest earnings withdrawn from nonqualified annuities before age 59½, with a few exceptions, are subject to a 10% IRS penalty, plus ordinary income tax.

By the way, MYGAs can work very well as a fixed-income allocation in IRAs, providing "ballast" that counteracts the swings of the stock market while earning a high guaranteed rate of interest.

Because they have less liquidity than bonds, you probably wouldn't want to put all of your fixed-income investments in MYGAs. Among other things, it might limit your ability to rebalance.

But there is some liquidity. Many fixed-rate annuities let you withdraw up to 10% a year penalty-free. They're thus usually more liquid than CDs, which have stiff penalties for any early withdrawals.

Furthermore, you can stagger multiple MYGAs with different terms so that you'll have new ones coming up for renewal every year or two.

Not for everyone but maybe for you

MYGAs aren't right for everyone, but many people can benefit from their unique features. They provide steady, reliable interest that you can usually receive monthly, quarterly, semiannually or annually if you need the income. Or you can let interest accumulate in the annuity and grow tax-deferred.

MYGAs can also work very well in both IRAs and Roth IRAs.

There's nothing wrong with bonds and CDs. But take a look at MYGAs. One or more may be a good fit for you.

Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed, and lifetime income annuities. Ken is a nationally recognized annuity expert and widely published author. A free rate comparison service with interest rates from dozens of insurers is available at www.annuityadvantage.com or by calling (800) 239-0356. The firm also offers an income-annuity quoting service. There are no fees or charges for the firm's services; 100% of the client's money goes to work for them in their annuity.

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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.

Employees at companies that offer equity compensation have the opportunity to grow significant wealth, but it also comes with considerable risk.

Having too much of your net worth tied up in a single company makes you vulnerable to volatility and both short- and long-term losses, depending on the firm's success.

I've seen many employees with concentrated stock positions at tech companies and in other industries who feel conflicted about selling their shares. They may have an emotional attachment to the company or even feel disloyal selling off their shares.

Not to mention that selling all your shares at once can leave you with a large tax bill.

With a thoughtful approach, investors may be able to address the risks associated with a concentrated stock position over time, seek tax efficiency, and remain invested in their company and industry while managing potential downside exposure.

Stock concentration isn't always bad, but it needs a plan

Having a concentrated stock position isn't inherently bad. For many clients, that stock concentration is exactly how they built their wealth in the first place. The goal is simply to make sure your exposure is intentional and appropriate for your situation.

There's no set rule of thumb for how much of your portfolio your company stock should make up. I generally prefer people to keep their single stock concentration to less than 40% of their portfolio, but many advisers take an even more conservative approach, recommending closer to 10% or 20%. The younger you are, the higher percentage of your portfolio it can make up.

It also depends on your other assets. If you have substantial liquid assets, that 40% may be appropriate. But if you have real estate and other illiquid assets, a lower percentage is likely better.

Here are five strategies to manage your concentrated stock position:

1. Understand what you're working with

Stock compensation comes in several forms, including incentive stock options (ISOs), non-qualified stock options (NQSOs) and restricted stock units (RSUs). Each type comes with a different tax treatment, which affects your strategy.

Before you plan your next steps, you need a clear understanding of what you own, when it vests and how you'll be taxed on it.

2. If your company is still private, build your tax-loss bucket now

If your company is heading toward an IPO, you could have several years to start preparing for the large tax bill. Start creating a tax loss bucket in advance.

You can start harvesting your tax losses by selling losing positions in your investment account, capturing those losses, and reinvesting in a comparable security.

You'll slowly build up a reserve of losses you can use to offset the gains you'll earn when you eventually sell your IPO shares.

High earners with sufficient investable assets can also explore specialized investment strategies, such as direct indexing vehicles, to give you more control and help you create tax losses to offset your future gains.

3. You don't have to unwind everything at once

Many employees take one of two extremes when their company IPOs: They either sell everything right away, or they don't sell anything at all. Neither is necessarily the right option.

First, you'll typically be subject to some sort of lockup period, usually 180 days, during which you won't be allowed to sell any of your shares. But you can still use this time to prepare.

Once the lockup period ends, consider a staged selling strategy rather than selling everything all at once. You can spread your sales across multiple tax years to lower your tax bill, reduce the impact of net investment income taxes and, ideally, avoid bumping yourself into the next tax bracket.

By staging your selling over several years, you can significantly lower your tax burden and remove some of the emotional pressure that comes with trying to perfectly time your sale.

4. Consider an exchange fund for long-held stock positions

If you have a highly appreciated stock position worth at least $500,000 to $1 million, an exchange fund can help you diversify it without a large tax consequence. You exchange your concentrated stock position for a private diversified portfolio of securities contributed by other investors.

This strategy isn't appropriate for everyone, as it requires a large investment and a seven-year holding period before you can exit the fund with your holdings — an earlier exit puts you at risk of financial penalties and taxes.

However, if you're a candidate for this strategy, it can be a powerful tool to save a significant amount in taxes.

5. You can diversify without abandoning your industry

A common sentiment among employees with highly concentrated stock positions, especially in the tech industry, is a desire to remain heavily invested in the sector.

Depending on your risk tolerance, you don't have to abandon your tech holdings, but instead spread them out across more companies. You can preserve the potential upside without a single bad earnings report causing a major hit to your net worth.

The bottom line: There's no one-size-fits-all plan, but early planning is key

Stock concentration is common among employees at post-IPO firms or companies that offer equity compensation packages.

There's no one right strategy to address this situation, as it depends on your age, liquidity, risk tolerance and other key factors.

If your company is still pre-IPO, time is on your side, as you have plenty of time to plan your strategy. And if you work for a public company, you have options to exit your concentrated position with less of a tax impact.

Concentrated stock can create life-changing wealth; it's just important to have the right strategy in place to manage it.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. #2026-12426

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

Stocks were volatile Thursday as market participants weighed mixed signals from the tech sector. Wall Street also sifted through the latest inflation data, which came in better than expected, but is unlikely to change the trajectory for interest rates this year.

At the close, the blue-chip Dow Jones Industrial Average was up 0.1% at 51,920, while the broader S&P 500 was fractionally lower at 7,357 and the tech-heavy Nasdaq Composite was down 0.5% at 25,358.

Caterpillar (CAT) was the best Dow Jones stock today, adding 6.3% to bring its daily win streak to seven. The industrial stock is also the best-performing Dow component of the year, up nearly 85% so far, on expectations that the heavy equipment maker will capitalize on demand for the artificial intelligence/data center buildout.

UBS Global Research analyst Steven Fisher thinks power generation opportunities will remain strong in the U.S. "until either grid investment ramps up materially or large turbine production capacity ramps up."

And this should support Caterpillar's "earnings growth, along with continued dealer inventory build in construction, a pickup in the mining cycle, and more oil & gas customer investments."

However, Fisher has a Neutral (Hold) rating on the blue chip stock and a $900 price target — below its current price — noting that its upside potential is likely limited from here given CAT's strong run up the price chart.

Apple sinks on MacBook, iPad price hikes

Apple (AAPL), on the other hand, was the worst-performing Dow stock on Thursday, sinking 6.2% on news the company will be hiking prices on several of its products, including the MacBook and iPad.

Earlier this month, outgoing CEO Tim Cook warned that "price increases are unavoidable" given higher costs for components such as memory chips. And the company implemented the hikes today, raising prices for most of its products by $100 to $200.

For instance, as Tech Radar reports, the new MacBook NEO is now priced at $699, up from $599. And the 12-inch MacBook Air costs $1,299 to start, up from $1,099 previously.

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Passing these "increased costs onto consumers is emblematic of the substantial expenses associated with AI technologies, which have raised concerns about the capital-return prospects of the initiatives," says José Torres, senior economist at Interactive Brokers. "Also, the need to increase prices is undermining hopes that related projects will offer deflationary relief."

Micron soars 16% on memory chip demand

One company that is benefiting from higher semiconductor costs is Micron Technology (MU), which soared 15.8% — and gained $186 billion in market value — after the memory chipmaker reported its fiscal third-quarter results.

For the three months ending May 28, Micron said earnings rose to $25.11 per share from $1.91 per share in the year-ago period. Revenue surged nearly 350% to $41.5 billion. Analysts expected earnings of $20.05 per share on $35 billion in revenue.

"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," said Micron CEO Sanjay Mehrotra in the earnings release.

For fiscal Q4, the company guided for earnings of $31 per share at the midpoint and revenue of $50 billion.

"MU delivered another strong quarter, reinforcing our constructive view on memory's role in AI and the increasing supply-side discipline supporting a more durable cycle," says BofA Securities analyst Vivek Arya.

Even with the tech stock up more than fourfold for the year to date, Arya believes its "valuation remains compelling," and raised his price target to $1,550 from $1,500 — representing implied upside of 27% from current levels.

PCE comes in better than expected, but keeps rate cuts out of reach

In economic news, the Bureau of Economic Analysis (BEA) this morning said the Personal Consumption Expenditures Price Index (PCE) — the Federal Reserve's preferred measure of inflation — rose 0.4% from April to May and was 4.1% higher from the year prior.

Core PCE, which excludes volatile food and energy prices, was 0.3% higher month over month and up 3.4% year over year.

"Oil prices are heading lower but the inflation problem remains, as core PCE is up 3.4% since last year and showing no signs of abating," says Sonu Varghese, chief macro strategist at Carson Group. "This isn't about energy and tariffs either, as AI-related bottlenecks are also pushing inflation higher."

Varghese believes that the Fed's job only gets harder from here, especially as the labor market continues to improve. "But we think the committee will avoid rate hikes this year as a majority wait for inflation to pass, allowing the economy (and markets) to run hot."

Futures traders, however, expect the next move to be a rate hike. According to CME Group FedWatch, betting odds are for the Fed to raise the federal funds rate by a quarter percentage point by year's end.

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As 2026 rolls on and families prepare for the upcoming school year, household budgets may face a tight squeeze.

Inflation continues to drive up everyday expenses like groceries, gas, and utilities. But for parents of young children, the most significant financial burden often comes from early childhood care.

The years from birth to age five are typically the most expensive. This is largely driven by center-based infant and preschool care, which contributes to an average annual cost of $29,325, according to a recent LendingTree study.

However, local tax structures and regional economics may influence how much you pay.

In some tax-friendly states, the average annual price of full-time care drops closer to $18,000 — roughly 38% below the LendingTree average. Yet a lower childcare price tag doesn't necessarily help if high sales taxes or the cost of living drag your budget back down.

To see how different regions balance these trade-offs, we analyzed ten low-tax states for middle-class families and ranked them by early childcare costs and cost-of-living indices.

Tax-friendly states ranked by childcare affordability

To determine the baseline for "affordability," we looked at how much families spend on state taxes as a percentage of their income (basing "middle-class" on the latest U.S. Census Bureau median household income data).

Next, center-based data from Child Care Aware® of America (CCAoA) was used to measure average annual early childcare costs for one child (ages 0 to 4) as a percentage of the median household income for a married couple.

The childcare cost calculations account for five key factors:

• Infant care pricing
• Toddler care pricing
• 4-year-old preschool pricing
• Before- and after-school care
• Summer programs

Kiplinger factored in the U.S. Bureau of Economic Analysis (BEA) cost-of-living index, which uses regional price parities (RFPs) to measure local prices for essentials like housing, food, transportation, and healthcare. On this scale, 100 represents the national average; a score of 88 means a state is 12% cheaper than average, while 102 indicates it is 2% more expensive.

Property tax figures were sourced from PropertyShark.

Yet it's important to note that family size, educational opportunities, and other factors can influence how "affordable" a state is, and "middle-class" may be subjective. Consult with a tax professional for your specific financial situation.

Note: Where before-and-after-care or summer program pricing data were unavailable, Kiplinger used a national average as a baseline.

1. South Dakota: Best overall value and lowest cost-of-living

Average annual childcare costs: $17,030

Childcare costs as a % of income: 14.2%

Cost-of-living index: 88.6

If you're a parent and you hate paying taxes, South Dakota is the most affordable state on our list for middle-class families. Everyday expenses track about 11.4% below the national average, potentially saving new parents on must-haves like formula and baby clothes.

Total annual childcare costs average around $17,030 (well below the national average, according to LendingTree), helping keep the overall income-to-cost ratio manageable at 14.2%.

Middle-class family taxes to consider:

• There is no personal income tax in South Dakota, allowing families to take home more of their earnings.
• To compensate for this, the state relies heavily on property taxes, which hover right around or above the national average, per PropertyShark data.
• Additionally, the 4.2% state sales tax applies to both groceries and diapers — everyday essentials that many other states exempt.

The bottom line? South Dakota's no-income-tax policy and low property taxes could help with your long-term family tax planning, but a large volume of goods for young children could offset some of your state tax savings.

2. Louisiana: Low cost of living and childcare costs

Average annual childcare costs: $18,252

Childcare costs as a % of income: 15.6%

Cost-of-living index: 88.2

Louisiana claims the second spot on this list thanks to its low cost of living. Average annual childcare costs total just over $18,200, consuming a modest 15.6% of median household income for married couples. Plus, the everyday living expenses — like food and gas — are 11.8% cheaper than the national average, according to the BEA.

Middle-class family taxes to consider:

• While considered a "tax-friendly" state for the middle-class family, Louisiana barely made our list, since its average combined sales tax is the highest in the nation at a whopping 10.11%.
• On the other hand, property taxes are among the lowest in the country, with a median bill of just $1,180 — significantly below the national average of $3,119.
• And the Bayou State has a low flat income tax of just 3% in 2026, among the lowest in the nation, according to the Tax Foundation.

The bottom line? If you don't mind higher sales taxes for lower property tax bills, a potentially cheaper cost of living, and reduced childcare costs compared to other states, Louisiana could be the second "most affordable" state to live in.

3. North Dakota: Average taxes, but cheaper childcare affordability

Average annual childcare costs: $21,292

Childcare costs as a % of income: 16.2%

Cost-of-living index: 89

North Dakota secures third by offering low costs and high savings. Families spend roughly 16.2% of their income on early childhood care in the Peace Garden State, a rate lower than most on this list. Plus, below-average costs for healthcare and groceries are common in the state, per the BEA.

Middle-class family taxes to consider:

• Unlike its southern neighbor, North Dakota levies a state income tax, though it's quite low, ranging from 1.95% to 2.5%.
• The state sales tax is a moderate 5%, and, importantly, groceries are state-tax exempt.
• Property taxes are also pretty average compared to the national median, according to PropertyShark data.

The bottom line? North Dakota's financial landscape may represent a stable, "middle-of-the-road" path for middle-class families, with few tax "surprises" and potentially low early childcare costs.

4. Wyoming: Low cost of living balances the national average

Average annual childcare costs: $21,080

Childcare costs as a % of income: 17.5%

Cost-of-living index: 92.7

Early childhood care costs can be low for Wyoming families. Center-based infant care averages just $13,120 annually, and summer care programs typically run below $2,400, according to the CCAoA. Plus, the overall cost-of-living index sits 7.3% below the national average.

Middle-class family taxes to consider:

• Wyoming has no state income tax, which can provide relief for middle-class paychecks.
• Also, the state features very low property taxes, with a median property tax bill of just $1,767 (significantly below the national average of $3,411), according to PropertyShark.
• On the other hand, Wyoming still taxes diapers at its moderate 4% state sales tax rate.

The bottom line? Wyoming can provide significant tax relief, especially if you hate paying high state income taxes or property taxes; daily essential costs can also remain low, unless you venture into more rural areas.

5. Alaska: High local costs drag down cost-to-salary ratio

Average annual childcare costs: $20,178

Childcare costs as a % of income: 14.7%

Cost-of-living index: 102.4

Alaska features the second-lowest childcare cost-to-income ratio on the list, requiring just 14.7% of a typical married couple's salary, per the latest data from CCAoA.

But it ranks fifth overall because its remote geography significantly inflates the cost of daily necessities like food and heating utilities, pushing its overall cost of living above the national average.

Middle-class family taxes to consider:

• Alaska is another no-income-tax state, which means capital gains, salaries, and bonuses are exempt from state tax.
• The Last Frontier also levies no statewide sales tax, according to the Tax Foundation.
• However, because Alaska doesn't collect income or sales tax, local and property taxes can vary widely by region.

The bottom line? For families who can navigate long winters and high retail prices, Alaska's early childhood programs can be affordable depending on the area and household income level.

6. Florida: Moderate costs with a higher cost-of-living

Average annual childcare costs: $19,520

Childcare costs as a % of income: 16.9%

Cost-of-living index: 103.4

It might come as a surprise that Florida lands in the bottom half of the rankings on our list.

But the Sunshine State's cost of living sits nearly 4% above the national average according to the BEA, driven up by rising costs in healthcare, food, and utilities. According to the CCAoA, childcare accounts for 16.9% of the median family income, providing some relief for middle-class budgets.

Middle-class family taxes to consider:

• All forms of personal income are state tax-free, which is one of the reasons people move to Florida.
• State officials are also looking to greatly reduce or even eliminate property taxes, though for now, the median bill is just below the national average, per PropertyShark.
• The statewide sales tax rate is relatively high, at 6%, yet diapers and groceries aren't subject to state sales taxes.

The bottom line? While the cost of living on items like groceries, home insurance premiums, and healthcare is higher in Florida than in other places on our list, middle-class families may still find early childhood care affordable in less expensive areas.

7. Arizona: Higher cost of living, but low taxes on everything else

Average annual childcare costs: $21,909

Childcare costs as a % of income: 18%

Cost-of-living index: 100.7

Arizona's placement reflects a combination of an above-average cost-of-living index and steep upfront childcare fees.

Per the CCAoA, middle-class families can expect to dedicate 18% of their annual income to early childhood care, which is only 2% below the national average. Center-based programs for infants and toddlers are more costly than other states so far, averaging $16,384 and $13,742 per year, respectively.

Middle-class family taxes to consider:

• Arizona has a flat income tax rate of 2.5%, making personal individual returns perhaps a little simpler for families.
• Plus, the Grand Canyon State has some of the lowest property taxes in the nation, with a median bill of only $1,879 — 55% below the national average, according to PropertyShark.
• At the same time, the state's 5.6% sales tax is relatively average; Arizona still taxes diapers.

The bottom line? Despite a higher cost of living, Arizona could be an affordable option for parents with slightly higher incomes who want lower property tax bills. But the overall financial and tax environment requires careful cash-flow management for growing families.

8. Tennessee: Low childcare costs except in the summer

Average annual childcare costs: $23,371

Childcare costs as a % of income: 20.8%

Cost-of-living index: 91.9

Despite boasting a relatively low cost-of-living index that is 8.1% below the national average, Tennessee ranks low on our list due to the state's shortage of licensed childcare facilities. Because of this, summer childcare costs alone can reach over $8,000, pushing total annual care to nearly 21% of a family's household income, per CCAoA data.

Middle-class family taxes to consider:

• Tennessee has no state income tax, meaning your wages, salaries, and tips are state tax-free.
• Property taxes are also among the lowest in the U.S., with a median bill of around $1,442, according to 2026 PropertyShark data.
• High sales taxes are the norm in the Volunteer State. At 7%, Tennessee's base rate is the second-highest in the nation and applies to diapers. Groceries are also taxed, although at a lower rate of 4%.

The bottom line? Tennessee's lower cost of living offers potential savings on most everyday expenses. However, middle-class families with young children should factor in the higher sales tax rates and elevated summertime care costs into their annual budgets.

9. Nevada: Middle ground cost of living, with higher childcare costs

Average annual childcare costs: $24,102

Childcare costs as a % of income: 21.1%

Cost-of-living index: 100

Nevada represents a somewhat flat baseline for everyday living, with housing, food, and medical costs landing right around the national average, according to the BEA. Yet early childcare eats up more than one-fifth (21%) of the median middle-class household income, making these costs a heavier burden than in other areas on our list.

Middle-class family taxes to consider:

• Like many other states on this list, Nevada has no state income tax, helping middle-class families keep their entire paycheck (at least from a state tax perspective).
• Per PropertyShark data, property taxes are also low, with a median bill of about $2,027.
• Sales taxes are a bit higher, around 6.85%, though Nevada doesn't tax groceries or diapers at the state level.

The bottom line? Nevada families enjoy zero state income tax and highly reasonable property taxes, which offer some relief, but the high cost of childcare means that while families keep their full paychecks, a substantial portion is immediately redirected to local care facilities.

10. Washington: Least affordable, high cost of living

Average annual childcare costs: $28,436

Childcare costs as a % of income: 19%

Cost-of-living index: 107

Washington closes out the list as the most expensive tax-friendly state for middle-class families with young children. A cost-of-living index of 107 means families pay a 7% premium on necessities like housing and utilities.

While high median incomes keep the childcare-to-salary ratio at 19%, the annual average childcare cost of $28,436 makes it the most expensive baseline care price on the list, according to the CCAoA.

Middle-class family taxes to consider:

• Though there is no personal state income tax, Washington imposes a 7% to 9.9% tax on long-term capital gains over $262,000.
• The Evergreen State also has a high sales tax, ranking among the highest in the nation.
• Property taxes, too, are expensive, with a median bill above the national average at $4,556, according to PropertyShark data.

The bottom line? Although childcare costs are comparable to a couple of other states on this list, property taxes, an elevated cost of living, and high sales taxes create significant financial hurdles for middle-class families.

Read More

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If you've been considering a Sam's Club membership, this may be the best deal you'll see all year.

Through July 5, new members can sign up for a standard Sam's Club membership for just $15 for the first year, a $45 discount from the regular $60 annual fee. Shoppers who want additional perks can join Sam's Plus for $50 for the first year, saving $50 off the regular price.

The promotion comes just weeks after Sam's Club raised membership prices, making the discount even more attractive for shoppers considering a warehouse club membership. Whether you're stocking up on groceries, filling up at member-priced gas stations or preparing for summer entertaining, the deal lowers the cost of trying Sam's Club while giving shoppers access to a range of member benefits.

Sam's Club membership: $15 for the first year

The standard Club membership is designed for shoppers who want access to warehouse pricing without paying for premium perks.

For $15, members receive:

• Member-only pricing throughout the warehouse
• Discounted fuel at Sam's Club gas stations
• Scan & Go checkout through the Sam's Club app
• Free curbside pickup on eligible orders
• Two membership cards per household
• Access to Instant Savings offers

If your primary goal is saving money on groceries, household essentials, seasonal items and gas, the $15 introductory offer may be all you need.

Sam's Plus membership: $50 for the first year

Frequent Sam's Club shoppers may find additional value in the Plus membership, which is currently discounted to $50 for the first year.

The Plus membership includes all Club-level benefits, plus:

• 2% Sam's Cash back on eligible purchases
• Free shipping on eligible orders over $50
• Free same-day or next-day delivery on eligible orders over $50
• Exclusive shopping hours from 8 to 9 a.m. every day
• Additional pharmacy savings
• Additional optical savings
• Tire and battery center discounts

The extra perks can help offset the higher membership cost, particularly for shoppers who regularly place online orders, use pharmacy or optical services or spend enough to earn Sam's Cash rewards.

Is the Sam's Club deal worth it?

At $15, the standard membership is one of the lowest-priced warehouse club promotions currently available and offers a low-risk way to test whether Sam's Club fits your shopping habits.

The Plus membership requires a larger upfront investment, but shoppers who frequently use delivery services, earn Sam's Cash rewards or take advantage of pharmacy and optical savings may find the upgraded membership pays for itself over the course of the year.

The limited-time promotion ends July 5 and is available only to eligible new members.

Related Content

• 5 Hidden Sam's Club Perks That Can Save You Time and Money
• Costco Vacation Deals: Are They Worth It?
• How Much You Could Save on Gas with Costco, Walmart and Other Memberships

The conventional personal finance playbook for retirees with 401(k)s is to trim exposure to stocks and dial down risk as they age. But many savers over age 70 are defying that rule, packing their 401(k)s with more stocks than experts recommend, according to Fidelity Investments.

Half of Fidelity 401(k) plan participants aged 70 or older have a "higher equity allocation than suggested," more than any other age group and well above the 34% average for all ages, according to Fidelity's 1Q 2026 retirement analysis report. Similarly, nearly four of 10 401(k) savers aged 65 to 69 also have a larger helping of stocks than investment pros recommend.

Whoa, Nellie! Is retirees' love affair with stocks a ticking time bomb that threatens to blow up their nest egg if the market tumbles? Or a shrewd financial move designed to boost returns so they don't outlive their money? Or is it simply a case of taking their eye off the ball and not keeping track of what they own and failing to regularly rebalance their 401(k) holdings?

All of the above, say financial advisors. And that's mainly because every retiree's financial situation is different.

"There's really no right or wrong answer" when it comes to the proper size of a stock weighting in a retirement portfolio, says Mike Shamrell, vice president of thought leadership at Fidelity.

Adds Jared Chase, a financial adviser at Signature Estate & Investment Advisors (SEIA): "I wouldn't want to put people into a box simply based on age." A 50% stock/50% bond portfolio, for example, might not be right for everyone. The optimal asset mix, says Chase, should be based on a retiree's goals, objectives, and risk tolerance.

Shamrell stresses that a "suggested asset allocation" is just that: a suggestion.

For its study, Fidelity compared a 401(k) saver's stock allocation in their overall portfolio with the stock weighting (e.g., equity glide path) in Fidelity's age-appropriate target-date Freedom Funds.

Consider, for example, someone who retired in 2020 at age 65 who is now 70. The total stock weighting in the Fidelity Freedom 2020 Fund (which corresponds to the investor's 2020 retirement date) is 50%. So, a 70-year-old retiree who holds a higher percentage of stocks (say, 60% or 70%) than the recommended 50% weighting in Fidelity's target-date fund is seen as having "a higher equity allocation than suggested."

As the table below shows, half of those aged 70 and older hold more equity than is recommended. By contrast, only 15% of those in their late forties are overweight in equity investments.

Source: 1Q 2026 Fidelity Retirement Analysis

Shamrell says retirement savers can use the equity weightings in age-appropriate target-date funds as a "yardstick" to estimate how much stocks are in professionally managed funds that take a saver's age and risk tolerance into account.

Fidelity conducted the asset allocation analysis as part of an awareness campaign.

"We just want everybody to be aware (of how big a stock exposure they have)," said Shamrell. "The report is sort of a trigger to check their allocation. We don't want to have a situation where individuals have more stocks than they are comfortable with in the event the market goes down. We don't want people to get caught off guard and be like, 'Hey, why did my balance drop so much?'"

Why retirees are overweight stocks

There are many reasons why a retiree in their 70s may hold a bigger-than-recommended helping of stocks, financial advisors say.

Overconfidence. It's not uncommon during bull markets, when market returns are strong, for behavioral biases to impact decision-making, says James Demmert, chief investment officer at Main Street Research. Overconfidence can cause investors to let their money ride when stocks are performing well. "As bull markets mature, investors gain more confidence," says Demmert. "Optimism turns to excitement as the market continues to go up, and they start feeling really smart."

Market appreciation. The mere fact that stock prices are rising can push a stock allocation above its recommended weighting. And if an older investor is managing their own money (which Fidelity says many do) and isn't regularly rebalancing their portfolio to keep their stock and bond weightings aligned with their financial plan, those weightings can easily get out of whack. "Just the market going up can take somebody from 50% stocks to 60% stocks," says Demmert.

Less need for income. A retiree who has a large cash hoard or ample income streams, such as a pension, Social Security and annuities, to cover most or all of their monthly living expenses can use their 401(k) money bucket for longer-term goals, says Shamrell. "If they've got a large pool of savings to fall back on, they can maybe afford to be a bit more aggressive," says Shamrell. If the market is in a steep downturn, retirees whose income needs are covered can avoid selling stocks at depressed prices to generate income.

Chasing returns. Bad investment behavior can also be to blame, says Jason Grover, a financial planning specialist at Grover Financial Services. Buying stocks just because they are going up doesn't always end well. "Chasing returns and just letting things ride, and not rebalancing portfolios," amounts to bad behavior, says Grover. "Don't look at your portfolio as if the stock market never loses."

Fear of running out of money. Retirement these days can last 20 or 30 years, placing a premium on returns that outpace inflation. Stocks fit the bill, as the long-term average annual return of equities is about 10%, handily topping inflation. "A large retirement risk for many affluent households isn't volatility, it's becoming too conservative too early (in life) and failing to maintain purchasing power," says Chase.

Putting too much money in lower-yielding assets like bonds and cash makes it harder to keep up with annual cost-of-living increases, adds Chase.

The risks of retirees loading up on stocks

Suffering outsized losses. The more stocks a retiree holds, the more money they can lose if the stock market suffers a steep decline, Demmert warns. "When these really terrible markets occur, or a bubble pops, the people that can least afford the losses — retirees — are the ones that get hurt the most," says Demmert.

Selling into a falling market. Retirees who rely on the stock portion of their 401(k) for everyday income risk having to sell their equity holdings at depressed prices to pay the bills. "The real risk isn't volatility, it is being forced to sell during volatility," says Chase. Liquidating stocks in a down market can more quickly deplete a nest egg as more shares are needed to raise cash and, as a result, fewer shares are left in the retirement account to benefit from the eventual market rebound.

3 ways retirees can dial back stock exposure

Let's say you read this story and realize that your 401(k) has more stock exposure than you are comfortable with. What can you do?

Here are some easy fixes to get your equity exposure back to where you want it to be:

1. Rebalance. If your plan calls for 50% stocks and 50% bonds and your equity weighting is now 60%, sell equity holdings and put the proceeds into bonds to get back to your preferred asset mix. "We encourage people to take a look at their asset allocation and make sure that it is at a level they want it to be at," says Shamrell. If you're unsure of how big an exposure to stocks you should have at your age, you can get a general idea by looking at the stock allocations in target-date funds that coincide with your retirement date, says Shamrell. Read our comprehensive guide on How to De-Risk Your Portfolio.

2. Sell into rallies. When trimming stock exposure, take advantage of big up days or periods when the market is climbing, says Demmert. You can also set up a regular distribution schedule, such as monthly, until your allocation is back in line with your targets. "Dollar cost average out of the market," says Demmert. This selling strategy helps smooth out market volatility, so you don't get spooked into selling at a market low. "That tends to work psychologically for most people," says Demmert.

3. Always have ample cash reserves. A stock-heavy asset allocation only hurts if you need to sell stocks to raise cash in a down market. One way to avoid that is to keep at least two years' living expenses in a liquid, cash-like account that isn't affected by market swings, says Grover.

When you have ample cash reserves, you can invest more aggressively in stocks and hold more equities without the downside risk of having to sell in a down market.

"I like the fact that retirees are taking on more equity risk in their portfolio," says Grover. "Because owning the great companies of the world is what provides growth."

And growth is good, no matter if you're a 25-year-old investor, a 45-year-old investor, or a 70-year-old investor.

Read more on managing retirement savings

• Top 4 Retirement Withdrawal Strategies to Maximize Your Savings
• The Average Gen X 401(k) Balance Kind of Bites
• How to Retire at 62 and Build a Financial Bridge to a Maxed-Out Social Security Check at 70
• The Sequence of Returns Risk Could Shrink Your Retirement Nest Egg

Is your wealth manager invested in your goals or the next commission? It's an essential question every investor should ask.

Finding the right fit amid the crowded landscape of options can feel overwhelming, especially when choosing the right partner to grow your wealth. Thankfully, some of our readers have already done the heavy lifting for you.

For the Kiplinger Readers' Choice Awards, over 4,000 readers ranked the best wealth managers based on overall satisfaction, quality of advice, retirement planning services and more categories in an online survey conducted this past winter on Kiplinger.com.

Among the standouts this year, UBS Wealth Management was the overall winner for wealth managers. Here are the reasons why our readers chose UBS as the best wealth manager.

1. A personalized approach to financial planning

Some wealth managers like to employ a one-size-fits-all strategy, tailoring solutions around higher commissions than taking your needs into account.

However, UBS takes a much more personalized approach to getting to know you. It aims to learn what wealth really means to you by asking you these five questions:

1. What do you want to accomplish in life?
2. What do you want your legacy to be?
3. How do you plan to achieve your life's vision?
4. Who are the people that matter most to you?
5. What are your main concerns?

This begins the UBS Wealth Way conversation. Once you answer these questions, UBS works with you to establish direct goals that align with your answers. Doing this gives you confidence that you have a trusted partner who not only takes the time to listen to you but who also tailors solutions that match your goals and values.

2. Expert service and advice at every life stage

Some wealth managers help you set goals, and that's where their work stops unless you contact them. UBS, on the other hand, is there to take a proactive approach in helping you reach your goals, even as your life changes. The main theme among readers' comments was how exceptional the service was, and the advice they received was excellent.

Their team of wealth experts can help you craft a full suite of goals and adjust them as your life changes. Whether you're a new investor, catching up on retirement savings or receiving a wealth transfer, their team can help you make sense of your finances and plan strategies to help you reach your goals, even after they change.

In turn, you gain a trusted partner who can scale strategies as you build your wealth.

3. Research and digital tools that empower your decisions

UBS invested in digital tools to make managing your wealth convenient. Once you become a client, you can access the online portal 24/7 to monitor your accounts.

This is essential if you're a hands-on investor who wants to review your portfolio regularly, access liquidity or pull up important tax documents. Use the UBS Advice Compass for portfolio assessments and actionable recommendations.

One way UBS excels is in its research offerings. To demonstrate, the UBS Evidence Lab is a sell-side team of research experts that collects data across more than 50 countries and 5,000 companies. In turn, their experts convert this data into actionable insights, providing you with the information you need to make informed investment decisions confidently.

While UBS took the top spot in overall satisfaction, these firms also earned high marks from our readers for their exceptional services and commitment to client success:

• Morgan Stanley Wealth Management
• Raymond James
• Fidelity Wealth Management
• Vanguard Personal Advisory Services
• Bank of America/Merrill Wealth Management Services
• Fisher Investments

Ultimately, not all wealth managers are the same. When it comes to planning for your future and maximizing wealth, lean on the experts our readers recommend the most. UBS offers the tools, resources and personalized guidance that help you feel confident about the road you're on and the direction you're heading.

Eager to see how our readers ranked your wealth manager? Visit our Kiplinger Readers' Choice best wealth managers to see the full ranking and what our readers liked about each one.

Related content

• Kiplinger Readers' Choice Awards 2026: Wealth Managers
• You Don't Have to Be Wealthy to Need a Wealth Manager
• 2026 Kiplinger Readers' Choice Awards

For many people, estate planning starts with a will, a durable power of attorney and a healthcare proxy.

These documents are important. They help determine who receives your property, who can make decisions for you and how your wishes are carried out if you are no longer able to speak for yourself.

But in some situations, they may not be enough.

A trust can be an important part of an estate plan, but it is also one of the most commonly misunderstood estate planning tools. As an estate planning attorney with several years of experience, I have heard a number of assumptions.

Some people assume a trust is only for the very wealthy. Others think a trust is only about taxes. Some believe that if they have a will, they have already avoided probate.

None of those assumptions is necessarily true. My job is not only to ensure an efficient and orderly transition of assets for my clients, but also to ensure that they understand why I am recommending certain documents, including a trust, as part of their estate plan.

What is a trust?

At its most basic level, a trust is a legal arrangement. Think of it as a contract between the person creating the trust and the person responsible for administering it.

The person creating the trust may be called the grantor, settlor or donor. The person responsible for managing the trust is the trustee. The people who benefit from the trust are the beneficiaries.

The trust says, in effect:

• Here are the assets
• Here are the people I want to benefit
• Here is how I want the assets managed and distributed
• And here is the person I am trusting to carry out those instructions

That trustee has a fiduciary obligation to administer the trust according to its terms and in the best interest of the beneficiaries.

Trusts are not just about avoiding probate

One of the most common reasons people consider a trust is to avoid probate. That is a valid reason, but it is not the only one.

Probate is the court-supervised process for administering assets that are part of someone's probate estate.

In Massachusetts, for example, the probate process requires forms to be filed with the court, reviewed and approved. A personal representative must be appointed.

There is also a one-year creditor period during which creditors can file claims against the estate. If assets are distributed too early and a valid creditor claim later appears, the personal representative can be responsible for that claim.

Probate can add time, expense and administrative burden at a point when families are already dealing with a loss. A trust can help avoid that process for assets that are properly transferred into the trust.

For example, if a house is owned by the trust, the trustee can administer or distribute the property according to the terms of the trust, rather than requiring the family to go through probate for that asset.

But a trust is not the only way to avoid probate. Beneficiary designations can also do a significant amount of work. A checking account, savings account, retirement account or other financial account may be able to pass directly to a named beneficiary outside of probate and accomplish much of what is needed in some circumstances.

A will does not avoid probate

Another common misconception is that having a will means your family avoids probate.

A will is important, but it does not keep you out of probate. In many cases, the will is the document that gets filed with the probate court to begin the probate process.

What a will does is provide direction. It tells the court and the personal representative how you want your probate assets distributed. It can reduce uncertainty and clarify your wishes. But the will still has to be accepted by the court, and the personal representative still has to be appointed.

A trust works differently. A revocable trust, often called a living trust or inter vivos trust, is created during your lifetime. It can hold assets while you are alive and provide instructions for how those assets should be administered after your death.

A common estate plan may include a health care proxy, durable power of attorney, pour-over will and revocable trust. The pour-over will acts as a backup, directing any assets that end up in the probate estate into the trust. The trust itself typically contains the detailed instructions for administration and distribution.

When does a trust make sense?

A house is often one of the major reasons people create a trust, because transferring the house into the trust can allow it to be administered without probate. A trust may also make sense if you want to leave assets to a minor child, niece, nephew or grandchild. Most people would not want an eight-year-old to receive a large sum outright. They also may not want the child's parent or guardian to have unrestricted control over the money.

In that situation, the trust can provide that funds be used for the child's education, health, support or other needs. It allows the person creating the trust to provide for the beneficiary while putting guardrails around how the money is managed.

Trusts can also help when a beneficiary is not great with money, has creditor issues or struggles with dependency issues. The goal is to protect the assets and provide structure. A trust can also be amended during your lifetime, if it is revocable, to reflect changing circumstances.

What about blended families?

Trusts can be especially helpful for blended families.

A person in a second marriage may want to provide for a surviving spouse while also ensuring that children from a prior relationship ultimately receive an inheritance. If everything is left outright to the surviving spouse, the surviving spouse may later change their estate plan, remarry, spend the assets or leave the remaining property to different beneficiaries.

A trust can create more clarity and help avoid conflict. It can allow assets to be used for the surviving spouse during the spouse's lifetime, while preserving what remains for children or other beneficiaries after the spouse's death.

Are trusts only for people with more than $2 million?

No. Tax planning is one of the more common reasons to use a trust, but it is not the only reason.

In Massachusetts, the state estate tax threshold is $2 million. For married couples whose combined assets exceed that amount, trusts may be used to shelter assets and defer or reduce estate tax exposure. Assets can include cash, a home, retirement accounts, bank accounts, brokerage accounts and business interests.

But many people who are below the estate tax threshold may still benefit from a trust for non-tax reasons, including probate avoidance, privacy, real estate planning, minor beneficiaries, family complexity or beneficiary protection.

What does a trust cost?

The cost varies by region, law firm and complexity. Some firms charge a flat fee. Others charge hourly. A straightforward trust may cost a few thousand dollars, while more complex planning can cost more. While that upfront cost can feel significant, for many families, it is often less than the expense and delay of probate later.

The key is to start with your goals. What do you own? Who do you want to benefit? Are those beneficiaries ready to receive assets outright? Are there family dynamics that could create conflict? Are there tax, probate or creditor issues to consider?

A good estate plan should not be more complicated than it needs to be. But it should be thoughtful enough to accomplish what you actually want. A trust can provide that structure when a will or beneficiary designation alone does not go far enough.

Related Content

• Want to Leave Money to Your Descendants But Still Keep Control? Choose Your Trustee Wisely
• Is Your Estate at Risk? The 5 Trusts You Need to Understand
• Three Legal Documents Your Child Should Sign When They Turn 18
• Where There's a Will, There's a Way Your Assets Will Be Distributed as You Wish
• I'm an Estate Planning Attorney: These Are the Two Legal Documents Everyone Should Have

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.

Something is happening in advisory practices across the country. The clients who once fit neatly into a financial planning model have changed, and the gap between what they expect and what most firms deliver is getting harder to ignore.

This trend is showing up in client conversations and retention numbers. It's also recurring in conversations I'm having with advisers who sense the model that got them here may not be enough to carry them forward.

While this shift might be concerning to some, I see it as a real opportunity — at least for advisers who are willing to see it that way.

The client has changed

The wealth management industry is in the middle of what may be the most significant client reset in decades. Clients today are approaching wealth differently than they did even a few years ago, and their expectations of the advisory relationship are evolving just as quickly.

Clients are no longer solely focused on portfolio performance. Instead, they want advice that reflects their values, goals, time horizon and definition of success. Generic strategies and one-size-fits-all portfolios are becoming increasingly out of step with what today's clients expect from a financial relationship.

Many clients are also looking for what I call Return on Time Invested, or ROTI. They want advice that buys back hours and funds experiences, not just accumulation. They're less interested in being managed and more interested in being understood.

This shift creates a meaningful challenge for advisers whose practices were built around a model designed for a different type of client. It's also a great opportunity for a reset of the adviser-client relationship itself.

Firms that don't adapt risk losing those relationships as client expectations continue to rise.

Client expectations have outpaced what most firms deliver

For most of the industry's history, the advisory model has been transactional: Win clients, manage portfolios and compete on performance and service. That model no longer matches what clients expect.

Today's clients don't experience their financial lives in silos. They don't separate their investment portfolio from their insurance coverage, estate plan or tax situation. They want someone who can see the whole picture and advise accordingly. They're looking for a better client experience.

The most successful firms are consistently delivering that experience, starting when a client first says yes and lasting throughout the duration of the relationship. They're offering proactive communication rather than reactive. They're providing tax-aware portfolio construction rather than performance-first allocation.

These firms deliver advice that is tailored to the individual, even across a large and growing client base.

Until recently, that kind of capability required infrastructure that only the largest firms could afford. While that's no longer true, it does require the right partners and a willingness to build something more intentional than most advisory practices have been in the past.

From transactions to relationships

The advisers who will thrive over the next decade aren't necessarily the ones with the most clients or highest assets under management (AUM). They're the ones who have built a systematically personalized client experience and the infrastructure to deliver it consistently.

The defining opportunity for independent advisers right now is the shift from transactions to teamwork — and it's one that plays directly to the strengths that independent firms already possess.

Independent advisers aren't steered toward proprietary products. The advice they give is genuinely theirs, and the relationships they build belong to them. As consolidation continues to reshape the industry, that clarity of purpose becomes a differentiator clients notice and value.

The question is how to build the experience that clients are looking for without losing what makes the independent model work. At AE Wealth Management, here's how we're helping advisers understand and make the shift:

• Whole-picture planning is the new standard. Clients expect their adviser to understand the full picture, not just their investment portfolio. Tools that integrate market-correlated and non-market-correlated investments, life insurance and annuities into a single planning view give advisers the ability to deliver comprehensive advice without doing all the heavy lifting themselves.
• Personalization is within reach. Direct indexing, tax-aware portfolio construction and preference-based customization used to require resources most independent firms couldn't access. The right platform partner can change that, putting sophisticated personalization tools in the hands of advisers who want to compete on depth of service rather than just breadth of offering.
• Systematization must be personal. The firms that are growing consistently have one thing in common: A repeatable, disciplined approach to the client experience. However, that doesn't mean it's generic. These firms are building processes that deliver a high-quality, personalized experience to every client, not just the top tier.
• Succession and continuity are part of the experience. Clients who trust an adviser want to know the relationship is protected over time. Advisers who think proactively about succession and preemptively design internal equity tracks and leadership development programs send a signal about the kind of firm they're building.

Consolidation is changing the competitive landscape

As I previously wrote in the article You Don't Have to Sell Out to Grow: A Case for Staying Independent as an RIA on Your Terms, private equity is reshaping the RIA competitive landscape at a speed that was hard to predict even a few years ago. Consolidation is creating real pressure on independent firms, but it's also clarifying something.

Clients are beginning to understand the difference between an adviser who is independent and one who operates inside a structure built for someone else's exit timeline. As that distinction becomes more visible, independent advisers who can clearly articulate their value and back it up with a consistently excellent client experience are gaining an edge that is difficult to replicate.

The advisers who will benefit most from the current opportunities are the ones who stop treating independence as a default and start treating it as a strategy.

Start with the client in front of you

These changes in wealth management can feel abstract until you zoom in on a single client relationship.

• What does that client expect from you today that they didn't five years ago?
• What does their next chapter look like?
• Does your practice have the tools and infrastructure to support it?

The advisers who are asking those questions and acting on the answers are the ones building something that lasts.

The client has changed. The model is shifting. The opportunity is real. The only question is what you will do with it.

This content is for informational use only and not intended as financial advice or advice designed to meet the needs of any particular situation.

Related Content

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• Winning Strategies for Financial Advisers as Clients' Lives Evolve
• How Financial Advisers Can Deliver a True Family Office Experience
• The Four Key Pillars of Wealth Management of the Future
• To Win HNW Clients, Consider an Unbundled Advisory Model That Delivers Objective Oversight

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.

Another big rebound on the other side of the world suggested stocks would rise in the U.S., too, and that's what happened early on Wednesday. But investors, traders and speculators remain wary about the speed and scale of the artificial intelligence (AI) buildout.

South Korea's KOSPI Index bounced back in a big way after a sharp sell-off from new highs, just as it did in March and April, rising as much as 4.6% and finishing with a gain of 3.3%.

More than half of the KOSPI's value is tied to Samsung Electronics (SSNLF) and SK Hynix (HXSCL), which were up 9.8% and 1.0%, respectively, on their local exchange.

Fellow semiconductor stocks such as Nvidia (NVDA, -0.5%) enjoyed some stateside follow-through, as tech- and AI-related names attracted dip-buyers through midday. Selling pressure returned after lunch.

Industrials, utilities and consumer discretionary stocks — most notably big box retailer Home Depot (HD, +5.7%) — paced the rally over here at a sector level.

"The recent volatility in AI-related names — particularly chip stocks — has been widely described in terms of 'technical exhaustion'," observes Daniel Skelly, head of Morgan Stanley's wealth management market research and strategy team.

Skelly sees evidence of weakness in the fundamental story, too, "including possible AI-model pricing wars and increased sensitivity about spending among AI hyperscalers."

By the closing bell, the tech-heavy Nasdaq Composite had slipped 0.4% to 25,476, and the broad-based S&P 500 was down 0.1% at 7,358. But the blue-chip Dow Jones Industrial Average held on for a 0.4% gain to 51,848.

Warsh has a legendary act to follow

That the front-month West Texas Intermediate crude oil futures contract was down another 4.3% to $70.06 per barrel on Wednesday will relieve consumers and policymakers worried about inflation. That the 2-year Treasury yield backed off from 52-week highs today to 4.148% vs 4.200% on Tuesday will comfort anyone watching interest rates.

That they're calling what happened in South Korea yesterday "Black Tuesday" is a reminder that new Federal Reserve Chair Kevin Warsh has a tough act to follow. But so did Ben Bernanke, Janet Yellen and Jerome Powell.

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.

Indeed, Alan Greenspan, who passed away on Monday, is the model for the modern Fed chair.

Whether you need to know how to run a central bank (or you're forming a jazz band), the old Fed chair has answers for you.

Here are five lessons (we can all learn) from Alan Greenspan.

Papa Dow trades VZ for GOOGL

Alphabet (GOOGL, -0.2%) will be the latest Magnificent 7 stock to join the Dow Jones Industrial Average, S&P Global announced on Tuesday.

The Google parent will replace Verizon Communications (VZ, -2.1%) in the price-weighted index before the opening bell this Monday, June 29, with the swap reflecting a divergence among communication services stocks at a moment defined by AI.

As S&P Global notes, adding Alphabet will "broaden and strengthen" Papa Dow's exposure to AI, as well as advertising, cloud infrastructure, hardware, autonomous mobility, healthcare technology and media distribution.

"Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA," the data provider says.

S&P Global also said Honeywell (HON, +2.3%) will remain one of the 30 Dow Jones stocks after it completes the spinoff of Honeywell Aerospace on June 29.

Micron is reporting earnings right now

Micron Technology (MU, -0.4%) hit a new all-time high on Monday, but the tech stock put up red numbers during the two trading sessions ahead of its post-closing-bell turn on the earnings calendar today.

Of course, a year-to-date gain of 268.7% through Tuesday means expectations are still sky-high; indeed, Wall Street expects management to report earnings growth of 950% on revenue growth of 276%.

Those are big numbers. And they make sense, according to Wedbush analyst Matt Bryson.

"With numbers moving higher, demand for AI seemingly set to remain robust through CY2027 (if not 2028), limited likelihood of oversupply over the next 18 months, and finally a strong likelihood MU exceeds our estimates," the analyst argues, "we see no reason to shift our positive view on the name."

Bryson reiterated his Overweight (Buy) rating and raised his 12-month target price on MU stock from $550 to $1,300 in a preview of management's fiscal third-quarter report.

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Most people think of Sam's Club as a place to save money on bulk groceries, household essentials and gas. But a membership comes with additional perks that can make shopping more convenient and potentially help you save even more.

Warehouse club memberships have evolved beyond bulk buying, with benefits that now include features like curbside pickup, mobile checkout and member-exclusive savings opportunities.

If you're considering a Sam's Club membership, it's worth looking beyond the headline discounts. These lesser-known benefits could help you get more value from your membership.

Skip the checkout line with Scan & Go

With the Sam’s Club app, you can use Scan & Go shopping to save time at checkout. Once you open the app, you scan every barcode as you shop. You’ll check out and pay using the app, then show your exit code at the door.

There’s no need to stand in a checkout line or unload items from your cart.

Scan & Go isn't just for shopping on the main Sam's Club floor. You can also use it to order items from the café and pick them up on your way out. The app also works at the gas pump — scan the QR code to pay, so there's no need to swipe a card or wait for assistance.

The warehouse can get very busy, especially on weekends, so if you’re shopping at peak times, the Scan & Go feature can help save you valuable time.

Let Sam's Club load your groceries with curbside pickup

With Curbside Pickup, you don't even have to step inside the store. Sam's Club Plus members can schedule pickups from 7 a.m. to 8 p.m., while Club members can use the service from 9 a.m. to 8 p.m.

Place your order through the Sam's Club app, choose a pickup time and drive to the store. When you arrive, an employee will load your order into your vehicle.

Curbside Pickup can be especially useful when you're short on time or want to avoid navigating crowded aisles. It may also help curb impulse purchases by keeping your shopping focused on the items you planned to buy. Since the service is free, it's an easy way to save both time and money.

Use your membership for pharmacy and vision savings

You can save even more on everyday essentials by taking advantage of Sam's Club's pharmacy and optical services. The retailer offers discounts on many prescription medications, including more than 600 generic drugs available for $10 or less.

You can use the Sam's Club website to compare prescription prices before you fill a prescription. The pharmacy also fills many pet prescriptions, which can save you an extra stop.

Sam's Club also offers savings on eyewear. For example, Plus members can currently buy one pair of prescription glasses and receive 40% off additional pairs.

These benefits can help offset the cost of a membership. If Sam's Club offers a lower price on a medication you take regularly, the savings could add up over the course of a year and potentially cover the cost of your membership.

Make sure you're earning Sam's Cash rewards

Sam’s Cash is the retailer's rewards program, allowing members to earn rewards on qualifying purchases. Plus members can earn 2% Sam's Cash on eligible purchases made directly through Sam's Club, while all members can earn rewards when using the Sam's Club Mastercard.

As your rewards accumulate, you can redeem them for purchases on SamsClub.com, through the app or toward your membership renewal. You can also cash out your rewards at Member Services.

If you pay off your Sam's Club Mastercard in full each month, using the card regularly can help you maximize your rewards. And if you frequently make large purchases at Sam's Club, it may be worth comparing your annual rewards earnings with the cost of a Plus membership to see whether an upgrade makes sense.

The Sam's Club app does more than show deals

Your Sam’s Club app can also get you access to member-only deals:

• Instant Savings offers: Browse the Instant Savings book in the app to get special deals. There’s no need for coupons, and the discounts are automatically applied at checkout.
• Digital receipts: Your receipts are stored digitally in the Sam's Club app for up to three years, making them easy to access whenever you need them. Digital receipts can simplify returns and exchanges, and they can also be useful for tracking business expenses, documenting HSA-eligible purchases or organizing records for tax purposes.
• Fuel station access: You can use the app to locate gas prices available only to Sam’s Club members. You can also use the app to pay at the pump.
• Membership and purchase management: The app makes it easy to manage your membership, track orders and view your purchase history in one place. You can also place and monitor Curbside Pickup orders directly from the app.

Will your membership pay for itself?

A Sam's Club membership can be an easy way to lower everyday shopping costs, especially if you take advantage of the retailer's current membership promotion. Through July 5, new members can join Sam's Club for $15 for the first year, down from the standard $60 annual fee. The Plus membership is also discounted to $50 for the first year, a savings of $70 off the regular $120 price.

While many shoppers join for bulk groceries and member-priced fuel, the membership can deliver additional value through perks such as Scan & Go checkout, curbside pickup, pharmacy savings and optical discounts. For households that regularly use these benefits, the savings can add up throughout the year.

Before joining, consider how often you'll shop at Sam's Club and which membership tier best fits your needs. Frequent shoppers may find that the added rewards and convenience benefits included with a Plus membership help offset the higher annual fee, while occasional shoppers may find the standard Club membership offers plenty of value at a lower cost.

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As America gears up for its 250th anniversary this July, plans for the usual red, white, and blue spectacles are in full swing. Tall ships will sail into New York Harbor, and politicians are polishing soaring speeches to celebrate two and a half centuries of the American experiment. But a quick peek behind the fireworks reveals a striking bit of historical deja vu.

Fifty years ago, the nation marked its Bicentennial while wrestling with a very specific, stubborn set of economic headaches. Fast forward to 2026, and we are blowing out the candles next to the same triad: sticky inflation, pain at the gas pump, and a looming deadline to fix Social Security.

The real takeaway of the Semiquincentennial isn't that we are stuck in a grim rerun — it’s that these structural hurdles are uniquely resilient. As we toast to 250 years, the best way to celebrate American exceptionalism might be to finally solve the leftover homework of the 1970s.

1. Social Security insolvency — again

While Americans celebrated the Bicentennial, a flawed statutory formula enacted in 1972 to implement the Cost of Living Adjustments — indexing of benefits to protect beneficiaries from the effects of inflation — was quietly draining the Social Security Trust Fund. This has become known as the “double indexing” or “decoupling” problem. Rather than fixing the core demographic imbalance, Congress passed a minor patch in 1977.

The historic 1983 legislative rescue — which delayed cost-of-living adjustments, introduced benefit taxation, and raised the retirement age — was explicitly designed to buy 40 to 50 years of breathing room. In 2026, the borrowing time has almost run out at the same time that our population is aging.

There are approximately 62 million adults age 65 and older living in the United States, representing about 18% of the total population — a steep increase over 1976 or 1983. In 1976, the number of people 65 and older was 22.95 million or 10.4% of the population. In 1983, that number had climbed to 27.4 million, or 11.5% of the total population.

The public is less than confident that those in charge will resolve the problems without cutting benefits. Almost 70% of the adults aged 45 and older surveyed by PlanGap are not confident that the government will solve the Social Security funding challenge without reducing benefits. While 83% say that Social Security will play a major or moderate role in their retirement plan, 68% are concerned either "a great deal" or "a lot" that they won't receive the benefits that they are entitled to.

• The 1976 pre-crisis: In 1976, policymakers were concerned because a flawed benefit-indexing formula passed in 1972 was accidentally over-indexing benefits for inflation, causing the trust funds to drain faster than expected. Congress tried a temporary patch in 1977, but did not address the deeper structural demographic issues. By 1982, the Trustees warned that the system was months away from insolvency.
• The 1983 "Salvation": Enter the bipartisan Greenspan Commission. The resulting 1983 Amendments "saved" the system through a painful compromise: delaying the Cost-of-Living Adjustment (COLA), gradually raising the full retirement age (FRA) from 65 to 67, and introducing taxation on Social Security benefits for high earners. It bought the system exactly what it promised: about 40 to 50 years of breathing room.
• The 2026 reality: That 1983 clock has officially run out. We are right back in the 1976 pressure cooker. The 2026 Social Security Trustees Report currently projects that the Old-Age and Survivors Insurance (OASI) Trust Fund will hit depletion in 2032. If Congress waits until the final months to act — just like they did in 1983 — the required fixes (payroll tax hikes or benefit cuts) will have to surpass the 1983 adjustments because the demographic wave of retiring baby boomers is already fully cresting.

2. Inflation: The ghost of stagflation

The Bicentennial took place during a short-lived economic exhale. Inflation had cooled to 5.8% from its 1974 double-digit peak of 11.1%. From that point on, however, inflation rebounded, climbing every year until it reached a crushing 13.5% by 1980.

Today, the U.S. economy faces a familiar pattern. The COVID-era inflation surge peaked at an annual rate of 8.0% in 2022 — a big departure from the previous decade (2010-2020), when annual inflation averaged just 1.77%.

Now, after waking up from a post-pandemic optimism, families are confronting a sticky, resilient 4.2% inflation rate this May, proving price stability is far harder to sustain than Washington admits. Even if inflation rates fluctuate, the baked-in price increases from past inflation persist and still sting. Affordability issues won't be cured solely by a falling inflation rate.

• 1976: The mid-1970s were the cradle of modern "stagflation." While CPI had briefly dipped from its 1974 double-digit peaks down to around 5.8% in 1976, it was a false sense of security. The underlying structural drivers were left unaddressed, setting the stage for the massive second inflation wave that topped out at over 13% by 1980.
• 2026: We are living through a strikingly similar echo. After a massive post-pandemic inflation spike that peaked in 2022, prices began to moderate, giving everyone hope of a "soft landing." However, fresh energy and geopolitical shocks have driven inflation up 4.2% year-over-year in May 2026. The realization is sinking in that inflation is sticky, structural, and deeply resilient — just like it was in 1976.

3. The price of gas: geopolitical shocks and the $4 pump

By 1976, the gas lines of the 1973-74 OPEC embargo had vanished, but the era of permanently cheap fuel was over. Energy costs became an erratic wildcard that weighed on consumer confidence and squeezed household margins.

Fifty years later, the vulnerability remains unchanged. With current geopolitical friction pushing the national average past $4 a gallon, the modern consumer is learning that decades of political rhetoric cannot insulate a local gas station from overseas supply shocks.

Gas prices are dropping, but the return to pre-war levels will be slow. Continued tensions with the Iranian government, combined with low inventories and restocking demands, are expected to keep prices high for the foreseeable future.

• 1976: The country was still reeling from the psychological and economic trauma of the 1973 OPEC oil embargo. Even though the recent gas shortages are in the past, the era of permanently cheap fuel is dead. Energy costs became a volatile wildcard that dictated consumer confidence and corporate margins.
• 2026: History is repeating itself at the pump. The recent oil shock triggered by the war with Iran has driven the national average for gasoline past $4 a gallon for the first time in years. Just like in 1976, energy-driven inflation is eating directly into household budgets, proving that 50 years later, the U.S. economy remains highly vulnerable to overseas conflicts.

The present is too close to history

Every national milestone invites a backward glance, but the truest mirror for America in 2026 isn't 1776 — it’s 1976. When the nation marked its 200th birthday, the hangover of stagflation and energy shocks had left voters deeply unsettled about the future. It was also the exact moment the structural fuses on our major entitlement programs began to smoke.

Seven years later, the bipartisan 1983 Greenspan Commission enacted fixes to try to save Social Security with a cocktail of tax hikes and a delayed retirement age. It promised roughly 40 years of breathing room. Today, as we celebrate America 250, that runway has officially ended and the Social Security trust fund is projected to lapse into insolvency in 2032. The parallels between the Bicentennial and the Semiquincentennial are too close to ignore, and this time, there is nothing to celebrate about this history repeating itself.

More on America's 250th Birthday

• America is Turning 250 — But We Didn't Get Serious About Saving for Retirement Until 50 Years Ago
• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• 9 Historic Sites to Visit With Your Grandkids for America's 250
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

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New Federal Reserve Chair Kevin Warsh has a message for his fellow central bankers: You talk too much. Indeed, a change has already come to Federal Open Market Committee (FOMC) communications with the first monetary policy statement under his leadership.

But policymakers of that kind of prominence are public figures. That's just the way it is in the information age.

And Warsh knows as well as anyone that, as the 20th century bridged the 21st, Alan Greenspan established a model for the modern Fed chair, under chief executives of both parties, for better and for worse.

The new Fed chair wants "regime change." But he's confronting the work of an old Fed chair who remains an icon on Wall Street and whose legend trickles down even to Main Street.

Greenspan, who was the top policymaker at the world's most important central bank from 1987 until 2006, died on Monday at 100 years old.

Nominated by Ronald Reagan, he led the Federal Reserve under four presidents, through historic macroeconomic and geopolitical events, and was there longer than anyone but William McChesney Martin.

George H.W. Bush nominated him again in August 1991. Bill Clinton did it twice, in February 1996 for a third term and January 2000 for a fourth. George W. Bush nominated him for his fifth and final term in May 2004.

A lot has changed in the 20 years since Greenspan left the Fed. But Ben Bernanke, Janet Yellen and Jerome Powell stayed communicative throughout. And they stuck hard to the main objective: to stabilize the system.

Greenspan is survived by his wife of 29 years, the journalist Andrea Mitchell of MSNBC, with whom he formed one of the most prominent power couples of the era.

Here are five lessons we can learn from Fed Chair Alan Greenspan, a modern central banker of broad and deep experience.

1. Fedspeaking in tongues

Use your words… to the best of your ability… for the purpose you have defined.

"Since becoming a central banker," he testified to Congress in September 1987, "I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said."

It's a little bit ironic, but Greenspan instilled confidence, despite himself.

There's no question the guy was clever. And he certainly understood rhythm and timing. In his performance, Greenspan demonstrated a real grasp of where the science and the humanity of economics meet.

His actions during the dot-com era and the housing boom-bust cycle that followed suggest maybe he was a little too clever.

Something you may not know, however, is that Greenspan's Ph.D. thesis, which was compiled from some of his previously published articles and was withheld from the public at the author's request when he joined the Fed board, highlighted the impact of higher housing prices on consumer spending.

2. Black Monday

Be ready on Day One.

Little more than two months into his new order, shortly after taking his oath on August 11, 1987, Greenspan was forced to manage Black Monday, when the Dow Jones Industrial Average fell 22.6%.

That's still the biggest single-day decline in Papa Dow's 130-year history.

From October 19, Greenspan guided Washington, D.C., Wall Street and Main Street into a historic rally and an economic boom that lasted, almost uninterrupted, through the 1990s.

The Dow recovered 288 points and regained more than 57% of its Black Monday loss within two trading sessions. Papa Dow posted a 0.6% gain in 1987, and it got back to its pre-crash all-time high within 23 months, by September 1989.

3. Fed man in the bathtub

Take a bath.

Later, in December 1996, he wondered, "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions," as the dot-com era unfolded.

Now, here's the rest of the story, as told by the late Fed chair himself in his 2007 memoir "The Age of Turbulence: Adventures in a New World":

The concept of irrational exuberance came to me in the bathtub one morning as I was writing a speech. To this day, the bathtub is where I get many of my best ideas. My assistants have gotten used to typing from drafts scrawled on damp yellow pads–a chore that got much easier once we found a kind of pen whose ink doesn't run. Immersed in my bath, I'm as happy as Archimedes as I contemplate the world.

4. Everybody wants to rule the world (but few are chosen)

And you have to be flexible.

Greenspan, Treasury Secretary Robert Rubin and Treasury Deputy Secretary Larry Summers famously formed what Time magazine called the "committee to save the world" in February 1999.

Indeed, it was like they had the whole planet on their back, like the main character in the main work of Greenspan's favorite author, Ayn Rand, who celebrated Atlas and warned what would happen should he shrug.

Greenspan was an objectivist committed to hard-and-fast free market principles when he was tapped to chair the White House Council of Economic Advisors by President Gerald Ford in 1974.

By the time he was perhaps the key figure in the "age of turbulence," Greenspan was an activist focused on practical means to stabilize an ever-more complex global financial system.

5. The accountant from Ipanema

Know who you are.

Bob Woodward of The Washington Post titled his 2000 biography "Maestro: Greenspan's Fed and the American Boom."

Woodward's book was published well before Greenspan stepped away from the central bank in 2006. It also preceded the global financial crisis/Great Recession of 2007-09, a series of events that earned Greenspan another nickname, "Mr. Bubble," bestowed upon him when he no longer held any real power.

For a long time, though, Greenspan seemed to conduct financial markets and global economic activity.

"Maestro" was also a nod to Greenspan's career as a jazzman. Before he saved the world in the '90s, the future central banker played with Stan Getz and Woody Herman in the '40s. He even attended Juilliard in 1943-44.

Greenspan, who was actually from the Washington Heights neighborhood of New York City, realized he was a better bean-counter than sax-player, so he started keeping his band's books.

Held back from serving in the military during World War II because of a spot on his lung, the son of a single mother earned B.A. and M.A. degrees in economics from the New York University Stern School of Business in 1948 and 1950, respectively, and completed his Ph.D. in 1977.

As the global financial crisis devolved into the Great Recession, investors, traders, speculators and consumers started to wonder whether we need less "superhero" in our central bankers and more supervision from them.

Certainly, though, what Greenspan leaves is a worthy demonstration that a whole lot of competence and little likability can go a long way.

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Fifty years ago, planning for your "golden years" was a relatively straightforward formula: you put in your time with one company, retired at 65 with a corporate pension, and relied on Social Security to cover the rest. Fast-forward to 2026, and the retirement landscape has completely transformed into a self-funded marathon shaped by 401(k)s, IRAs and longer lifespans.

Whether you're a baby boomer who remembers the world of 1976 or a Gen Xer navigating the modern realities of 2026, take this 10-question quiz to see just how much the financial rules of retirement have shifted over the last half-century.

More from Kiplinger on Retirement Saving:

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• Roth IRAs: What They Are and How They Work
• Roth IRA Contribution Limits for 2026
• Average IRA Balance by Age and Generation
• Social Security Basics: Things You Must Know About Claiming and Maximizing Your Social Security Benefits
• What's My Social Security Full Retirement Age (FRA)?
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The Transportation Security Administration (TSA) announced a new partnership with Google Wallet on Wednesday. Travelers can now use Google Wallet to opt into TSA PreCheck Touchless ID, a program that allows you to breeze through security checkpoints without any physical government ID or paper boarding pass.

Your TSA PreCheck membership fast-tracks you through the wait line (and shortens the screening process), but you still need to stop and show ID at a security checkpoint before you can go to the screening area. Touchless ID uses facial recognition technology, not a security agent and physical ID, so you can go through a faster-moving line and get through the checkpoint more quickly.

With the new Google Wallet partnership, all of that becomes a little bit more seamless than it already is. If you're a TSA PreCheck member who's already used Touchless ID, you might be wondering how this is any different from your current experience. Here's what you need to know.

What Google Wallet changes about TSA PreCheck Touchless ID

TSA PreCheck Touchless ID is available at 65 airports nationwide. But, until now, you had to opt into the service through a participating airline.

That meant enrolling in a frequent flyer program (provided the airline you're flying with is eligible for Touchless ID), manually adding your passport details to that frequent flyer account, and then opting into TSA PreCheck Touchless ID.

That's easy enough if you've done it before with your typical airline, but what about when you're not flying with your regular airline, or if you forget to check ahead of time? Do you need to be enrolled in the frequent flyer program of every participating airline you fly with and then set up Touchless ID with each one individually? Not anymore.

The new Google Wallet integration simplifies the process. If you're flying on any of the 100 airlines participating in the program (and you have TSA PreCheck), you can opt into Touchless ID just once through Google Wallet and use it every time you fly, with any airline, without joining 100 frequent flyer programs.

How to set up TSA PreCheck Touchless ID in Google Wallet

First, you need to enroll in TSA PreCheck if you haven't already done so. Many travel rewards cards offer statement credits that effectively make the program free to you. So, if you're on the fence about whether or not enrolling is worth it and you have one of those travel credit cards, there's no question. It's free to you so any time saved at the airport is a bonus.

Next, you need to add your passport to Google Wallet.

On the day of your flight, here's what your Touchless ID process will look like:

• Check in for your flight online. After you've finished checking in, save your boarding pass to your Google Wallet.
• Opt into Touchless ID. When viewing your boarding pass in your Google Wallet, you should see a "get started" button if you're eligible for this program. Tap it and follow the prompts.
• Look for the TSA badge on your pass. After agreeing to share your digital ID and boarding pass with the TSA, you should see a little TSA PreCheck Touchless ID badge on your boarding pass. This indicates that you've finished the process and you're good to go.

That's all there is to it. You just opt into the program after checking in and you can now skip the hassle of digging around in your bag for your wallet when you reach the TSA checkpoint. Instead, you'll just scan your boarding pass, do the facial recognition process and move on to the security screening.

What else to know about Google Wallet and Touchless ID

Google Wallet is available to Android phone users. If you have an iPhone, there is no Google Wallet app available.

Understandably, some people have security concerns about the use of facial recognition technology. You do have to opt in for Touchless ID, and TSA says: "Images are not used for law enforcement, surveillance, nor shared with other entities. Your photo and personal data are deleted within 24-hours of your scheduled flight departure."

On privacy concerns, Google says your information is shared with the TSA only after you opt in and authenticate. The company adds that digital IDs in the Wallet "are always encrypted and stored directly on your phone."

The Google Wallet Touchless ID option is "rolling out over the coming weeks," according to Google.

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It can feel like there's always a sale happening. Right now, shoppers are being bombarded with promotions from Amazon Prime Day, Walmart Deals and other summer sales events, all promising big discounts and limited-time offers. But just because something is on sale doesn't mean it's the best time to buy.

Many of the biggest savings happen when retailers are clearing out seasonal inventory, making room for new models or trying to boost sales during slower shopping periods. That's why timing can matter just as much as the item you're purchasing. Buying a refrigerator during a major holiday sale, waiting until the end of summer for patio furniture or shopping back-to-school promotions for electronics can often lead to bigger discounts than shopping during a headline-grabbing sales event.

Instead of focusing on a single shopping holiday, it helps to look at the retail calendar as a whole. Certain products tend to go on sale at the same times every year, making it easier to plan larger purchases and avoid paying full price. Here's a month-by-month guide to some of the best times to buy household goods, electronics, seasonal items and more throughout 2026.

January

Best buys: TVs, fitness equipment, gym memberships, bedding, towels, linens, holiday décor and winter clearance items

January is one of the strongest months for bargain hunters. Retailers heavily discount TVs ahead of the Super Bowl as shoppers upgrade their home entertainment setups. You’ll often find markdowns on large-screen TVs, soundbars and streaming devices throughout the month.

Fitness equipment and gym memberships also go on sale as companies capitalize on New Year’s resolutions. Expect deals on treadmills, weights, exercise bikes and fitness subscriptions.

January is also prime time for clearance shopping. Holiday décor, wrapping paper and winter seasonal items are deeply discounted after Christmas. Many department stores also hold traditional "white sales," which focus on bedding, towels and linens.

February

Best buys: Mattresses, furniture, appliances, winter apparel and winter sports gear

February is one of the best months to find deals on big-ticket household purchases thanks to Presidents Day sales. Mattress retailers often compete aggressively during the holiday weekend, offering deep discounts, free delivery and bundle deals that can rival some of the best promotions of the year.

Furniture stores also begin clearing older inventory to make room for new spring collections. If you're shopping for a sofa, dining table, bedroom set or other large furniture purchase, February can be a good time to buy before new styles arrive and prices reset.

You'll also find growing clearance sales on winter clothing, boots and cold-weather gear as retailers shift their focus to spring merchandise. Ski, snowboard and other winter sports equipment may also be marked down as the season winds down.

March

Best buys: Vacuums, carpet cleaners, storage and organization products, tax software, and lawn and garden supplies

March is a strong month for home organization and cleaning deals as retailers lean into spring-cleaning season. Shoppers can often find discounts on vacuums, carpet cleaners, storage bins, shelving units and other products designed to help tackle household projects after winter.

Tax software providers also frequently offer promotions as the filing deadline approaches, particularly on basic and DIY filing packages. If you haven't filed yet, March can be a good time to compare pricing and take advantage of limited-time discounts.

You'll also begin to see early-season deals on lawn and garden supplies before demand peaks later in the spring. Purchasing outdoor tools, hoses, planters and gardening essentials early may help you avoid higher prices later in the season.

April

Best buys: Airfare, hotel stays, smartphones, tech devices, luggage, outdoor gear and camping equipment

April can be a surprisingly good month for travel deals. As part of the spring shoulder season — the period between winter travel and peak summer vacation demand — travelers may find lower airfare and hotel rates, especially if their plans are flexible.

It's also a good time to shop for slightly older smartphones and tech devices. Retailers sometimes offer discounts on existing models ahead of anticipated summer and fall product launches, creating opportunities to save without sacrificing many features.

Outdoor gear, luggage and camping equipment can also be attractively priced before summer demand ramps up. Buying early may help you avoid the higher prices that often arrive closer to peak travel and camping season.

May

Best buys: Appliances, patio furniture, grills and mattresses

May is one of the best shopping months of the year thanks to Memorial Day sales. Large appliances, including refrigerators, washers, dryers and dishwashers, often see significant discounts as retailers make room for newer inventory arriving later in the year.

Patio furniture and grills are also heavily promoted ahead of the summer entertaining season. While the deepest clearance prices typically arrive at the end of summer, May sales can still offer strong value while providing a broader selection of styles and models.

Mattresses remain another major Memorial Day sale category, giving shoppers a second opportunity to find deals after Presidents Day promotions.

June

Best buys: Tools, grills, lawn equipment, home improvement products, cookware, small kitchen appliances and fine jewelry

June offers a mix of seasonal promotions and holiday sales that can create savings opportunities across several categories. Father's Day sales often drive discounts on power tools, lawn equipment, grills and garage organization products, making it a good time for homeowners and DIY enthusiasts to shop.

The month is also closely tied to wedding season, prompting retailers to offer deals on cookware, small kitchen appliances and fine jewelry as they target gift buyers and newlyweds. If you're furnishing a kitchen or replacing household essentials, June sales can provide opportunities to save.

In recent years, June has also become a major month for online shopping events. Retailers such as Amazon, Walmart and Best Buy frequently launch summer sales and competing deal events ahead of peak back-to-school and holiday shopping seasons. While timing varies from year to year, shoppers may find discounts on electronics, smart-home devices, laptops, TVs and everyday household items throughout the month.

July

Best buys: Electronics, laptops, tablets, TVs, smart-home devices, furniture, mattresses and summer apparel

July has become one of the biggest shopping months of the year thanks to major mid-summer sales events. Retailers compete aggressively for shoppers' attention, creating opportunities to save on electronics, tech products and smart-home devices. Laptops, tablets, headphones, TVs and other popular gadgets are frequently among the most heavily discounted categories.

Fourth of July sales can also bring strong deals on furniture and mattresses as retailers use the holiday weekend to attract shoppers making larger household purchases.

By mid- to late July, many stores begin marking down summer clothing, footwear and seasonal apparel to make room for incoming fall inventory. Shoppers who don't need the latest styles can often find some of the season's best clothing discounts during this transition period.

August

Best buys: Laptops, tablets, office furniture, dorm essentials, desks, office chairs, organizational products, summer apparel and jewelry

August is one of the best months to shop for back-to-school deals. Retailers frequently discount laptops, tablets, printers and other technology products while offering bundles that include accessories, software or student-focused incentives.

The back-to-school shopping season also creates savings opportunities on office furniture, including desks, office chairs and organizational products. Even shoppers who aren't students can often benefit from these promotions when setting up a home office or workspace.

Meanwhile, summer clothing and seasonal apparel typically move deeper into clearance as retailers prepare for fall merchandise. Some jewelry categories, including engagement rings, may also see softer pricing before demand begins to increase ahead of the holiday shopping season.

September

Best buys: Vehicles, grills, patio furniture, gardening tools and appliances

September can be an excellent time to shop for a vehicle. As dealerships begin making room for next year's inventory, outgoing model-year vehicles may be discounted to encourage sales. End-of-quarter sales goals can also create opportunities for buyers to negotiate more aggressively on price, financing or trade-in offers.

It's also one of the best months to find clearance deals on outdoor living products. Grills, patio furniture, gardening tools and other seasonal items are often heavily marked down as retailers shift their focus to fall and holiday merchandise.

Appliances may also see promotional pricing during September as manufacturers and retailers prepare for new model introductions and year-end sales events.

October

Best buys: Lawn equipment, camping gear, outdoor recreation products and post-Halloween clearance

October is a transitional shopping month that can offer overlooked bargains for shoppers planning ahead. As colder weather approaches in many parts of the country, retailers often begin clearing out lawn equipment, camping gear and outdoor recreation products to make room for winter inventory.

Some retailers also start rolling out early holiday promotions on electronics, home goods and seasonal gifts ahead of the major shopping events that arrive in November. While the biggest deals may still be weeks away, October can provide opportunities to buy before inventory becomes limited.

One of the best savings opportunities comes immediately after Halloween. Costumes, decorations, party supplies and seasonal candy are often marked down significantly as retailers clear remaining inventory. Shopping post-Halloween sales can be a smart way to stock up on costumes for future school spirit weeks, themed work events and next year's celebrations at a fraction of the original price.

November

Best buys: TVs, laptops, gaming systems, smart-home devices, small appliances, streaming services and holiday gifts

November remains the heavyweight champion of shopping deals. Black Friday and Cyber Monday continue to deliver some of the year's best discounts on TVs, laptops, gaming systems, smart-home technology and small appliances. Retailers often compete aggressively in these high-profile categories to attract shoppers and drive traffic.

Holiday gifts, kitchen gadgets, coffee makers, air fryers and other popular household products also see widespread promotions throughout the month. Many retailers extend sales well beyond Thanksgiving weekend, giving shoppers more opportunities to compare prices and avoid the rush.

November is also one of the best times of the year to save on streaming services. Providers frequently offer limited-time promotions on both new and returning subscriptions, making it a good month to lock in discounted rates on entertainment services for the year.

Despite the abundance of deals, not every sale represents a true bargain. Comparing prices ahead of time, using price-tracking tools and sticking to a shopping list can help shoppers avoid impulse purchases during the year's biggest sales events.

December

Best buys: Vehicles, holiday décor, toys, winter apparel, storage containers and travel bookings

December can offer surprisingly strong savings opportunities, especially for car buyers. As dealerships work to hit month-end, quarter-end and annual sales goals, shoppers may find some of the year's best opportunities to negotiate pricing on new vehicles.

After Christmas, retailers begin clearing out holiday inventory, leading to steep markdowns on decorations, wrapping supplies, toys, gift sets and seasonal merchandise. Winter apparel may also see discounts as stores look ahead to spring inventory.

Post-holiday clearance sales can be an especially good time to buy storage totes, ornament organizers and other storage solutions. Purchasing these items after Christmas can help you protect holiday decorations and family keepsakes while paying a fraction of peak-season prices.

December can also be a smart time to start planning next year's travel. Booking flights, accommodations and other travel arrangements early, particularly for popular summer vacation periods, may help travelers secure lower prices before demand increases in the months ahead.

The best strategy isn't always buying immediately

Retailers often rely on urgency and impulse buying to drive sales, but many products follow predictable discount cycles throughout the year.

Waiting a few weeks — or even a few months — for the right sales window can significantly reduce the cost of major purchases without sacrificing quality. Whether you're shopping for a new TV, appliance, mattress or vehicle, buying at the right time can lead to savings.

If you're looking to stretch your budget in 2026, timing your purchases strategically may be one of the simplest and most effective ways to save money.

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A lot of investors use bonds for one simple reason: to generate income with lower volatility than stocks. One of the most common ways to structure this is through a bond ladder.

A basic Treasury bond ladder might look something like this: an investor splits capital evenly across Treasury securities maturing in one, two, three, four and five years. As each rung matures, the proceeds can either be spent or rolled into a new five-year Treasury.

Bond ladders can help match future liabilities or spending needs, such as retirement withdrawals or tuition payments. They can also improve cash-flow planning and liquidity management because investors know exactly when principal is scheduled to return.

The issue is that building a ladder yourself can be cumbersome. For Treasuries, many investors use TreasuryDirect.gov, the U.S. government's platform for buying bonds directly. The website, however, has developed a reputation for its dated interface, clunky navigation and poor user experience.

Some investors may instead seek higher yields through corporate bonds issued by companies rather than the U.S. Treasury Department. While these can be purchased through brokerages, individual bond trading comes with its own challenges.

Unlike stocks, bonds largely trade over the counter rather than on centralized exchanges. Pricing can be opaque, spreads can vary significantly, and retail investors are often dealing with institutional bond desks that have more information. There is also more complexity involved. Looking at the coupon and current market price alone is not enough because bonds can trade above or below their face value.

Investors also need to understand metrics such as yield to maturity, which estimates the annualized return if the bond is held until maturity. Duration is another key concept. It measures interest rate sensitivity. All else equal, rising interest rates hurt bond prices while falling rates help them.

To simplify things, asset managers packaged bonds into exchange-traded funds (ETFs), that benefits such as monthly distributions, diversification and stock-like liquidity with transparent bid and ask pricing throughout the trading day.

Traditional bond ETFs, however, come with one major limitation. Most hold evergreen portfolios designed to maintain a constant maturity profile. As holdings age and fall outside the desired maturity range, they are replaced. That means investors cannot simply hold the ETF to maturity and automatically receive principal back the way they would with an individual bond.

To bridge this gap, ETF issuers launched target maturity bond ETFs. These income-building funds are designed to mature in a specific calendar year, similar to an individual bond, while still retaining the diversification, transparency and liquidity advantages of ETFs.

What is a target maturity bond ETF?

Target maturity bond ETFs are usually easy to identify because the maturity year is included directly in the fund's name. You will commonly see labels such as 2026, 2027, 2030 or 2040.

Unlike traditional bond ETFs, which hold an evergreen portfolio spanning many maturities, target maturity bond ETFs hold bonds designed to mature in the same calendar year. That structure makes them behave more similarly to an individual bond ladder.

When you buy one of these, you still receive the standard benefits of a bond ETF. The fund pays periodic monthly distributions rather than semi-annual coupon payments, and the ETF itself trades throughout the day with a net asset value (NAV) that fluctuates based on the value of the underlying bonds.

The key difference appears as the ETF approaches its maturity year. Instead of continuously replacing bonds to maintain a constant duration profile, the portfolio gradually winds down. The bonds mature, proceeds shift into cash and cash equivalents, and eventually the ETF itself liquidates.

From there, investors receive a final distribution based on the fund's NAV after liabilities. This process is designed to mimic the principal repayment of an individual bond at maturity. For example, according to BlackRock and its iShares iBonds lineup, an investor's total return (represented by yield to maturity) comes from two components:

1. Periodic monthly income distributions; and
2. The final end-date distribution upon ETF's termination.

These two components interact with each other. All else equal, if the ETF distributes more income along the way, the final payout tends to be smaller. Conversely, if periodic distributions are lower, more value remains for the end-date distribution.

For iShares specifically, most iBonds ETFs terminate toward the end of the designated maturity year, typically around October through December. Once the underlying bonds mature and the portfolio transitions to cash, the ETF is liquidated and shareholders receive the remaining NAV.

Importantly, target maturity ETFs can still vary substantially depending on the underlying bonds they hold. Most providers offer lineups for U.S. Treasuries and investment-grade corporate bonds, but some also offer high-yield bonds, municipal bonds and Treasury Inflation-Protected Securities (TIPS).

These categories differ in terms of credit quality, yield and volatility, allowing investors to tailor a bond ladder around their own risk tolerance. Even so, target maturity bond ETFs are still exposed to duration risk. A fund maturing in 2040, for example, will have a higher duration than one maturing in 2027.

That means changes in interest rates can still significantly impact the ETF's price before maturity. Falling rates can boost prices, while rising rates can hurt them. Matching the ETF's maturity profile to your actual time horizon for income needs remains important.

Finally, unlike owning an individual bond directly, you will pay an ongoing expense ratio. This annual fee is deducted from the fund's returns and directly reduces yield and total return over time.

For example, a target maturity ETF charging a 0.50% expense ratio would create roughly $50 in annual fee drag on a $10,000 investment. Since the 30-day SEC yield is quoted after expenses, keeping fees low is especially important for income-focused investors.

How we picked the best target maturity bond ETFs

Bond ladders are composed of multiple bonds with staggered maturities. The same principle applies when building one with target maturity bond ETFs. Because investors will typically need several ETFs rather than just one, it was not really practical to crown a single "best" ETF in this category.

In many cases, the primary distinguishing feature between funds is simply the maturity year itself. Instead, we chose to profile four of the largest providers in the space and focus on the part of each lineup that stood out the most.

1. For iShares, we focused on the iBonds Treasury target maturity bond ETFs.
2. For Invesco, we focused on its BulletShares high-yield target maturity bond ETFs.
3. For State Street, we focused on its MyIncome municipal bond target maturity ETFs.
4. For Vanguard, we focused on its investment-grade corporate bond target maturity ETFs.

For every ETF discussed, we also highlighted key metrics such as the 30-day SEC yield, expense ratio, assets under management and liquidity. For each provider, we also selected a group of ETFs that could hypothetically be combined into a three-year bond ladder suitable for an investor starting today.

Remember, this is simply an illustrative example designed to demonstrate how these ladders can be structured in practice. Actual portfolio construction will vary depending on an investor's time horizon, risk tolerance, income needs and interest rate outlook.

One advantage of this category is that many providers now offer dedicated ladder-building tools. For example, iShares offers an iBonds ladder calculator that helps investors estimate metrics such as weighted average yield to maturity and acquisition yield, while also showing how factors like premium or discount pricing and expense ratios affect expected returns.

iShares iBonds Treasury ETF Ladder

• iShares iBonds Dec 2027 Term Treasury ETF (IBTH)
• iShares iBonds Dec 2028 Term Treasury ETF (IBTI)
• iShares iBonds Dec 2029 Term Treasury ETF (IBTJ)

The Treasury component of the iShares iBonds lineup is notable for its low costs and strong liquidity. All three ETFs charge a 0.07% expense ratio, or $7 per year for every $10,000 invested, and each currently trades with a relatively tight 30-day median bid-ask spread of roughly 0.04% to 0.05%.

The funds are also well capitalized. IBTH currently holds $2.2 billion in assets under management, IBTI about $1.8 billion, and IBTJ roughly $1.3 billion. That scale materially reduces concerns around premature closure due to lack of investor interest. In terms of income, as of June 23, IBTH offered a 3.8% 30-day SEC yield, IBTI 4.0%, and IBTJ 4.0%.

U.S. Treasury securities held by these ETFs remain among the safest fixed-income instruments globally. While U.S. government debt has been downgraded from AAA to AA by some ratings agencies, Treasuries are still generally treated as effectively risk-free in practice from a default perspective.

Treasury interest also receives favorable tax treatment. Income from Treasuries is generally exempt from state and local taxes, whereas corporate bond income is typically taxed as ordinary income at both the federal and state level.

Learn more about IBTH, IBTI and IBTJ at the iShares iBonds provider site.

Invesco BulletShares High-Yield ETF Ladder

• Invesco BulletShares 2027 High Yield Corporate Bond ETF (BSJR)
• Invesco BulletShares 2028 High Yield Corporate Bond ETF (BSJS)
• Invesco BulletShares 2029 High Yield Corporate Bond ETF (BSJT)

High-yield corporate bonds, also known as junk bonds or non-investment-grade bonds, are bonds carrying ratings below BBB. Credit ratings are assessed by the three major agencies: S&P Global, Moody's and Fitch Ratings. Within the high-yield market, the highest-rated segment starts at BB, followed by single-B and then CCC or CC-rated securities lower down the spectrum.

These bonds carry materially higher credit risk than investment-grade debt. There is a greater possibility that issuers may fail to make coupon payments or repay principal at maturity. One way to measure this risk is through cumulative default rates.

According to S&P Global, BBB-rated bonds, the lowest rung of investment grade, historically showed a three-year cumulative default rate of just 0.91%. Move down to BB-rated bonds and that figure rises to 4.17%. For single-B bonds, it climbs further to 12.41%. At the CCC/CC level, the three-year cumulative default rate reaches 35.67%.

Investors are compensated for accepting that higher risk through materially higher yields. Currently, the Invesco BulletShares lineup offers sizable 30-day SEC yields: BSJR at 5.6%, BSJS at 5.7%, and BSJT at 6.5%. The longer maturities generally contribute to the higher yields in the later-dated funds.

Investors using the BulletShares high-yield lineup should also pay attention to fees and taxes. These ETFs charge a 0.42% expense ratio, which is reasonable for riskier credit exposure, but notably higher than Treasury or investment-grade target maturity ETFs.

Tax efficiency is another consideration. Because these ETFs hold corporate bonds, distributions are generally taxed as ordinary income at both the federal and state levels. For investors in higher tax brackets, particularly in states such as California and New York, this can materially reduce after-tax yield.

Liquidity is also worth monitoring. Under normal market conditions, these ETFs trade efficiently, but during periods of stress, high-yield corporate bonds can become materially less liquid than Treasuries. Investors should expect wider bid-ask spreads during periods of market turmoil.

Learn more about BSJR, BSJS, and BSJT at the Invesco BulletShares provider site.

State Street MyIncome Municipal ETF Ladder

• SPDR My2027 Municipal Bond ETF (MYMG)
• SPDR My2028 Municipal Bond ETF (MYMH)
• SPDR My2029 Municipal Bond ETF (MYMI)

For some investors, particularly those in higher tax brackets, tax efficiency can matter more than headline yield. Investment-grade corporate bonds are generally the least tax-efficient option discussed so far because their distributions are taxed as ordinary income at both the federal and state levels. Treasury bonds offer some improvement because interest is typically exempt from state and local taxes.

If your goal is avoiding federal income taxes while building a bond ladder, municipal bond ETFs may be more appealing. One option is the State Street MyIncome municipal bond lineup. A simple three-year ladder could be built by allocating evenly across MYMG, MYMH and MYMI.

These ETFs charge a 0.20% expense ratio, placing them roughly midway between the lower-cost iShares Treasury iBonds lineup and the more expensive Invesco BulletShares high-yield ETFs. Liquidity remains reasonable, as all three ETFs currently trade with 30-day median bid-ask spreads of 0.08%.

The funds are relatively new and currently modest in size, with MYMG and MYMH each holding just under $10 million in assets under management, while MYMI sits closer to $14 million. Despite the lower AUM, the risk of liquidation appears limited given State Street's scale, distribution network and brand recognition, which should support future inflows.

Headline 30-day SEC yields currently stand near 3% for all three target maturity bond ETFs. On the surface, those yields may appear lower than taxable Treasury or corporate bond ETFs, but municipal bond investors should instead focus on the tax-equivalent yield.

The tax-equivalent yield estimates the yield a taxable bond ETF would need to generate to match the already tax-free income from a municipal bond ETF. Using the highest marginal federal tax bracket, State Street estimates tax-equivalent yields of 4.8% for MYMG, 4.8% for MYMH, and 4.9% for MYMI.

Learn more about MYMG, MYMH and MYMI at the State Street MyIncome provider site.

Vanguard Target Maturity Corporate ETF Ladder

• Vanguard Target Maturity 2027 Corporate Bond ETF (VBCA)
• Vanguard Target Maturity 2028 Corporate Bond ETF (VBCB)
• Vanguard Target Maturity 2029 Corporate Bond ETF (VBCC)

Vanguard is one of the newest entrants to the target maturity bond ETF space, and so far, its lineup has focused exclusively on investment-grade corporate bonds. These are loans issued by companies rated at least BBB by the major credit agencies.

In practice, however, Vanguard's portfolios also carry substantial allocations to higher-quality A-rated debt, along with smaller allocations to AA and even some AAA-rated securities. Notably, only two U.S. companies currently maintain AAA credit ratings: Microsoft (MSFT) and Johnson & Johnson (JNJ).

In terms of yield, Vanguard's target maturity corporate bond ETFs generally sit between Treasuries and high-yield bonds of similar maturity. Currently, VBCA offers a 4.2% 30-day SEC yield, VBCB yields 4.4%, and VBCC yields 4.6%. The increase in yield across the ladder reflects the additional maturity risk investors take on with the later-dated ETFs.

This segment tends to sit in a "Goldilocks zone" for many investors. Compared to Treasuries, investment-grade corporate bonds provide meaningfully higher income. Compared to high-yield bonds, they carry materially lower default risk. That combination makes them more of a balanced, jack-of-all-trades option for ladder construction.

The trade-off is tax efficiency. Like other corporate bond funds, distributions are generally taxed as ordinary income at both the federal and state levels. While the yields are lower than high-yield bonds, taxation can still meaningfully reduce after-tax income in taxable accounts.

In classic Vanguard fashion, however, the lineup remains very inexpensive. All three ETFs charge a 0.08% expense ratio.

Learn more about VBCA, VBCB and VBCC at the Vanguard Target Maturity provider site.

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Tipping has always been part of everyday life, whether you're dining out, getting a haircut or ordering food delivery. But in recent years, you may have noticed that tip prompts seem to be appearing in more places than ever before.

At the same time, inflation has pushed up the cost of restaurant meals, personal services and other everyday expenses. That means even when you're leaving the same percentage tip you always have, the dollar amount is often higher simply because the bill is higher.

The result is that many people are taking a closer look at their tipping habits and wondering what's expected, what's optional and how to be generous without stretching their budget too thin. Some services still have well-established tipping norms, while in other situations, gratuities are entirely up to the customer. Understanding the difference can help you make confident decisions the next time you're faced with a payment screen asking for an extra 20% or more.

Here's a practical guide to who to tip, how much to tip and when it's perfectly reasonable to skip the extra charge.

The services where tipping is still expected

Today, customers are being asked to tip almost everywhere. Digital payment screens now appear at coffee shops, bakeries, food trucks, self-checkout counters and even some retail stores.

Shoppers and media outlets began using the term "tipflation" to describe the combination of rising prices, higher suggested gratuities and tip requests appearing in more everyday transactions. Meanwhile, workers in many service industries continue to rely on tips as a significant part of their income.

While tipping norms continue to evolve, there are several situations where gratuities remain an established part of compensation.

Places where tipping is optional

Not every tip prompt requires a tip. Many people encounter gratuity requests in situations where tipping was uncommon just a few years ago, including:

• Coffee shops
• Frozen yogurt shops
• Retail checkout counters
• Self-service kiosks
• Grab-and-go food counters
• Convenience stores

In these situations, tipping is usually optional rather than something customers are expected to do. That doesn't mean you should never tip.

If a barista remembers your order, prepares a complicated custom drink or provides exceptional service, leaving a dollar or two can be a thoughtful gesture. Likewise, if a worker goes above and beyond to help you, a small gratuity may be appropriate.

However, customers shouldn't feel obligated to leave 20% simply because a payment screen suggests it. If there is little or no personalized service involved, selecting "No Tip" or entering a smaller custom amount is perfectly reasonable.

Should you tip on the pre-tax amount or total bill?

Traditional etiquette suggests calculating tips based on the pre-tax subtotal rather than the final amount after sales tax. While many people tip on the total bill because it's easier, tipping on the subtotal avoids paying a gratuity on taxes as well.

In the example below, tipping 20% on the pre-tax bill results in a $16 tip, while tipping 20% on the total bill results in a $17.60 tip.

Restaurant bill:

• Food and drinks: $80
• Sales tax: $8
• Total bill: $88

The difference isn't enormous on one meal, but it can add up over time.

Either method is acceptable, but tipping on the pre-tax subtotal aligns with traditional etiquette guidelines.

How inflation changes the math

One reason tipping feels more expensive today is that menu prices and service costs have increased significantly. Consider a restaurant meal that cost $50 in 2020. A 20% tip would have been $10.

Now imagine that same meal costs $70 in 2026 due to higher food, labor and operating costs. A 20% tip jumps to $14. The tipping percentage hasn't changed, but you're spending 40% more because the underlying bill is higher.

That's one reason many diners feel stretched. They're paying more for the meal itself and more for the gratuity attached to it.

Inflation and higher suggested tip percentages have combined to create what many describe as tipping fatigue. At the same time, workers are also facing higher living costs, creating tension on both sides of the transaction.

What to do when the payment screen starts at 25%

Many modern payment systems now display suggested tip options of 20%, 25% or even 30%. Seeing those numbers can make consumers feel pressured to spend more than they planned.

The good news is that you almost always have another option.

Most digital payment systems include a "Custom Tip" button that allows you to enter your own amount. If your personal standard is 15% or 18%, you can simply select a custom gratuity instead of choosing the suggested options.

A quick way to estimate a tip:

• 10% = move the decimal one place left
• 20% = double the 10% amount
• 15% = calculate 10% and add half of that amount

For example:

• $50 bill
• 10% = $5
• 20% = $10
• 15% = $7.50

Experts generally agree that customers shouldn't feel guilty for choosing a reasonable gratuity that fits their budget and aligns with the level of service received.

Create your own tipping rules

One of the easiest ways to reduce tipping stress is to establish personal guidelines before you're standing at the register.

You might decide:

• Always tip 20% at sit-down restaurants.
• Tip food delivery drivers at least $5 or 15%.
• Leave $1 at coffee shops for custom orders.
• Skip tips at self-service kiosks.
• Tip more during bad weather or when service exceeds expectations.

You can also create a monthly "tipping budget" just as you would for dining out or entertainment expenses.

Having a plan helps remove the guilt and uncertainty that many feel when confronted with endless tipping prompts. Instead of reacting to pressure on a screen, you're simply following rules that fit your finances and values.

Tipping doesn't have to be stressful

Tipping culture continues to evolve, but customers don't have to feel obligated to tip everywhere they're asked.

A practical approach is to prioritize workers who traditionally rely on gratuities, understand where tipping is optional and set personal guidelines that fit your budget. With inflation continuing to strain household finances, consistency matters more than giving in to every suggested tip screen. In these cases, it's perfectly reasonable to decide your tip amount based on your budget and the experience you had.

Need help building a financial plan? Use the tool below, powered by Bankrate, to connect with a financial professional who will help you reach your financial goals.

Related Content:

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The country may be turning 250 this summer, but many Americans didn't start taking retirement savings seriously until it turned 200.

Before that, pensions and Social Security were the primary means of support in old age, but as both declined or faced financial strain, new mechanisms emerged. From the mid-1970s through today, a lot has changed in how Americans save for retirement. For good reasons: We are living longer, and retirements are stretching on for decades.

As we commemorate America's 250th or semiquincentennial birthday, here's a look at how saving for retirement has evolved over the years.

1960s-mid-1970s: Pensions are all the rage

During the 1960s, many workers stayed with one company for their entire career and, in return, received a paycheck for life once they retired. These pensions were common throughout the 1960s and early 1970s —particularly in public sector jobs and heavily unionized industries like manufacturing, automotive, and steel — and served as the primary way Americans supported themselves in retirement.

They were supplemented by Social Security payments and personal savings, which people typically put into bank savings accounts and U.S. savings bonds. Life expectancy was also around 70 in the 1960s, which meant individuals needed to save less. Plus, the cost of goods and healthcare was a lot lower than it is today.

1975-1980: Tax-deferred saving is born

By the mid-1970s, traditional pensions were on shaky ground, and Americans realized Social Security wasn't enough to live on in retirement. While some employees had access to profit-sharing or money purchase pension plans, many didn't — and employers were scaling back those offerings. Concerned that workers weren't saving enough, Congress stepped in and passed the Employee Retirement Income Security Act (ERISA) in 1974. In January 1975, the first IRA was introduced.

Initially, any individual without access to a company pension plan could contribute up to 15% of their salary, or $1,500 per year, to their IRA. They could take a deduction on their tax return, and their contribution would grow tax-deferred. If anyone withdrew the money before 59-½, they would have to pay a 10% penalty. This was designed to encourage savers to keep the money in their IRA until they reached retirement age.

Three years after the IRA was introduced came yet another way to help workers save for retirement, the 401(k). It was first introduced as a provision in the Revenue Act of 1978, allowing employees to choose to receive a portion of their income as deferred compensation, and created tax structures around it.

In 1980, Ted Benna, who is known as the "Father of the 401(k)," encouraged his consulting firm to create the first 401(k) plan for employees, and it took off from there. Over the decades, there have been changes and upgrades made to the 401(k).

Early 1990s: Set-it-and-forget-it with Target Date Funds (TDFs)

Designed as a set-it-and-forget-it type option for 401(k) participants, the first target-date funds, called LifePath, were introduced by Wells Fargo and Barclays Global Investors in March 1994. Built around a specific retirement year, these funds automatically shift toward more conservative holdings as the saver ages to protect their principal. Once the target date is hit, the portfolio permanently settles into a low-risk income allocation.

The structure has proven incredibly popular. According to Morningstar, TDF assets in the U.S. alone surged to $4.8 trillion by the end of 2025.

1989–2001: The Roth debuts

Aiming to generate immediate federal revenue while also giving everyday Americans a way to avoid future investment taxes, Senators Bob Packwood and William Roth first proposed the 'IRA Plus' plan in 1989. It allowed for after-tax contributions to an IRA that would grow entirely tax-free.

It wasn't until eight years later that the plan was codified as the Roth IRA under the Taxpayer Relief Act of 1997 and made available to the public in 1998.

While initial contributions were modest, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 substantially raised those caps, introduced catch-up contributions for savers 50 and older, and paved the way for future inflation indexing.

2006: Auto-enrollment thanks to the Pension Protection Act

Offering 401(k) plans is one thing, but getting workers to take advantage of them is another. Facing low adoption rates among employees in America, Congress tried to change that at the start of the 21st century by introducing auto-enrollment of 401(k)s.

A key provision of the Pension Protection Act of 2006, auto-enrollment allowed employers to automatically enroll new eligible employees into the company's 401(k) plan at a default contribution rate of typically 3% of their salary, unless the employee opted out.

The idea was that employees wouldn't notice a 3% deduction from their paychecks and were unlikely to opt out of their plan. As a result, auto-enrollment would force employees to save for their retirement.

Since then, 401(k) participation rates for companies utilizing this feature have jumped from roughly 44% to 86%, according to T. Rowe Price.

2010s: The DIY era

Driven by the smartphone boom and financial technology, or fintech, the 2010s democratized how everyday Americans saved for the future. For the hands-on investor, mobile trading apps made it fast, cheap and easy to build a self-directed retirement portfolio of stocks and ETFs without a financial adviser.

The decade also saw the rise of the robo-advisor. These platforms used automated algorithms to manage and rebalance a user's portfolio for a fraction of the cost of a human adviser. Spurred by a deep mistrust of traditional financial institutions following the 2008 Great Recession, and appealing to a younger generation with low minimum account requirements, robo-advisors proved that you didn't need a massive net worth to access sophisticated wealth management.

2020s: Step up savings with the Secure Act and Secure 2.0

Despite decades of efforts to get people to save for retirement, by the end of the 2010s, it was apparent that millions of Americans were still falling behind on retirement readiness, with many lacking access to a workplace retirement savings plan. People were also living longer and working later in life. To help workers shore up their retirement savings and account for the current lifespan and lifestyle of Americans, Congress passed the Secure Act and later the Secure 2.0, which addressed those retirement issues and more.

Both acts ushered in many changes to retirement savings, including:

-Pushed back Required Minimum Distributions (RMDs) from 72 to 73, with the age to reach 75 by 2033.

-Expanded catch-up limits for older workers between the ages of 60 and 63.

-Allowed employers to legally make matching contributions into a worker's 401(k) based on the employee's student loan payments, even if the worker can't afford to contribute their own salary.

-Allowed long-term, part-time employees to participate in workplace retirement plans after two years instead of three years.

-Allowed savers to withdraw up to $1,000 once per year out of their retirement accounts for an urgent personal financial emergency without triggering the traditional 10% early withdrawal tax penalty.

-Made Roth accounts within employer-sponsored workplace plans exempt from mandatory lifetime withdrawal rules.

More to come

A lot has happened to the American retirement landscape over the past few decades, and even more changes are on the horizon. Moving forward, the next era of retirement savings will likely be influenced by AI, mobile algorithms and digital assets like cryptocurrency.

As the nation steps into its next chapter, one thing remains certain: the tools we use to build our nest eggs will continue to evolve, promising many more decades of change to come.

More on America's 250th Birthday

• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• 9 Historic Sites to Visit With Your Grandkids for America's 250
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

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Virginia lawmakers have approved what appears to be the nation’s first tax on data center electricity use.

The budget deal, which ends months of budget negotiations, will impose a new charge on the power used by data centers in the Commonwealth beginning July 1.

But…the compromise stops short of rolling back the long-standing and controversial sales tax exemption on equipment that has helped fuel Virginia's massive data center industry.

The legislation now heads to Gov. Abigail Spanberger, who is expected to sign it before the start of the new fiscal year. Here's more of what you need to know.

Virginia data center tax compromise

The new data center tax emerged from negotiations during this year’s General Assembly session, as Virginia lawmakers struggled to reconcile competing views on how to tax one of the Old Dominion state's fastest-growing industries.

For months, some state senate lawmakers pushed to scale back or eliminate Virginia’s sales tax exemption for data center equipment.

Supporters of repealing the billion-dollar tax exemption argued that the incentive — first enacted in 2008 — has become increasingly costly as data center construction has accelerated across Northern Virginia. State estimates show the exemption now reduces revenue by more than $1.5 billion annually and is expected to rise further as new facilities come online.

Still, some House of Delegates lawmakers and Gov. Spanberger opposed eliminating the incentive outright. A concern was reportedly that eliminating or changing the exemption before its slated end in 2035 could undermine Virginia’s reputation as a destination for stable technology investment.

The disagreement had stalled broader budget negotiations until lawmakers reached a compromise earlier this week: keep the exemption in place, but add a new tax tied directly to electricity consumption.

Under the FY 2027–FY 2028 biennial budget agreement:

• Data centers will pay 1.1 cents per kilowatt-hour of electricity consumed, billed monthly.
• If Spanberger signs the budget, the tax will begin on July 1, 2026.
• Revenue is capped at $600 million annually, with excess collections refunded to the data centers at the end of the fiscal year.

Virginia's Data Center Alley: Why this matters

As Kiplinger has reported, Virginia is home to the largest concentration of data centers in the world, with Northern Virginia’s “Data Center Alley” anchoring a global hub of cloud computing and digital infrastructure.

Around 200 facilities are currently operating in Loudoun County alone, with more planned. These facilities handle over one-third of the world’s daily internet traffic.

But the scale of the data center industry has sparked debate over everything from electricity and water usage to noise concerns.

• Utilities and grid planners have warned that data center electricity demand is growing rapidly, driven in part by artificial intelligence (AI) workloads that require more computing power than traditional cloud services.
• In some forecasts, data centers could account for roughly 20% to 30% of electricity demand in parts of Virginia over the next decade if current growth trends continue.
• For some Virginia residents living near data centers, the constant hum from cooling systems, back-up generators, and other equipment has become a quality of life issue.

Data centers also typically rely on large diesel-powered backup generators to ensure uninterrupted operations during power outages, which raises concerns about local air quality in some communities.

And, depending on the design and cooling technology, large facilities can consume hundreds of thousands of gallons of water per day to cool server racks. Some large campuses reportedly use volumes comparable to those of a small town, raising sustainability questions in some communities.

Adding to the debate, the existing data center sales tax exemption in Virginia cost an estimated $1.6 billion last fiscal year, according to the Commonwealth’s tax disclosures.

That massive exemption and the growing backlash over the more than 600 data centers already in the Commonwealth have made data centers a politically sensitive issue.

But Virginia isn't alone. Similar data center debates have erupted across the United States.

A recent Gallup poll finds that 71% of Americans now oppose the construction of AI data centers in their local communities (with 48% strongly opposed). The pollsters note that local data center construction is more unpopular in the U.S. than building a nuclear power plant.

As of June 2026, according to various online trackers, more than 25 states are either advancing data-center-related legislation or have enacted measures that address grid cots, reporting requirements, utility regulation, tax incentives, or local authority over data centers.

Virginia data center tax exemption: What's next?

For most residents, the immediate impact of the new tax will likely be indirect, since the data center tax revenue will flow into the Commonwealth's general fund.

Notably, under the budget compromise, the Virginia Department of Environmental Quality (DEQ) would play a larger role in regulating data centers. The agency, currently responsible for protecting Virginia's air, water, and land resources, would study data center impacts, create rules, and oversee limits on issues including noise and water use.

Will Spanberger sign? Gov. Spanberger, who has signaled support for the compromise, is expected to sign the budget.

Her signature will end this year’s fiscal standoff, but not the broader debate over how and whether the data center industry should be taxed or constrained. So stay tuned.

Related

• The Hidden Toll of Data Centers on Local Communities
• New Poll Shows People Hate Data Centers: Tax Breaks Are One Reason Why
• The Burger Tax? 13 States Where Your Summer Cookout Costs More

Here at Kiplinger, we want to ensure that you have the best financial advice at your fingertips — and that you can understand the specialized terminology often used for complex topics such as investing.

That's why we put together this short quiz to test your knowledge on a handful of key investing terms. Knowing what these words and phrases mean will help you stay a step ahead in those big decisions you have to make about what's in your portfolio and why.

And don't worry if you miss an answer or two. You can follow the links below the quiz to review these investing terms and more.

More on investing from the Kiplinger team:

• Why ETFs Are One of the Easiest Ways to Start Investing
• Best Mutual Funds to Buy for 2026 and Beyond
• Is Dividend Investing Worth It? Pros, Cons and Rules to Follow
• What Is an Initial Public Offering (IPO)?
• What Is the Rule of 72 and How Can Investors Use It?
• Investing Jargon, Explained
• How Investors Can Use Cost Basis to Lower Their Tax Bill
• Dollar-Cost Averaging: How Does DCA Stock Investing Work?

"Do I have enough to retire?"

It's the question nearly every pre-retiree asks — and it's often answered with: "Do you have $1 million?"

Sometimes it is $1.3 million, and occasionally, it is even higher.

But if you have a pension, these benchmarks likely don't apply to you. In fact, retirees with pensions are in a stronger position than they realize and may not need anywhere near $1 million to retire comfortably.

Or, if they do, then they may need to find ways to spend more in retirement.

Here's why.

The $1 million rule leaves out a key piece

Most retirement guidelines are built for people without pensions. They assume your savings must generate income to replace your paycheck, which is where figures like $1 million or more can come from. These types of retirement plans are designed to produce enough annual income to support your retirement lifestyle.

A pension already does that, so when you apply the same savings target to someone with a pension, you're essentially double counting. (I wrote a book for those with pensions that you can request here.)

What is your pension really worth?

To understand how much you actually need to retire if you have a pension, you have to reframe your thinking — not in terms of account balances, but in terms of income.

Let's say you have a $70,000 annual pension. If you took $1 million and tried to replicate that same guaranteed income stream through an immediate income annuity, you may end up in a similar place: Roughly $70,000 per year for life.

A pension can be thought of as an equivalent to having a $1 million investment portfolio dedicated to producing income.

If your pension includes a cost-of-living adjustment (COLA), it may be even more valuable.

How does Social Security affect the math?

Now, let's layer in Social Security with a simple example:

• Pension: $70,000 per year
• Social Security: $36,000 per year

You're already over $100,000 in annual income before touching your investments. That's a level of income many retirees aim for with $1 million or more in savings alone.

So, the question becomes less about "Do I have enough saved?" And more about "How much do I actually need from my portfolio?"

Why retirees without pensions need more

This contrast highlights just how powerful a pension is. Without one, retirees must rely heavily on their investments, often withdrawing 4% or more annually.

That introduces real risks, especially early in retirement: Sequence of returns risk is the danger that poor market performance early in retirement, combined with ongoing withdrawals, will prematurely deplete a portfolio and jeopardize long-term financial security. I call it a double loss.

A pension helps protect you from those risks by covering a significant portion of your essential expenses with guaranteed income.

This is a main reason why studies consistently show retirees with pensions report higher confidence and even greater happiness in retirement.

So, do you actually need $1 million?

Not necessarily. If your pension and Social Security already cover most (or all) of your lifestyle needs, your investment portfolio becomes a supplement, not a necessity.

That could mean:

• You can retire with less saved than you thought
• You may be able to retire earlier
• You could have more flexibility in how you use your money

On the flip side, if you do have $1 million or more and a pension, you may be in an even stronger position than you realize.

What happens if you have both?

Let's revisit that earlier example:

• $70,000 pension
• $36,000 Social Security
• $1 million portfolio

You're already looking at more than $100,000 of guaranteed income. If your portfolio generates an additional $40,000 to $70,000 annually, you could be looking at $140,000 to $170,000 per year in retirement income.

For some people, this could be the same or more than their working income. That raises a different question entirely: "What are you going to do with all that money?"

The real shift: From accumulation to purpose

For many "Midwestern millionaires," who are hardworking, disciplined savers who didn't earn massive incomes but built their wealth steadily (I wrote a book on this that you can request here), retirement requires a mindset shift.

You've spent decades saving, and now you must decide how to use your hard-earned dollars. This mostly comes down to three choices:

• Spend it (travel, experiences, lifestyle)
• Gift it (help children or family now)
• Give it (charitable impact)

Most people haven't put a lot of thought into this, as they have been heavily focused on accumulation.

Also, remember to plan for taxes, as they are one of the biggest concerns for people in this crowd.

Don't ignore taxes and strategy

One important caveat: Having more income, especially from pensions, often means higher taxes in retirement than expected, and strategies like Roth conversions, tax diversification and income timing can help you:

• Maintain control over your tax bracket
• Reduce required minimum distributions (RMDs)
• Increase after-tax income over time

Without a plan, even strong financial positions can become inefficient.

The bottom line

If you have a pension, the traditional $1 million retirement target may not apply to you.

You may already have more than enough. The real opportunity isn't just retiring comfortably, but recognizing the strength of your position and using it intentionally.

Once your income is covered in retirement, it becomes less about hitting a number and starts being about what that number can allow you to do.

Related Content

• 5 Financial Planning Secrets of Millionaires
• If You're the Millionaire Next Door, You May Be a Terrible Spender
• Do You Have at Least $1 Million in Tax-Deferred Investments?
• The Secret to Reducing Lifetime Taxes for Retirees in the 2% Club, From a Financial Planner
• Many Retirees With a Pension and $1 Million-Plus Do These 7 Things (and Regret It Later)

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

The investing road to retirement can be invigorating.

You make regular contributions to an IRA or a 401(k), buy individual stocks or find other investments for your money, and you watch your portfolio's value grow.

There might be times when growth halts or you lose money. But you hold steady with your aggressive approach, a rebound happens and the dollar figure trends upward once again.

As you near retirement, however, you begin to wonder: Will I eventually run out of money?

That's a legitimate concern. Unfortunately, it's more likely to become reality if you continue the aggressive investing decisions that helped you accumulate that hefty dollar amount for your retirement. And that's all thanks to sequence of returns risk.

What is sequence of returns risk?

Put simply, sequence of returns risk is the fact that, in retirement, the overall return on your investment is less important than the order in which those returns happen.

If the market soars during your first years of retirement, you likely can withstand market losses later. But if your investment losses happen in the first five to 10 years of retirement and you are making withdrawals to live on at the same time, your portfolio balance can evaporate quickly.

When the market eventually rebounds, you could have little or nothing left in your portfolio that would allow you to capitalize on that recovery.

In other words, you are a victim of the order in which returns on investments happen.

Two retirees with the same portfolio balance, the same withdrawal rate and the same average return over a 20-year span could have very different results.

The retiree who has a strong market performance in the early years likely could weather a poor performance later. The retiree who had a poor performance early might never recover.

Where will money come from in retirement?

One way to mitigate sequence of returns risk is to ease up on your investing when you're about five years from retirement and begin planning how you can turn at least a portion of your savings into retirement income. That way, in a market downturn, you aren't forced to sell some of your investments at a loss.

The first thing to do is determine your income needs.

Someone who earned $6,000 a month during their final working days might want to continue to have that amount available in retirement. Others might decide they can get by on a little less than their final salary — say 80% or 90%.

Then you need to determine where the money will come from.

Social Security is a main source of retirement income, but it typically equals about 40% of someone's final salary. Unless you have a pension, you will need to make good use of your savings to make up the difference between that amount and your income goal.

That's where wise investing comes into play.

Previously, I mentioned that when nearing retirement, you should ease up on aggressive investments so that you don't see a volatile market swallow everything you worked so hard to save. But you can't ease up entirely. Going too conservative also has its drawbacks.

Take CDs, for example. Long ago, they could generate ample income. In the mid-1980s, you could have lived off the interest on CDs because rates rose into double figures. In those days, $500,000 deposited into a one-year CD might have generated 11% in interest, giving you $55,000 a year.

That opportunity is long gone. These days, CDs barely keep up with inflation — if that. Putting a portion of your money into CDs is fine, especially since your principal is protected, but don't count on them to produce a large amount of income for you.

The diversified income strategy

Another option is a fixed index annuity with lifetime payouts. With a fixed index annuity, you pay a premium to an insurance company, and in return, you receive a regular, guaranteed income.

Other potential income sources in retirement include dividend-paying stocks, U.S. Treasury securities, bonds and real estate investment trusts.

Ideally, you should have a diversified income strategy that balances guaranteed income sources with investment income. But don't create a strategy and think you're done. Revisit your plan about once a year to see how things are working and whether you need to make adjustments.

If you're unsure about the best investing strategy for your retirement needs, a financial professional can discuss your goals with you and help you review the options.

Ultimately, the goal is for your savings to continue to work for you, no matter how long your retirement lasts.

Ronnie Blair contributed to this article.

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

Related Content

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• I'm a Retirement Consultant: This Is the Single Most Important Planning Step I Learned After I Retired
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• This Is How Early Retirement Losses Can Dump You Into Financial Quicksand (Plus, Tips to Stay on Solid Ground)
• How Will You Replace Your Paycheck in Retirement? A Financial Adviser's Tips on Income Planning

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.

A steep sell-off in South Korea spread to Europe and the U.S. on Tuesday, as investors, traders and speculators asked hard questions about the sustainability of capex plans amid what so far has seemed to be an ever-expanding artificial intelligence (AI) boom. Meanwhile, the Trump administration is talking up another cutting-edge corner of the stock market.

The KOSPI Index, which includes South Korea-based semiconductor stocks such as Samsung Electronics (SSNLF) and SK Hynix (HXSCL), fell 910 points, or 9.99%, to 8,203 on Tuesday. The two chipmakers, which account for more than half of the KOSPI's value, had led the index past the 9,100 level for the first time ever on Monday.

By the closing bell, the tech-heavy Nasdaq Composite was off 2.2% at 25,587, the broad-based S&P 500 had declined by 1.4% to 7,365, and the Dow Jones Industrial Average was down 0.1% at 51,666.

"There is a great near-term buying window for many of the high-flying memory and other technology stocks," Louis Navellier of Navellier & Associates observes, noting that memory stocks showed relative strength on Monday as the Nasdaq sold off late, "but lost their mojo" because of what happened overseas.

Indeed, Navellier expects Micron Technology (MU, -13.2%) to announce record top- and bottom-line results after the closing bell on Wednesday. "The last correction in AI-related stocks this month only lasted four trading days," he writes, "so every dip should be viewed as a buying opportunity."

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 front-month West Texas Intermediate crude oil futures contract was down 0.7% to $73.34 per barrel and has now retreated almost 40% from its wartime highs near $120, as inflation pressure from the Strait of Hormuz continues to ease.

Meanwhile, the 2-year Treasury yield ticked up to another new 52-week high on Tuesday before settling at 4.200% vs 4.219% on Monday, as markets continue to price in a path for short-term interest rates under new Fed Chair Kevin Warsh.

Big Blue gets a quantum bounce from the White House

International Business Machines (IBM, +5.0%) was No. 1 among the 30 Dow Jones stocks on Tuesday, as markets bid up the old-school technology firm on word from the White House of two new executive orders designed to accelerate quantum innovation and to protect against cryptographic attacks.

D-Wave Quantum (QBTS, +2.2%) showed green numbers, too. But quantum computing wasn't immune to broader selling pressure in the tech space, with Rigetti Computing (RGTI, -0.5%) and IonQ (IONQ, -0.8%) lower for the day.

Infleqtion (INFQ, +12.0%), which completed its initial public offering (IPO) in February, and Quantinuum (QNT, +13.5%), a former subsidiary of Honeywell (HON, -2.5%) that debuted as a standalone public company on June 4, did post big gains.

"Quantum technologies represent the next generation of innovation across computing, sensing, and networking, with enormous significance for our country's economic growth, scientific research, and cyber security," President Donald Trump said on Monday. "It's really a big deal that we're doing."

ARK is buying more SPCX

SpaceX (SPCX, +1.0%) enjoyed its first positive session since last Tuesday after ARK Invest revealed through its trade notification system that it purchased a total of 210,121 SPCX shares.

The ARK Innovation ETF (ARKK, -2.1%) added 131,837 shares, the ARK Autonomous Technology & Robotics ETF (ARKQ, -2.8%) 43,486. The ARK Next Generation Internet ETF (ARKW, -2.0%) and ARK Space Exploration & Innovation ETF (ARKX, 1.7%) bought 21,506 and 13,292 shares, respectively.

On Monday, SPCX stock was down more than 16%, and its market cap declined by about $400 billion. According to Dow Jones Market Data, that's the second-biggest single-day loss for any company in stock market history.

Susquehanna analyst Charles Minervino initiated coverage of SPCX with a Neutral (Hold) rating and a $170 12-month target price. "The current valuation requires premium multiples on very aggressive revenue and EBITDA growth assumptions," Minervino says. "With some of the markets that SPCX operates in being relatively unproven, we believe a wide range of outcomes exist."

Related content

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Last month, Amazon announced anyone with a Kindle built before 2013 will no longer have access to the Kindle Store, Kindle Unlimited or the "send to Kindle" service. The news effectively meant that older Kindles would be almost useless.

If your device was among the models affected, this year's Amazon Prime Day sale is the perfect opportunity to snag the upgraded device you need at a discount.

Whether you're shopping for a brand new eReader or looking for something used but still in good condition, this week, the major online marketplace is packed with plenty of discounted tech to save you money. To help you find the right replacement for your old eReader, here's a roundup of the best Amazon Prime Day deals on Kindles this week.

Best Prime Day Kindle deals to shop now

To get the most time out of your next Kindle purchase, it helps to buy brand new. Since companies tend to stop providing support after a few years and, in Amazon's case, may even remove features, you can get the most years out of your next Kindle before support ends by getting the latest model.

If you get that latest model during the Amazon Prime Day sale, you can stretch your dollar even further by paying less than full price. With that in mind, here are the best Amazon Prime Day Kindle deals available right now:

Tips for buying a used Kindle on Amazon

If you held onto your last Kindle long enough that Amazon cut support for it, even a used Kindle that's a couple years old will feel like a major upgrade in features and functionality.

And you can often find prices even lower than the best Prime Day deals on the latest models if you browse Amazon Resale, the major retailer's used marketplace.

But there is a catch. Buying used tech means you have to be careful about the quality and condition of the device you're buying. Since Amazon's marketplace can be a little confusing to navigate, here are a few tips to get your money's worth when shopping used:

• Choose "like new" condition: Amazon rates the condition of used items on its website on a scale of "as is" to "like new." While even the worst condition products should still be functional, tech is one of those categories where you want to stick as close to new condition as possible.
• Note the return policy: While there are some things you can't return to Amazon, used products aren't on the list. Still, you will have a limited window of time during which you can get a refund. As soon as the Kindle arrives, test out all the features a few times over to make sure everything works as expected. That includes page navigation, charging speed, downloading books, browsing your library and other key features you need for a smooth reading experience. That way, if something is off, you're well within the return window to get your money back.
• Check the seller: Your best bet is to go with a Kindle that's shipped and sold by Amazon directly. But depending on the model you're looking at, the device in the best condition might be from a third-party seller. If that's the case, make sure the seller has a strong rating (with many reviews) and then double check their return policy, as it can differ from Amazon's standard return policy.

Related content

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Amazon Prime Day is here. This is a four-day sales event running from Tuesday, June 23, through Friday, June 26.

While many of these sales don't have deep discounts, I use them as a chance to score discounts on items that improve my home's functionality and safety. On this end, Prime Day doesn't disappoint.

But first, make sure you have an Amazon Prime membership to shop the event. If you don't have one and you're new to Prime, you can sign up for a 30-day free trial. Now, here are a few items that can give you peace of mind, improve your home's functionality and potentially save you money.

This deal protects your biggest asset

I bought an older home a few years ago, and one of my main concerns was its electrical. Then, I found out about the Ting sensor. It's a smart home sensor you plug into a wall that detects electrical irregularities that could result in a house fire.

Once you install the plug, you download the free Ting app on your phone to monitor it. You'll receive real-time alerts when it detects issues. Some issues it detects include micro-arcing, caused by faulty wiring, malfunctioning devices or loose connections.

Now, I have peace of mind knowing that if any hazards arise, I can fix them before a fire occurs. During Prime Day, you'll save $20 on a Ting sensor.

This deal adds another layer of protection to your home

Smart locks are among the smartest home security upgrades you'll make. They're easy to install. And I like them for the convenience and security they offer.

These devices typically feature a keypad for PIN codes or biometric sensors, allowing you to secure your home without fumbling for physical keys. You can install them on any entry point, such as your front door, and even assign temporary codes for guests or service providers.

Worried you didn't lock your front door when you left home? Access the app and lock it remotely, instead of driving back home. You should also look for ones, like the one I recommend here, that offer weatherproofing and battery backup, so you still have access during a power outage.

And during Prime Day, you can save up to $65 on this option:

Lower your home's energy costs with this deal

Electric bills continue to surge. With the summer months driving up demand, the average household will spend 10.5% more, per the National Energy Assistance Directors Association.

The main culprit behind your energy costs? Your air conditioner. This is where a smart thermostat helps you control costs. If you plan to be away from home for days or weeks at a time, you can set your thermostat at a higher temperature. This reduces the demand placed on your AC unit and the energy it uses.

Over time, setting your thermostat by 7 to 10 degrees warmer when you're away from home lowers your energy costs by around 10%. This could equate to hundreds of dollars per year. On top of that, you can save $50 on a new unit during Prime Day.

Ultimately, while Prime Day isn't overflowing with deep discounts, it doesn't mean you can't find good deals. Being strategic when shopping can help you find deals that add value to your home, both now and into the future. These three deals represent ways you can improve your home's functionality, ensure it remains safe and save money on energy costs.

Related content

• Amazon Products You Should Skip on Prime Day
• Amazon Prime Day 2026: When It Starts and What to Know Before You Shop
• The Hidden Cost Driving Higher Electric Bills and Shorter Appliance Lifespans

When people talk about closing costs and other expenses to prepare for when you buy a new home, they often forget to mention furniture, gadgets and new decor. And after 15 years of living in apartments, when I moved into a house, there was a lot to purchase.

Suddenly, I had a separate dining room. And a living room that can fit an L-shaped couch. And a kitchen with enough storage space to finally fit my KitchenAid stand mixer. A backyard where we could grill! A basement where we could work out! Wonders never ceased, but those wonders have a price attached.

My husband and I have been slowly filling up the space, and I try to take advantage of sales seasons so we can save at least a little on all the purchases. Now is a great time to do that as Amazon Prime Day kicks off this week, setting off sales at other retailers, and as we approach annual Fourth of July season sales. We're starting our first full summer in the house, and here's what I'm looking out for. If I already made (or am specifically planning to make) a purchase, I'll let you know what I went with.

Items for hosting

One of the best parts of having a house is getting to host your friends and family, but it helps to have some key supplies. Here's what I'm looking at.

Drink pitchers

My ideal symbol of hosting is a pitcher of iced tea or lemonade at the ready when someone comes over, so I need pitchers. I looked for a glass pitcher over plastic so I can potentially run it through the dishwasher, but mostly so I don't have to think about microplastics.

Amazon option: This 1-gallon square pitcher has a strainer option on its lid, which is useful if you're making something like sangria or lemon-infused water. The list price is $41.23, and it's currently listed for $32.99.

Alternative option: This 64-ounce glass pitcher from Walmart is smaller than the Amazon option but has a more appealing design. It's typically $13.99 but currently lists for $12.59.

What I ended up getting: The lidded options are definitely functional, but I liked the aesthetic of this 80-ounce glass pitcher from Crate & Barrel for $14.95. If you've just moved, Crate & Barrel has a "new mover" promotion for a discount.

Drink dispensers

Along with multifunctional pitchers I can use for bringing water to the dining room table, I wanted a glass drink dispenser I could use for making batch cocktails.

Amazon option: This highly rated dispenser comes with a blackboard sign so you can write what the drink is along with the dispenser. It comes in 1-gallon, 1.5-gallon, and 2-gallon sizes, and it also has the option of getting two dispensers that sit side-by-side on a stand. There is a Prime Day Deal on it, and the 1-gallon set of two with a stand is $32.75 (list $38.99).

Alternative option: Target has a lot of handy home goods, including this stylish 1.8-gallon dispenser with a wooden stand. It's $34.99.

What I ended up getting: We're back at Crate & Barrel with a splurge: This 1.5-gallon dispenser with a marble stand is on sale as part of the company's 4th of July Warehouse Sale. Originally $154.90, it's 10% off.

Cornhole set

If you're having friends and family over, it's nice to have a noncommittal activity available to them, like cornhole. I thought this would be a simple purchase, but there are many different cornhole set options available, from regulation-sized to strictly portable. Let's get into it.

Amazon option: Amazon Basics has a portable set available made out of plywood. It has 4.5 stars from 2,500 reviews and is priced at $73.49.

Alternative options: You can get a Rec League regulation-sized set from Dick's Sporting Goods. It's usually $169.99 but is on major sale for $99.98.

REI sells a backpack cornhole game if you want one to be able to bring somewhere easily, for $39.95.

What I ended up getting: Believe it or not, this was a Costco purchase. Costco has a basic GoSports all-weather set with a simple but classic design. It's $159.99. If you're not already a member, you can get $40 back on a Costco membership.

Backyard fun

I'm excited to have a backyard to relax in. Here's what will make it more fun.

Grill

It's not a backyard summer without a grill. Grills come in all shapes, sizes and price points, so this is where it would help to do some research and pick out what you want, then see if it goes on sale.

Amazon option: Amazon has many Traeger grills, including this portable electric wood pellet grill and smoker. There is a Prime Day Deal on this for $422.61 (list price $499.99).

Alternative option: Lowes has some short-term sales on grills now, including this black pellet grill from PitBoss that has smart compatibility. Normally $749, it's $649 until June 24.

What I ended up getting: Following a friend's lead, we want to get a Weber grill — and you can get those at Costco, with delivery available. This gas grill, for example, is currently $110 off through June 28, coming in at $889.99. There's also a promotion going on through July 25 to save money if you buy multiple Costco Direct items on the same order. If you're not already a member, you can get $40 back on a Costco membership.

Patio umbrella

I was lucky to get a set of patio furniture from my parents that they didn't use anymore, but it's missing an umbrella. Here are some new options.

Amazon option: This 9-foot table umbrella comes in a multitude of colors and has 4.4 stars from over 5,000 reviews. The list price is $58.99, and it's currently on sale with a Prime Day Deal for $39.99.

Alternative options: If you don't have a table to put the umbrella in, try this 15-foot umbrella with a base from Walmart. It's typically $209.99, but certain colors are on sale for $119.99.

If you're a Sam's Club member, check out their patio furniture option. This 10-foot cabana umbrella is selling for $159.97.

Inflatable pool

If you don't buy a house with a pool, you might as well get the next best thing. Inflatable pools are great to have handy if you have grandchildren or nieces and nephews who visit — or if you're an adult who wants to relax outside on a hot day without going to a public pool.

Amazon option: This actually is the option I'm purchasing, based on a recommendation from a friend: An inflatable "tanning pool" lounger made for adults with a pillow to lean back on and cup holders for your lemonade. An extra-large option is typically $45.99 but is currently on sale with a Prime Day Deal for $31.99.

Alternative options: If you're looking for something more for kids, Target has an inflatable pool with a play center and a mini slide. It's usually $117.99 but is on sale for $45.99 (a whopping 61% off), and it has just over four stars from 79 reviews.

If you want something to imitate a real backyard pool, Walmart has an above-ground inflatable pool. A 12-foot version is usually $169.99 and is currently on sale for $109.99.

Summer activities

An exciting part of moving to a new place is getting to explore its public spaces. My new town has a lake and parks accessible to residents, as well as lots of summer concerts and movie screenings. Here's what I'm looking at to make the most of those resources.

Picnic blanket

Whether you're heading to a park or a beach, it's helpful to have a large picnic blanket. Here are some options I found.

Amazon option: This large beach blanket is made with sand in mind, and it has 4.7 stars from over 14,600 reviews. The list price is $28.98, and it's currently on sale with a Prime Day Deal for $18.97.

Alternative option: Target has an extra-large picnic blanket (70 by 80 inches) that's quilted for extra comfort. It's usually $39.99 and is currently on sale for $25.59.

What I ended up getting: I envision using this mostly for relaxing at a local park, so I needed something large and water-resistant for dewy grass. This XL picnic blanket tote from Macy's seems to fit the bill, according to reviews. It's usually $80 but has a Limited-Time Special price of $48.

Beach towels

I wanted to make sure I had extra beach towels so I have something to offer visiting friends if we go to the town pool. Here's what I looked at.

Amazon option: Amazon Basics has a couple of options of 100% cotton beach towels with the classic cabana stripe design. Their list price is $23.26.

Alternative options: If you want to get a few towels to have on hand, Walmart has a 4-pack of colorful beach towels. Usually $40.99, it's on sale for $29.99.

What I ended up getting: This was another Macy's purchase for me during their most recent sale: Striped cotton towels from The Beach House. Their list price is $50 each, but they currently have a Today Only price of $16.99.

Practical items

Now, living in a house is not all fun (inflatable pool!) and games (cornhole!) all the time. There's also upkeep to take care of. Here's what I'm managing, if it helps give you ideas.

Smart thermostat

Pretty much every time there's a sale season, I check for sales on smart thermostats so I can slowly but surely change out my outdated system.

Amazon option: Amazon has its own branded smart thermostat that you can link up with your Alexa. The list price for one thermostat is $79.99, and it's currently on sale with a Prime Day Deal for $57.99.

Alternative option: You can also buy thermostats directly from the manufacturer. Many HVAC experts I've talked to speak highly of the Ecobee; the Premium thermostat is usually $259.99, but is currently on sale for $209.99.

What I ended up getting: Once you start with one system, you basically have to keep going with it, so I always look for sales on Google Nest thermostats. A 4th gen learning thermostat is on sale at Best Buy for $239.99 (list price $279.99).

Dryer vent cap

This is a small detail, but homeowners know the value of paying attention to small details. In this case, a proper dryer vent could mean the difference between enjoying your summer or spending your summer fending off a wasp nest in your dryer vent.

Amazon option: Amazon offers a 4-inch dryer vent cover with a magnetic door and lint trap. It's usually $12.99 but has a Prime Day Deal for $9.99.

Alternative option: If a magnetic door seems a bit too much, Walmart has this classic dryer vent cover designed for airflow. It's $10.

What I ended up getting: My dryer vent is a good target for birds because of where it is on the house, so I went for this airtight dryer cover from Home Depot. It's $19.97.

Weeding tool

As your yard soaks in the sun and warmth, so do weeds. If you, like me, are in a battle against weeds, here are some good buys.

Amazon option: When I told the editor of the Kiplinger Retirement Report that I'd started gardening, he told me I needed to get a Japanese weeding tool for the most efficiency. This weeding sickle from Suizan is on Amazon for $27.80, and I'm keeping an eye out to see if it goes on sale.

Alternative options: Target has a 40-inch weed puller tool that allows you to do more while standing. It's usually $69.99 and is on sale for $39.99.

You could also skip the individual tools and invest in a whole set. Home Depot has a 9-piece gardening tool set with a functional tote bag from Misopily. It's usually $77.62 and is on sale for $72.27.

Related Content

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Think back to the summer of 1976. Sunday afternoons meant tuning in to hear Casey Kasem count down the biggest hits in the land, while neighborhood streets were filled with kids on skateboards wearing striped tube socks pulled up to their knees. It was a season steeped in a collective, slow-building excitement as the entire nation braced for its 200th birthday.

Over in Manhattan, the newly opened Twin Towers stood as shiny symbols of modern architectural ambition, serving as a soaring backdrop for the massive parade of international Tall Ships that came to celebrate America's Bicentennial as part of Operation Sail.

But if you peer past the high-gloss, star-spangled veneer of that 200th birthday, you find an American consumer operating in a completely different financial universe. As we gear up for America 250, comparing what it actually took to fund the American Dream fifty years ago reveals a stunning disconnect between historical nostalgia and modern economic reality.

Prices in 1976 vs 2026

Evaluating the modern consumer economy requires separating nominal price increases from true shifts in purchasing power. While cumulative inflation over the last fifty years sits at approximately 485%, certain core sectors have experienced hyperinflation that completely defies standard CPI metrics.

The 1970's saw the inflation rate seesaw throughout the decade. The overall inflation rate in 1976 was 5.76%, down from 9.1% in 1975. It had two double-digit peaks, hitting 11.1% in 1974 and rebounded to 11.3% in 1979. Inflation wouldn't fall below the 1976 rate until 1983, when it fell to 3.2%.

The following data highlights the gap between the 1976 dollar, its inflation-adjusted equivalent and the actual out-of-pocket reality confronting households today.

The top choices in 1976

If the financial data reminds us of what we’ve lost in purchasing power, a look back at the pop culture leaderboard reminds us of how much the American lifestyle aesthetic has evolved.

Even in the absence of Cable TV, VCRs and video games that were hallmarks of the 80s, several high-profile events in 1976 captured Americans' attention, including a visit from Queen Elizabeth to celebrate the Bicentennial and the Montreal Olympics. Bruce Jenner (now Caitlyn Jenner) won the gold medal in the men's decathlon at the 1976 Summer Olympics in Montreal with a world record-breaking point total and bested his Cold War rival, Nikolai Avilov.

From the most popular family vehicle to the top of the box office, here is a quick snapshot of 1976's cultural footprint.

Now vs then

Ultimately, a nation's true resilience isn't measured solely by the numbers on a balance sheet, but by its capacity to adapt, reinvent and progress. For the generation that celebrated the Bicentennial, that unstoppable American energy was perfectly personified by Bruce Jenner sprinting across the finish line to secure a world-record Olympic gold that glorious July.

The data from the last fifty years shows just how much the economic landscape has evolved. As we look past the easy nostalgia of 1976 and celebrate America's 250th anniversary, the true celebration lies in that timeless spirit of renewal — proving that our ability to overcome the financial obstacles of the present is exactly what paves the way for a brighter tomorrow.

More on America's 250th Birthday:

• America is Turning 250 — But We Didn't Get Serious About Saving for Retirement Until 50 Years Ago
• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• 9 Historic Sites to Visit With Your Grandkids for America's 250
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

Related Content

• Flashback Finance: The Cost of Retiring the Year You Were Born
• Want To Beat Stagflation? Invest Like It's the 1970s
• The Average Retirement Savings by Age

Many retirees rely on their homes for financial security. According to the Federal Reserve’s Survey of Consumer Finances, home equity accounts for a substantial share of net worth among households aged 65–74.

But when it comes time to tap that value, often through a sale, converting housing wealth into cash doesn’t always go as planned for older adults.

A recent study finds that even when home prices are relatively strong, the proceeds older sellers receive can differ meaningfully from those of younger homeowners. Though timing and how the sale is managed play a role.

And while the research doesn’t point to a single cause for the disparity, it raises broader questions about how home-sale outcomes can affect retirement income and, yes, taxes. Here’s more to know.

Why older homeowners get less money for their homes

A study from the Center for Retirement Research at Boston College finds significant variation in sale outcomes for older homeowners. It analyzed roughly 10 million repeat home sales using CoreLogic deed records linked to demographic data to estimate sellers’ ages.

Researchers compared outcomes across age groups while controlling for home type, location, and broader market conditions and found a consistent gap.

A key takeaway? Older homeowners tend to realize lower proceeds when they sell compared with younger sellers with similar observable characteristics.

According to the study's findings:

• "Older sellers get less starting at age 70," with the gap "increasing with each additional year."
• There is an estimated 5% gap in realized sale proceeds over the average 11-year holding period for some cohorts.
• For a typical home, the differences can amount to tens of thousands of dollars, depending on market conditions. Per the study, for a median $400,000 home, that is roughly a $20,000 reduction in proceeds.

There appear to be several explanations for the gap. But the study points to two primary factors.

• First, older homeowners are more likely to sell homes with fewer recent updates, which can affect pricing even in strong markets.
• Second, the researchers report that in some cases, older adults are more likely to use off-market or less competitive listing channels than the Multiple Listing Service (MLS), which can result in fewer bidders.

Also worth noting: Some home sales at older ages are driven by life transitions like downsizing, health changes, or moves into assisted living, where speed and certainty matter more than maximizing the price. In some cases, that can mean accepting an early offer rather than waiting through a longer listing process.

How a lower home sale price affects retirement income

The impact of lower home proceeds can show up in how retirees adjust their broader financial picture after the sale.

A retiree may expect a home sale to generate a certain amount of cash, enough, for example, to fund a year or two of spending without significantly tapping retirement accounts. But if the actual sale comes in lower than expected, that shortfall might be covered elsewhere, e.g., through additional withdrawals from traditional IRAs, 401(k)s, or taxable investment accounts.

• Those withdrawals are generally taxed as ordinary income. As a result, a larger-than-planned draw in a single year can push a retiree into a higher marginal tax bracket, even if only part of their income crosses the threshold.
• The same increase in reported income can also eventually affect Medicare premiums (IRMMA surcharges), since those costs are tied to income levels from two years prior.

As a result, a lower-than-expected home sale price can have retirement planning implications beyond the transaction itself.

Capital gains tax on home sales over age 65

Even though the tax impact here is primarily about how income replacement flows through the rest of the retirement portfolio, capital gains are an important consideration in retirement.

The tax treatment of a primary residence remains unchanged, including the capital gains home sale exclusion of up to $250,000 for single filers and $500,000 for married couples. That tax break can shield many homeowners entirely from tax on the sale.

Note: A 2026 analysis by the Tax Policy Center and Brookings Institution finds that about 90% of households age 65 and older will likely remain within the current home-sale capital gains exclusion, while roughly 10% would have gains large enough to exceed it.

Still, other recent data indicate that approximately 8% of home sales resulted in gains that exceeded the home exclusion threshold. That's more than double the percentage over the last five years or so, according to a report from the consumer information and analytics company CoreLogic.

That rising share of taxable gains has prompted several proposals on Capitol Hill, including bills that would eliminate capital gains taxes on home sales and a recent legislative proposal to increase the capital gains exclusion to $1 million for homeowners age 65 and older.

Why is this happening? One issue is that the exclusion limit hasn't been adjusted for inflation, so the value of the tax relief provided by the home sale exclusion has eroded over time.

As a result, homeowners across the U.S., but more often in states with high property values, like California, New York, New Jersey, Massachusetts, Florida, and Colorado, are likely to see gains exceed the exemption limit.

Selling a home in retirement: Bottom line

If you're considering a home sale, it may help to speak with a financial planner or tax professional first to understand how the proceeds could affect your retirement finances.

Every individual's financial situation is different, and a trusted professional can help with a tailored strategy.

However, a few considerations:

• How the sale fits into your broader retirement income strategy
• Whether the proceeds could affect taxable income or Medicare premiums
• How the proceeds will be used, saved, or reinvested

It may also be worth considering whether the timing of the sale allows enough time to attract multiple buyers. As the study suggests, urgency can limit a seller's options and make it harder to maximize the sale price.

Related

• New Bill Proposes $1 Million Capital Gains Tax Exclusion for Those Over Age 65
• The Capital Gains Tax Exclusion for Homeowners Explained
• Capital Gains Tax Rates for 2026: What to Know Now
• Retirees Face a Growing Capital Gains Tax Trap

If you have a modest nest egg, you might want to chase cheap listings so you can buy shares in larger lots. Buying stocks priced below $20 can be tempting.

But "dirt cheap" doesn’t always mean "good value." In fact, many low-priced stocks trade where they trade for legitimate reasons, among them weak earnings, heavy debt and/or broken business models that may never recover.

Still, if price alone isn't a sign of a good stock, then neither should price alone signal a bad stock. The important thing is to focus on fundamentals.

Solid companies with stocks that trade around $20 per share can generate reliable cash flows based on proven business models. Indeed, these are real reasons to invest, beyond price.

Our top picks for stocks priced under $20 per share are established are established companies with respected brands. They have market values greater than $1 billion. And their business models support stable dividends.

Ford Motor

• Sector: Consumer discretionary
• Market value: $59.6 billion
• Dividend yield: 4.3%

Ford Motor (F) is one of the oldest and most recognizable automakers in America, with a history stretching back more than a century.

Ford has invested heavily in electric vehicles and is selling almost 100,000 units annually. But business is still driven by traditional gasoline-powered models such as Ford's F-Series pickup truck, the best-selling vehicle in the U.S. regardless of powertrain.

While not immune to volatility, the consumer discretionary stock offers long-term exposure to onshore manufacturing and transportation trends that have wide support by consumers and policymakers alike.

With a generous dividend of more than 4%, there are multiple reasons to stay patient and buy and hold this low-priced stock for its long-term potential.

Huntington Bancshares

• Sector: Financials
• Market value: $34.6 billion
• Dividend yield: 3.7%

Huntington Bancshares (HBAN) is an Ohio-based regional bank that serves consumers, small businesses and commercial clients across the Midwest.

The company offers a wide range of services, including checking and savings accounts, mortgages, auto loans, credit cards and wealth management, as well as business lending.

Huntington is not exposed to global risks like Wall Street megabanks with proprietary trading desks. Like most regional banks, it generates revenue by making practical loans to households and businesses.

This is no small-fry financial stock, however, with current assets of nearly $300 billion. That's enough scale to support a reliable dividend and make HBAN a top stock trading below $20.

Newell Brands

• Sector: Consumer staples
• Market value: $2.1 billion
• Dividend yield: 5.7%

Newell Brands (NWL), a small-cap stock, isn't the most recognizable name on our list. But its products–such as Rubbermaid storage containers, Sharpie markers, Coleman camping gear, Yankee Candle scented accessories, Paper Mate pens and Graco baby gear–are very well known to consumers.

Indeed, a diversified product line is Newell's biggest strength, as it generates revenue from a collection of everyday goods rather than resting on a one-dimensional business model.

Multiple moving parts with varying exposures to the consumer economy can make it hard for the company to deliver breakneck growth.

But Newell offers a generous dividend yield, and management has spent recent years streamlining operations and reducing debt to provide long-term stability.

Nokia

• Sector: Information technology
• Market value: $80.7 billion
• Dividend yield: 1.4%

Nokia (NOK) is best known for its former dominance in mobile phones.

Today, the tech stock provides the equipment supporting fiber-optic and cloud-computing networks, as well as hardware essential for 5G infrastructure.

With a customer base that includes telecom providers, governments and large enterprises, Nokia has deep relationships with clients and expertise that's hard to match.

As demand for faster and more reliable data networks continues to grow, this telecom infrastructure company will only be more important in the years ahead. Stability makes NOK a solid low-priced stock.

Ambev

• Sector: Consumer staples
• Market value: $48.9 billion
• Dividend yield: 1.2%

Ambev (ABEV) lacks name recognition in the U.S. But the large-cap stock is one of the biggest beverage companies in Latin America. Ambev is also a majority-owned subsidiary of global brewing giant Anheuser-Busch InBev (BUD).

Ambev produces and distributes beer, but it's also licensed to make soft drinks such as Gatorade, Lipton iced tea and other products owned by PepsiCo (PEP).

Legacy soda and beer brands face headwinds in the U.S. because of changing consumer tastes. But growth is strong south of the border.

The dividend has grown more than 40% over the last five years, and Ambev is well-positioned to continue to support a generous yield.

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For decades, wealth management conversations largely centered on the question, "How much is enough?"

Today, many high-net-worth women are asking a different question: "What is this wealth ultimately for?"

That shift is helping redefine modern financial planning. Women are viewing wealth not simply as a measure of financial accumulation, but as a tool to support wellbeing, family, values and impact.

As head of Wealth Strategies & Solutions at RBC Wealth Management, I've come to call this evolving mindset "inner wealth," which describes the integration of financial success with personal fulfillment and emotional alignment.

Our recent Women and Wealth survey found that 81% of high-net-worth women prioritize values tied to "body, spirit and soul," while 80% emphasize ethics, trust and social responsibility. In other words, wealth today is increasingly being defined beyond the balance sheet.

I don't feel that this is a rejection of financial performance. Rather, it reflects a more holistic understanding of success that integrates financial security with quality of life, meaningful relationships, philanthropy and intentional living.

A new definition of wealth

Historically, wealth management often focused on returns, tax efficiency and asset growth. Those fundamentals still matter deeply. But today's clients, particularly women, want financial plans that also reflect who they are and what matters most to them.

In RBC Wealth Management's research, 58% of women identified "contribution, impact and legacy" among their most important personal values. Many also said they define financial freedom less by luxury and more by flexibility, peace of mind and the ability to spend time with loved ones.

One respondent described financial freedom as "having control over your money so it serves your life goals, not the other way around." That perspective is reshaping financial decisions across investing, estate planning and lifestyle spending.

As more women step into the role of the sole manager of their wealth, whether they are divorced, widowed or never partnered, we are seeing them shift the way they think about their wealth. They think more about the purpose and outcome of their wealth. They want to understand and have meaning in what they invest in. They want to know why they are holding the investments they own and go beyond the numbers.

Values-based planning is moving into the mainstream

Perhaps the clearest evidence of this shift is that clients are aligning money with values in tangible ways.

For some, that means incorporating philanthropy into long-term planning earlier in life. RBC's survey found that 52% of Millennial women say charitable giving is an important priority, which is nearly double the rate of Gen X women.

Many are embracing "giving while living," choosing to support causes and family members during their lifetime rather than waiting to transfer wealth later.

For others, it means pursuing investments that align with personal convictions around sustainability, governance or social impact. Investors are increasingly seeking portfolios that reflect both financial objectives and broader principles.

In daily life, intentional spending is becoming more common. Rather than spending simply for status, many wealthy women are directing resources toward experiences, wellness, family connection and personal growth.

RBC's research showed particularly strong spending interest in adventure travel, luxury travel and hobbies tied to enrichment and wellbeing.

But values-based planning does not necessarily mean sacrificing returns. That misconception has faded considerably in recent years as investors recognize that disciplined diversification, strong risk management and long-term strategic planning can coexist with purpose-driven goals.

How to align your financial plan with your priorities

For readers looking to incorporate more purpose into their own financial lives, the process often starts with reflection before action.

Ask yourself questions like:

• "What does financial freedom actually look like for me?"
• "What experiences or relationships matter most?"
• "How do I use my wealth for better outcomes for my family?"

From there, you can work with an adviser to build strategies that integrate both performance and purpose. That may include creating a philanthropic giving strategy, updating estate and legacy plans, or reviewing investment allocations through a values lens.

It could mean prioritizing wellness and lifestyle goals in retirement planning and structuring family conversations around financial values that are linked to wealth transfer along with financial education, among other important planning elements based on your life.

As women continue reshaping the financial landscape, the concept of "inner wealth" offers an important reminder: True wealth is not only measured by what we accumulate, but by how well our resources align with our values, relationships and sense of purpose. That may become the most valuable return of all.

Related Content

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• An Estate Planning Guide for Women: 5 Essential Moves to Prepare for When Life Happens
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• How to Plan for Your Three Acts of Retirement
• Retirees: Want to Keep Your Money? Make a Tax Plan

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.

My paralegal let me know I had a call waiting from a woman who teaches broadcast journalism. She wanted to discuss serious issues facing university students who find themselves caught in a trap because of the employment contract they signed when they were hired as a broadcast journalist.

I took the call, from "Rachel," who first wanted assurance that our conversation would be confidential. After I assured her it would be, she told me that she was calling about employees on the news teams of local TV stations owned by giant corporations "being forced to continue working when they want to quit.

"Viewers have no idea of this abuse, and depending on where you live and which local television stations you watch, often the nice young people — typically in their first job in TV news right after graduation — realize it isn't for them and don't want to be there, but they are, practically speaking, forced to continue working or suffer thousands of dollars in penalties.

"One of my former students is going through a serious depression as we speak, mugged financially by management at a television station she wants to leave. "Mr. Beaver, your column is popular in university mass communication departments, and you can do so many young people a great service by writing about this abuse."

So, how can this happen in today's America? Two things: Supply-and-demand and a corporate management philosophy among some broadcasters that views their employees as disposable.

It's not all glamor

If you live in almost any U.S. city with a population of less than 500,000 and watch local television, no doubt you've seen a revolving door of new "talent" delivering the news.

Every few months, new faces appear — some are absolute standouts — only to vanish, sometimes within months, for greener pastures. Often, viewers see people who just do not belong on the air. So, why have they been hired?

"There is a very good reason," Rachel explained. "There is an absolute glut of students majoring in broadcast journalism. When we ask our students why they chose this field, the most common answer comes down to their perception of television news as 'glamorous.'

"In reality, a broadcast newsroom is often one of the most toxic places in journalism, and sadly, it isn't until the graduates land jobs that the truth hits some of them.

"There is, in addition, a perception that these people we see on our local news are extremely well paid. So many students see young people like themselves on the news wearing what appears to be expensive clothing and do not realize this is fantasy."

TV reporters qualifying for food subsidies

How much would you figure is reasonable pay for a new graduate in a local television news department in cities with population of less than 500,000?

"First-job reporters in small markets are paid from $12 to $16 an hour, and many across the country (receive SNAP benefits). The low pay and exploitation in television news would shock viewers if they knew," Rachel said.

"This is a shrinking industry," she added, "with massive consolidation, layoffs and contractual traps. Sixty-five percent to 75% of broadcast graduates never enter TV news, and among the 25% to 35% who do, about 50% to 60% leave within two to three years.

"Only about 10% to 15% of broadcast journalism majors stay in TV news long term."

Reimbursement is required

Rachel sent me several employment contracts that her students have signed with a number of broadcasters. Most of them had this type of a clause:

If you quit before the expiration of your contract, we have the right to recover from you up to one half of your last six months compensation to reimburse us for publicizing you as a team member, training, clothing allowance and much more.

It isn't rocket science. From what I have seen, the repayment amounts are not tied to actual costs or a justifiable estimate of damages, and the intent appears to be to punish the employee for quitting, plain and simple.

Many of these provisions are unconscionable.

States have differing laws in the area

In California, it is illegal to require repayment of wages, and virtually none of this is legal, but that is not the case in several other states where employer rights dominate.

The effect of this language is clear: It restricts employee mobility and violates public policy in some jurisdictions.

As far back as 1911, in Bailey v. Alabama, the Supreme Court struck down a law that criminalized quitting after receiving an advance, holding that, "You cannot force someone to work or punish them for quitting in a way that effectively forces them to stay."

The court said this created a system of involuntary servitude, which, as we all know, was outlawed with slavery in 1865 when the 13th Amendment to the U.S. Constitution was ratified.

My recommendation

When offered a job and handed an employment contract, any broadcast journalism graduate — or anyone — needs to schedule a consultation with a labor and employment attorney who represents employees.

Don't just sign the contract!

Often, employers will include language in employment contracts that they know is not enforceable, hoping that, out of an applicant's desperation to get a job, they will sign anything.

For several years, I was an "action reporter" in local television and enjoyed the experience, but I know too many people who grew tired of being nomads, going from city to city every two to three years, station to station, discovering it wasn't what they'd ever expected. They opted for a more normal life with family, kids, a promise of tomorrow and a real home.

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

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

Shannon Saccocia, the Chief Investment Officer–Wealth at Neuberger, an investment management firm, spoke with Kiplinger about what she's predicting for the rest of 2026, resiliency for the market and consumers, and where she sees opportunities for investors.

Kiplinger: What’s your outlook for the second half of 2026? Do you have a target for the S&P 500?

Saccocia: We don’t have price targets, but with the U.S. stock market recently trading below the peak in its price-earnings multiple, while earnings estimates have risen, could we see the S&P 500 up another 5% to 7% by the end of the year? It’s possible, even with the threat of greater market vola­tility. If you just apply the current P/E multiple to the estimated earnings for companies in the index, that translates into a potential double-digit return for the S&P 500 this year.

The broad market declined nearly 10% and then was back to record highs in no time. What accounts for the resilience in the face of a lot of geopolitical and other uncertainty?

Geopolitically driven sell-offs tend to be short-lived, with stronger returns afterward, whether you measure by three months, six months or a year. We’ve seen a very nice rebound, but there are more buyers that could come into this market. Some of the larger buyers — institutions — haven’t gotten fully back to where they were last year. But first and foremost, we remain strong on the market from a U.S. economic perspective. We came into this year anticipating 2.5% growth in gross national product, and potentially higher.

We’ve seen resiliency in the U.S. consumer for several years. Now we’re seeing manufacturing, which had more of a recessionary tone, starting to strengthen. We’ve had support from fiscal spending, increased tax refunds and lower withholding rates from the One Big Beautiful Bill Act. And our view is that the Federal Reserve will cut interest rates twice this year, a quarter point each time.

Back to consumers — can they remain resilient if oil prices stay elevated?

If that happens, perhaps the tailwind that higher tax refunds were expected to deliver to the economy won’t be as pronounced. But they’re acting as a cushion. Even though consumers were already fatigued by higher prices over the past couple of years, we haven’t seen a meaningful tick down in consumer spending.

Our view is that we’ll bump along here and start to see pressures ease on energy prices. But consumers can’t digest these higher energy prices forever.

Are you sticking with your economic growth forecast of 2.5%?

Maybe a touch lower, 2.3% to 2.5%. The risk that our original forecast was not high enough is what’s been taken off the table. We’ve seen incremental, modest pressure on discretionary consumer spending — and the consumer component is such a big part of the GDP cal­culation. But we anticipate meaningful capital-spending growth from companies this year, and at the end of the day, we don’t see evidence of widespread deceleration in economic activity.

Considering that backdrop, where do you see opportunities for investors?

Our biggest change has been to upgrade U.S. large-company stocks, based on a combination of stronger and accelerating earnings growth, along with a compression in P/E multiples. We’d already been overweight in small-cap stocks, and we remain overweight. But our view on large-cap and small-cap is now about balanced. We’ve also been constructive on global equities in general.

When I tell people that we upgraded large caps, they say, “Well, you must like technology today more than you did yesterday.” And that’s probably a justifiable conclusion given the size of the tech sector. We thought tech-stock prices were vulnerable coming into 2025; now they’re more attractive.

Energy stocks are also interesting at this juncture. There’s a bit of a war premium built into energy prices, and some of that will remain even if there’s a cease-fire and an opening of the Strait of Hormuz. We don’t feel that energy stocks have fully incorporated this longer-term impact on energy prices.

We’ve had the call on small caps for some time. But it’s no longer a “buy small caps because they’re cheaper” story, it’s an improvement-in-earnings story, and those earnings are likely to continue to accelerate through the back half of the year.

Has the war short-circuited a move toward international stocks?

I think there’s been a pause, but not a short circuit. There could be some short-term strength in the dollar, but it’s still likely to be flat-to-weaker as we move into the back half of the year, and that supports investing outside the U.S.

But the war has been a reminder of the energy dependence that many of these markets have. Europe and Japan are very dependent on energy imports, and the ability for their consumers to digest those higher prices is pretty limited. There’s a pronounced fear in the market that European central banks could make a policy mistake by raising rates — European response to prior inflationary shocks has been poor.

In international developed markets, we’re underweight Europe and more positive on Japan. Japan is clearly energy-reliant, but it has already started to see the benefits of equity market and shareholder reforms, and wage growth in Japan is supporting the consumer.

In emerging markets, we like China, where a significant amount of spending on artificial intelligence is offsetting challenges from higher energy prices and a burst real estate bubble; India; and Brazil, which is actually on the other side of the energy trade and could perhaps benefit from this environment.

What do you like in the fixed-income market?

We like Treasuries, mostly around the two-year mark. We think they’re mispriced because of an expectation for higher rates, which we don’t see. [Bond prices and interest rates move in opposite directions.] We like investment-grade corporates across the range of maturities.

We like municipal bonds and also some non-U.S. bonds from Germany and the U.K. We like emerging-markets debt, but it has performed well, so valuations are not as attractive. But it’s a great diversifier. We are neutral on high-yield bonds in the U.S.

We’ll all be talking about the midterm elections soon. What’s the likely impact on financial markets?

There’s a typical cadence to the elections. Going into July and August, we could see another pickup in volatility, which typically spikes in the weeks leading up to the election. Returns in this time frame tend to be a bit weaker, then stabilize in September and move higher through the end of the year. I don’t expect a lot of change in the policies from the Trump administration’s second term.

Tariffs are still going to be in the dialogue in some way, shape or form — there’s a need for that revenue to lessen some of the impact from increased fiscal spending. There might be some changes on the margin with a switch of party in the House, whether it’s something like funding for the Department of Homeland Security or Medicare re­imbursement rates.

I will say this: We came into this year with affordability already one of the biggest concerns. The affordability challenge is what will drive voters to the polls, and the current situation in the Middle East is complicating that challenge.

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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