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 58-year-old man who works in the entertainment/gambling industry in New York. He reports his annual salary is $150,000.

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?

Technically, I made my first million from paying off my house early and savings. We were fortunate to make a profit on the sale of our first house, broke even on the sale of our second house during the 2008 downturn and became mortgage-free in our third house that we currently live in.

Our second million came from investing in our company 401(k) plan. Each time I started a new job, I rolled over the balance to the new job plan and resisted the temptation to cash it out.

I made sure my contributions were enough for the company 401(k) match plan, and as my salary grew, I contributed more until I maxed out to the federal tax limit.

All of this took 30 years of daily financial discipline of learning to live within my means.

One simple example is I figured out early that if I brought my own lunch and morning coffee from home instead of going out each day, that was equal to a car payment each month.

What are you doing with the money?

I am still working and have almost two more years before I can withdraw from my 401(k) penalty-free, so I am sticking with the same plan of investing in the company 401(k).

With no mortgage, we were able to pay for my son's college and, as a graduation gift, assist him with a down payment for his first house.

We spent years paying rent and saving for our first home, so it is personally gratifying to see the next generation benefit from our hard work.

The Fun Stuff

What is the best part of making $1 million?

I don't worry about money. I continue to live a middle-class life but don't have the "end-of-the-month bill-paying worries" I had when I was younger.

Did your life change?

Making $1 million did not change my life. I made a conscious effort to make sure it didn't. I continue to work and save.

I will admit it did allow for better family vacations.

Did you do anything to celebrate?

Went to dinner with my wife.

Does anyone know you're a millionaire?

I told one co-worker who I have worked with for almost 20 years. He knows the humble beginnings of my career and could appreciate the hard work it took to get there.

Any plans to retire early?

I do not plan on retiring early. I enjoy what I do, and I am fortunate enough to keep doing it.

Looking Back

Anything you would do differently?

When I graduated high school, I had no interest in pursuing higher education. I think that was a mistake. Instead of being an electrician, I could have been an electrical engineer. Who knows?

What advice would you give to your younger self?

That you can do it. I never thought a blue-collar worker could be in the financial position I'm in.

Did you work with a financial adviser?

I did not use a financial adviser. I had a few consultations but saw the fees and risks as too high for me.

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

I mostly read books on compound interest.

Did anyone help you early on?

My brother. He pushed me to pay attention to my future financial well-being by investing in a 401(k) and living within my means. Once you do that, everything else falls into place.

Looking Ahead

Plans for your next $1 million?

I will probably be retired and spending before I reach another million, which is fine. Life is about living, not making money.

Life is also better with money. Balance is the key.

Do you have an estate plan?

I do have an estate plan. Mostly to keep the next generation out of probate court.

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

First lesson is to learn the power of compound interest. With a small starting balance, it looks like nothing. Over time, it grows into something.

Second lesson is cash is king. Paying interest on credit cards or car payments is hurting you more than you think.

If you take the time to save for what you want and buy what you can afford, you will be far better off in the future.

Third lesson is patience. Lessons one and two do not pay off overnight.

What do you wish you'd known …

When you first started saving? Saving is simple. Pay off debt first, then add to 401(k).

When you first started investing? I took me a while to figure out my comfort level in risk. What helped me was tracking my contributions vs what I earned in investments each month.

Anything you'd like to add?

Money is not complicated. You either have to work more, make more or spend less. It's that simple.

Stop worrying what the neighbors have and associate with people of your own financial class and be grateful for what you have, not ungrateful for what you don't have.

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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You might know that certain ages matter in retirement planning: 59½, 62, 65 … these numbers come up in articles, in conversations, in the back of your mind when you're wondering whether you're on track.

Knowing a number exists and knowing what to do with it are different things.

I've worked with many people in their 50s and 60s who pay close attention to their finances for the first time, or finally getting serious after years of unmet intentions.

What I've consistently found, as a financial planner and educator with more than a decade of experience, is that the milestones themselves aren't the hard part; it's that nobody lays them out in order.

Here's my attempt to do that.

Age 50: The catch-up window opens

Turning 50 unlocks one of the first major financial planning opportunities you might not be fully taking advantage of, and I say that having watched plenty of people sail right past it.

Once you reach age 50, you can make catch-up contributions to your retirement accounts, putting away more than the standard annual limit.

For 2026, the standard 401(k) contribution limit is $24,500. At 50, you can add an additional $8,000, bringing your total to $32,500 per year.

For IRAs, the 2026 limit is $7,500, with a $1,100 catch-up for those 50 and older, for a total of $8,600.

If you feel behind on retirement savings, this is the moment to recalibrate. The math of compounding can still be significant in your 50s. Extra contributions in your 50s still have 10 to 15 years to grow before you need them.

Age 55: The HSA catch-up and the rule of 55

Two useful planning tools arrive at age 55.

If you're enrolled in a high-deductible health plan, you become eligible for a $1,000 catch-up contribution to a health savings account (HSA).

For 2026, the standard HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage. The catch-up brings your individual limit to $5,400 and family limit to $9,750 if age 55 or older.

An HSA is one of the most tax-efficient accounts available for retirement: Contributions are pretax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free as well.

You must be enrolled in an HSA-eligible high-deductible plan to contribute, and you generally can't make HSA contributions for any month you're enrolled in Medicare.

The second tool is the Rule of 55. If you separate from service during or after the calendar year in which you turn 55, you might be able to take penalty-free withdrawals from your current employer's 401(k) or 403(b).

This rule doesn't apply to IRAs, and your plan must permit these distributions, so confirm the rules with your plan administrator before relying on this strategy.

Age 59½: Penalty-free withdrawals begin

If you think 59½ is too old to celebrate a half birthday, think again.

At age 59½, you can begin taking withdrawals from your IRAs and 401(k)s without the 10% early withdrawal penalty. You'll still owe income taxes on pretax distributions, but the penalty disappears.

Many people are better off leaving retirement assets untouched as long as possible. Reaching 59½ doesn't mean you should start withdrawing. It means you have flexibility you didn't have before.

I've had clients who spent years feeling trapped by the penalty, not realizing how close they were to having real options. Knowing the gate is open changes how people think about their plan, even when they have no intention of walking through it yet.

Age 60: A different door for surviving spouses

Most people assume their own Social Security benefits can't start until age 62. For widows and widowers, there's an earlier option.

Surviving spouses can begin collecting Social Security survivor benefits as early as age 60. Claiming at age 60 generally means accepting a permanently reduced survivor benefit, so the timing deserves careful consideration.

The planning angle that's often missed is this: Survivor benefits aren't subject to deemed filing. A surviving spouse might be able to claim survivor benefits first and let their own retirement benefit continue growing, then switch later at 70 for a higher amount. The reverse approach works, too.

I've heard from widows who had no idea this flexibility existed and had already left significant money on the table by defaulting to whatever Social Security suggested at the window.

The difference between a thoughtful strategy and a default one can add up to tens of thousands of dollars in lifetime income.

If you've lost a spouse and haven't had this conversation with a financial planner or a Social Security specialist, have it before you file anything.

Ages 60 to 63: The super catch-up

The SECURE 2.0 Act introduced a higher catch-up limit for people in this specific age range, and most haven't heard of it yet.

Individuals age 60, 61, 62 and 63 who participate in a 401(k), 403(b), governmental 457 plan or the federal Thrift Savings Plan are eligible for a super catch-up contribution.

For 2026, that limit is $11,250, which is significantly more than the $8,000 catch-up available at 50. Someone in this window can contribute up to $35,750 to their 401(k) in 2026 alone.

For anyone trying to maximize retirement savings in their final working years, this four-year window can be one of the most valuable opportunities to accelerate tax-advantaged savings.

One important planning note: If your prior-year FICA wages from your current employer exceeded $150,000 in 2025, SECURE 2.0 generally requires your catch-up contributions to be made as Roth contributions using after-tax dollars.

Not every employer plan has implemented these changes in the same way, so it's worth confirming with your plan administrator how your plan handles catch-up contributions.

Age 62: Early Social Security

At age 62, you can begin claiming your own Social Security retirement benefit.

Claiming before your full retirement age reduces your monthly benefit permanently, and the reduction can be substantial depending on how early you file.

Meanwhile, delaying benefits until age 70 results in a higher monthly benefit because delayed retirement credits stop accruing at age 70.

For most people in good health, the math tends to favor patience, but longevity, cash flow needs and your overall plan factor into the right answer.

Age 63: Watch your income for Medicare's sake

This is the one that tends to sting the most when people find out about it too late.

Medicare uses a two-year lookback to set your premiums, which means your income at 63 directly affects what you'll pay when you first enroll at 65. If your income exceeds certain thresholds in those lookback years, you'll owe IRMAA, or the income-related monthly adjustment amount, an additional surcharge on top of your standard Medicare Part B and Part D premiums.

In 2026, IRMAA kicks in at $109,000 in modified adjusted gross income for single filers and $218,000 for married couples filing jointly.

The surcharges operate as cliffs, not gradual phase-ins. Crossing a threshold by even a dollar triggers the full surcharge for that tier, which can add thousands per year to your Medicare costs.

Before generating a large amount of additional income, such as from a Roth conversion or significant capital gains, estimate both the income tax consequences and any potential IRMAA surcharge. Looking at only the tax bill can lead to expensive surprises two years later.

Not sure if you're going to be impacted by IRMAA? Take advantage of a retirement planning tool to project your income sources and see for yourself. (Note: I am head of support and a financial planning educator at Boldin.)

Age 64 and 9 months: Start your Medicare clock

For most people, Medicare's initial enrollment period opens three months before your 65th birthday and closes three months after the month you turn 65.

Missing this window can result in late enrollment penalties that stay with you permanently. Set a reminder now.

Medicare's rules are complex enough that it pays to spend some time with a specialist before the window opens, not after.

Age 65: Medicare begins, HSA contributions end

At age 65, you're eligible for Medicare. Once you're enrolled in any part of Medicare, you generally can't make HSA contributions for any month you're covered by Medicare.

Funds already in the account remain yours to use for qualified medical expenses tax-free, and you can use the money for any expense without penalty, though non-medical withdrawals will be taxed as ordinary income.

Many people contribute aggressively to their HSAs in their late 50s and early 60s specifically to cover healthcare costs in retirement. If that's your strategy, plan around the contribution cutoff.

Age 70½: Qualified charitable distributions

At age 70½, a valuable tax planning opportunity becomes available for people who are charitably inclined and own an IRA.

A qualified charitable distribution allows you to direct up to $111,000 per year (in 2026) from your IRA directly to a qualified charity, and if you're married, your spouse can do the same from their own IRA, for a combined total of $222,000.

If you're already subject to required minimum distributions (RMDs), the amount counts toward satisfying your RMD for the year while remaining excluded from your taxable income. This is a useful tax planning tool, particularly for people who take the standard deduction.

Ages 73 to 75: RMDs

At some point, the IRS requires you to start withdrawing from tax-deferred retirement accounts regardless of whether you need the money. RMDs catch more people off guard than almost anything else in retirement planning.

When RMDs begin depends on your birth year. If you were born from January 1, 1951, to December 31, 1959, they start at 73. If you were born on or after January 1, 1960, they begin at 75.

Failing to take your RMD results in a 25% penalty on the amount that should have been withdrawn. The penalty might be reduced to 10% if the mistake is corrected in a timely manner and other IRS requirements are met.

The real issue is that large RMDs can push you into a higher tax bracket, make more of your Social Security taxable, and trigger IRMAA surcharges you weren't expecting.

Planning around RMDs in advance, through Roth conversions, charitable giving or careful withdrawal sequencing, is one of the most underrated conversations in retirement planning.

These milestones don't exist in isolation

Every conversation I have with someone approaching retirement eventually comes back to the same point: These decisions don't happen in a vacuum.

How you handle catch-up contributions in your 50s affects your tax situation in your 60s, which affects your Social Security timing, which shapes your RMD exposure a decade later. The decisions compound over time in both directions.

You don't have to figure this out alone. Whether you work with a financial planner or use retirement planning software, mapping these milestones in advance and testing different scenarios can help turn a long list of rules into a coordinated retirement planning strategy.

The more decisions you make proactively, the fewer costly surprises you're likely to face later.

Related Content

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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.

Most "America 250" travel guides will point you toward the crowded, cobblestoned streets of Philadelphia or Boston — and while those historic hubs certainly earned their place in the history books, the true American story doesn't end at the original 13 colonies. If you are looking to give your grandchildren a deeper sense of the nation's heritage, the best classroom isn't a packed museum line; it's the open road.

These four itineraries trade predictable monuments for sweeping coastlines, ancient mountain passes and hidden historic stops, offering a compelling backdrop for passing down stories and building memories.

Out West: the Pacific Northwest & the corps of discovery

Trace the final leg of the expedition that reshaped America: a road trip following the Columbia River Gorge from Portland to Astoria's Fort Clatsop, ending where Lewis and Clark first saw the Pacific at Cape Disappointment.

The route: Portland to Columbia River Gorge to Astoria (Ft. Clatsop) to Cape Disappointment

Columbia River Gorge: Drive past stunning waterfalls and stop at the Columbia Gorge Discovery Center to learn how the expedition navigated these treacherous waters. The Columbia Gorge Discovery Center’s Raptor Program is capable of wowing kids and adults. You can visit the enclosure of resident bald eagles Liberty and Ferguson, ages 17 and 23 respectively, for free.

Lewis and Clark National Historical Park (Fort Clatsop): Located in Astoria, Oregon's oldest city, is a replica of the log fort where the expedition spent the brutal winter of 1805–1806. Kids can interact with rangers dressed in buckskins, try their hand at making candles from tallow and explore the dense coastal rainforest.

Cape Disappointment State Park: Cross into Washington to see where the expedition finally saw the Pacific Ocean. The dramatic clifftop lighthouse is unforgettable. It's still in use and open for tours. Visitors can also wander through the ruins of World War II-era bunkers and coastal defense batteries.

• Summer bonus: Chasing waterfalls & picking berries. Summer brings long, gloriously sunny days to the Pacific Northwest. Stop at the 620-foot Multnomah Falls and hike without needing a rain jacket. Take a detour through the Hood River Fruit Loop, where the kids can pick fresh berries and cherries.
• Fall bonus: The salmon run & coastal mist. October brings the legendary salmon runs to the Columbia River. You can visit the Bonneville Lock and Dam to watch thousands of massive salmon leap up the underwater "fish ladders." Plus, the coast at Cape Disappointment gets its signature dramatic, misty autumn aesthetic.

The South: The southern campaign & Overmountain victory (North Carolina & South Carolina)

While the Northeast gets the credit for 1776, the Revolutionary War was actually won in the South. This trip blends rich Southern history with the spectacular background of the Great Smoky Mountains. The Carolinas are hosting extensive "SC250" and "NC250" events, featuring large-scale autumn encampments and live blacksmithing.

The route: Charlotte (NC) to Kings Mountain to Cowpens (SC) to Asheville (NC).

Kings Mountain & Cowpens National Battlefields: These two parks preserve the sites of back-to-back American victories. The Kings Mountain State Park visitor center offers an interactive junior ranger program that explains how frontier "Overmountain Men" turned the tide of the war. Cowpens National Battlefield commemorates a decisive battle in the Revolutionary War, which ended in defeat for British forces under General Charles Cornwallis.

The mountain finish: End the trip by driving into Asheville to experience the lush greenery in the summer and peak foliage of the Blue Ridge Mountains in the fall.

• Summer bonus: Lake Lure & mountain streams. Beat the Southern summer heat by sliding into the cool, mountain waters. You can stop at Lake Lure (where Dirty Dancing was filmed) for a beach day surrounded by green mountains, or take the kids gem mining and tubing down the French Broad River.
• Fall bonus: Peak Blue Ridge foliage & reenactments. October is the absolute pinnacle for leaf-peeping in Asheville. Additionally, early autumn is when the park service hosts the Overmountain Victory Trail celebrations, featuring massive living-history encampments where volunteers walk the exact path the frontier militia took to the battlefields.

The Southwest: a crossroads of cultures

To truly celebrate the American tapestry for America 250, look to the Southwest, where Indigenous, Spanish and Anglo histories collided to shape the nation. Long before the first bricks of the thirteen colonies were laid, these high-desert landscapes were home centuries of rich cultural exchange.

The route: Albuquerque to Santa Fe to Taos

The Santa Fe Plaza: Celebrate America's diverse roots in the oldest capital city in the U.S. Families can explore the Palace of the Governors, part of the New Mexico History Museum, and buy authentic jewelry directly from Native American artisans under the portal.

Pecos National Historical Park: Just outside Santa Fe, this park features the ruins of an ancient Pueblo village alongside a 17th-century Spanish mission church, right on an old Santa Fe Trail trade route. It brilliantly illustrates the centuries of history that predated 1776.

Taos Pueblo: Take a day trip to a living Native American community that has been inhabited for over 1,000 years. Located at the base of the beautiful Sangre de Cristo Mountain range, this National Historic Landmark is open on weekends only from 9 am to 4 pm. If you've got an American Girl Doll fan, you can visit the Hacienda de los Martinez, which was the inspiration for the doll Josefina Montoya's home. It's a seven-minute drive from downtown Taos.

• Summer bonus: Santa Fe Indian Market & alpine hikes. While lower elevations are hot, Santa Fe and Taos are at high altitudes and stay quite comfortable. (For those who might be sensitive to altitude, keep in mind that you may need time to acclimate.) August brings the world-famous Santa Fe Indian Market, a celebration of Native American art, music and food. You can also take the chairlift up Taos Ski Valley for high-alpine summer hiking.
• Fall bonus: The balloon fiesta & roasting chiles. Early October features the Albuquerque International Balloon Fiesta, when hundreds of hot-air balloons fill the sky at dawn. The smell of autumn, and the official "state aroma", in New Mexico is the aroma of fresh green chiles being roasted in giant tumbling drums on every street corner.

The Midwest: innovation, labor & The Great Migration (Illinois & Indiana)

The trip through the Midwest tells the story of how America transformed from an agrarian society into an industrial superpower. Taking a road trip through Illinois and Indiana reveals the grit, innovation and diverse voices that built modern America.

The route: Chicago (Pullman) to Indiana Dunes to Fountain City (Coffin House) to Indianapolis

The Pullman Centennial: Visit the Pullman National Historical Park, a preserved 1880s company town that highlights the American labor movement and the pivotal role of the African American Pullman Porters.

Indiana Dunes National Park: Just across the state line, hike towering sand dunes framed by brilliant oak trees, celebrating America's conservation and National Park legacy. As part of their "The 1966 Hiking Challenge," the park is offering 19 weekly ranger-led hikes every Saturday at 8:00 am through August.

The Indiana State Museum (Indianapolis): They are hosting dedicated America 250 programming, including exhibits on the Underground Railroad in the Midwest, showcasing the region's commitment to freedom and human rights.

The "Grand Central Station" legacy: This unassuming brick house in Fountain City, Indiana, is where Levi and Catharine Coffin helped more than 1,000 freedom-seekers escape to safety. It's arguably the most successful "station" on the entire Underground Railroad.

They have an interactive visitor center next to the historic home that does a fantastic job of translating this heavy history into digestible, moving stories for children. You can tour the home and see the internal hiding places, including a hidden upstairs closet where entire families were concealed behind furniture, and a basement kitchen built with a secret indoor well so neighbors wouldn't see the Coffins hauling extra water for guests.

• Summer bonus: Lake Michigan beach days. This history trip can turn into a legitimate beach vacation. Indiana Dunes National Park features miles of sandy beaches and warm lake water that feels like the ocean without the salt. In Chicago, you can take a boat cruise down the river to stay cool.
• Fall bonus: Apple orchards & haunted trails. The drive from the Indiana Dunes down to the Coffin House takes you right through Indiana’s agricultural heartland. Stop at Huber's Orchard or Tuttle Orchards for fresh apple cider slushies, pumpkin picking and corn mazes. Additionally, Indianapolis hosts fantastic historic autumn ghost tours that weave local history with spooky seasonal fun (best for older kids or teens).

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
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

The term cruise ship typically brings to mind a mammoth vessel navigating through the ocean waves. But a growing number of travelers are trying out a different kind of water-based vacation: river cruises.

Unlike many ocean excursions, on ships featuring everything from casinos to climbing walls on board, river cruises focus more on the places you visit than the vessel you take. "Although the title is ‘river cruising,’ this is really a land experience as much as a water experience," says Jeremy Palmer, president of Tauck, a tour and river cruise operator.

For many river cruisers, that distinction is a big part of the appeal. "A lot of my first-time river cruisers are people who don’t like cruises," says Diane Frisch, owner of the travel agency Diane Frisch Destinations. A recent traveler survey from Cruise Lines International Association found that about one in five first-time cruisers opted for a river cruise instead of an ocean voyage.

All signs point toward those numbers growing. Executives at Viking Holdings, the largest river cruise company by a large margin, said almost 40% of available 2027 reservations were taken by early May of this year. The cruise industry is paying attention: Celebrity Cruises is launching a line of river cruises next year.

"That core market of people with time, money and the desire to travel has never been bigger," Palmer says.

The appeal is multifaceted: Most river cruise ships hold a maximum of 200 passengers, so you can expect more personalized service, better food and fewer lines. "What a lot of people really enjoy is the level of service you get," says Tilly Pearson, trip planner at tour operator Adventure Life.

Hank Schrader, co-owner of Dream Destinations, a travel agency that specializes in river cruises, says the number of activities people can do and see while in port has exploded over the past decade, and some cruise lines have entire itineraries dedicated to pursuits such as cooking or cycling.

"What’s changed is the number of different offerings," he says. "Before, it was like, ‘Hey, here's your daily tour.’ Now most lines are offering significantly different options."

A variety of choices.

Cruisers have a wide range of options, from price point to activity level to on-shore excursions. Consider your travel preferences, budget and what kind of vibe you're looking for.

While Schrader notes that river cruises don't have attractions such as on-board nightclubs and live entertainment each evening, some river cruises are livelier than others, with wine-tasting dinners or local musicians coming on board at port to perform.

River cruises historically catered to older adults, but there's evidence that's shifting. According to market research firm Future Market Insights, about a fourth of passengers are between 46 and 55. Cruise lines are creating itineraries aimed at a younger crowd, such as visiting Germany during Oktoberfest or touring wine country by electric bike.

If you want to cruise as a family, consider the age and maturity of your kids. Some cruise lines have age minimums, and there's generally no kid-oriented programming. "We recommend they're well traveled or that parents bring some entertainment on board," Pearson says.

One notable exception is Ama-Waterways, which has a partnership with Disney. European river cruises under the Adventures by Disney banner include "adventure guides" and kid-friendly activities. Be aware, though, that while your kid might be thrilled to see the real-life inspiration for Cinderella's castle in Germany, you won't spot so much as a whisker of Mickey or other characters on board.

While walking tours at each port are typical, travelers who want to get their blood pumping and exert a little more energy can choose from itineraries that include hiking, bicycling, kayaking and other activities. One AmaWaterways vessel, the AmaMagna, even has a full-size pickleball court.

Pearson says the Active & Discovery cruises from Avalon Waterways appeal to active travelers with programs that are designed to keep you moving. "You're off the beaten path a little bit more; you're doing more unique things," such as kayaking in a canal or hiking a mountain.

Learning local history in each port is an indelible part of the river cruise experience.

For travelers seeking a deeper dive into local culture, AmaWaterways offers European itineraries with program experts from the Smithsonian Institution. American Cruise Lines is known for its knowledgeable, passionate local guides.

Managing the costs.

If you’re used to seeing Caribbean cruises advertised for well under $1,000 per person, you might want to sit down. "I’d say $4,500 to $5,000 per person is very entry-level pricing," Pearson says. Travel advisers say $12,000 to $15,000 per couple for a seven- or eight-night river cruise is typical.

The up-front cost might be steep, but Schrader argues that cruisers can get as much — or more — value compared with taking a land tour once you factor in lodging, transportation, meals and sightseeing.

"The price is going to be pretty much comparable, and you’ve taken away the entire hassle factor" because you only have to unpack once rather than change hotels every night.

One big reason for the high price tag is that river cruise pricing is generally all-inclusive. With a few caveats (more on those below), many of the perks you'd pay for on an ocean cruise — alcohol, guided tours, port excursions — are typically included in the cost. Some cruise lines even bundle gratuities into the rate.

Still, travel experts say there are some tactics that can help keep your costs in check, although a few of them do come with trade-offs.

Don’t count on last-minute bargains. With rare exceptions, you won’t find the kind of fire sales you sometimes see for flights within a few weeks of departure. Viking chairman Torstein Hagen told investors in May that advance bookings for the 2027 season were up 21% compared with a year earlier. Another reason to book early is that cheaper cabin categories usually go quickly.

Seek out discounts. Most cruise lines offer discounts, albeit modest ones, for first responders, military service members and repeat customers. Some also offer referral discounts if you’re traveling with friends. Another common incentive: Discounted or free airfare if you book your flights through the cruise line.

Consider your travel style. Do you like a plethora of shore excursions? Free-flowing liquor? Despite having more inclusive pricing than ocean cruises, major river cruise lines do vary somewhat in what falls under the umbrella of all-inclusive, which gives you opportunities for saving money. For instance, non-drinkers might save by booking a cruise that has a lower price point and doesn’t include hard liquor.

Skip summertime. All other things being equal, summer is the most popular — and most expensive — time to go on a river cruise. "There is a shoulder season. It’s getting smaller, but generally, in February, March, April or November, you can get a better rate in Europe just because the weather isn’t as nice," Palmer says.

Solo travelers should be selective. Traditionally, pricing has been even tougher for solo travelers because cruise lines want to recoup the money they would otherwise earn if a second passenger were in the cabin. Single supplements can equal or even exceed 100% of the per-person rate on most sailings — meaning that a solo traveler could pay twice or more the per-person price that would apply for double occupancy — but that’s changing as interest in solo cruising soars.

"This market has grown tremendously—about 40% over the past three years," says Marilyn Conroy, vice president of sales and marketing for Riviera Travel, a U.K.-based cruise and tour operator.

To meet this demand, Riviera is launching a 68-passenger vessel next year that Conroy describes as the first river cruise ship for solo travelers. A number of other lines reduce or waive single supplements for certain voyages or for certain cabin categories.

Logistics to know.

River cruise pros say there are some things you need to know and do before beginning your journey to get the most out of your trip.

Book early. Even if you’re not bargain-hunting, it’s smart to book well in advance. "This is not something you do six months out," Palmer cautions. "You might not get exactly what you want even if you book a year out," he says, adding that Tauck customers book an average of 18 months ahead.

Travel agents say it’s possible to book some itineraries closer to your departure date — think six to nine months — but warn that you might find limited sailing dates and cabin categories available.

Try using a travel agent. While blogs and forums such as Cruise Critic have crowdsourced wisdom you can use to do your own research, enlisting a travel agent who is familiar with the complexity of river cruise itineraries and the nuances among cruise lines can be worthwhile. Almost two-thirds of people who book cruises (including ocean cruises) use travel agents, according to a report from Cruise Lines International Association.

"The average consumer cannot tell the difference between the lines," Schrader says. "When you’re spending this kind of money, you want to make the best choice you can." He suggests vetting travel agents by asking whether they’re certified by the American Society of Travel Advisors or CLIA. And ask whether they’ve ever been on a river cruise; ideally, you want an agent with firsthand knowledge.

(Maybe) book your own airfare. Letting the cruise line book your flights to and from the destination on one of their partner airlines takes the decision-making out of your hands — which could be a plus or a minus. You won’t have as much choice as you would with a booking platform such as Travelocity: The airline you fly, the times of your flights (as well as the length of any layovers you might have) and the seats you get are largely out of your hands.

That said, booking flights with the cruise line might make sense for some travelers. "Some people like having everything in one package, and some companies will give you free airport transfers," Frisch says.

Many cruise lines promote discounted or even free airfare on select sailings, and booking airline tickets through the cruise line is smart if you’re using its travel insurance (because the policy covers only what you booked through the cruise operator). But if you have strong preferences about which airlines you fly, when you fly and where you sit, you might be better served by booking on your own.

Take an extra day (or two). Experts suggest arriving a day before your cruise departs just in case your flight is delayed, because the ship will sail whether or not you’re on board. Most river cruise itineraries include the option of booking one or more days at a hotel either before or after your voyage. An increasing number of tour operators have hybrid land-water itineraries that can include several more days of touring on land. Travel pros say these are especially popular for African and Asian river cruises.

Look into travel insurance. The high price tag that typically comes with a river cruise makes travel insurance a smart way to cover your investment. Expect to pay about 10% of the cost of the trip.

Frisch says that most travelers can probably get a better price buying a policy from a third-party provider, such as Allianz Travel or Travelex, compared with purchasing it from the cruise line; travelers in their upper seventies and older, however, are often better off with a policy from the cruise operator because premiums for older travelers can be sharply higher with other providers.

Cruises to consider.

European waterways offer the classic river cruise experience, and these itineraries remain extremely popular. But travel pros say there also are terrific options in far-flung locations — as well as in your own backyard. Prices below are per person and based on double occupancy, unless otherwise noted.

Europe. A significant portion of river cruises are on European waterways: Cruisers have their pick of routes and price points, with itineraries along the Danube, Rhine, Rhone and Seine especially popular.

Travelers looking for an iconic journey might consider Viking’s 15-night exploration of the Danube, Rhine and Main rivers. "The 15-day Budapest-to-Amsterdam cruise is a home run. If you want to get river cruising in a nutshell, that’s absolutely the best route to take," Schrader says.

Highlights include medieval castles, Gothic cathedrals and picturesque windmills at UNESCO World Heritage sites. Most summer 2027 sailings start between roughly $5,000 and $6,000.

For active travelers, Pearson recommends Avalon Waterways’ Active & Discovery Rhine River cruise from Amsterdam to Basel. (The Netherlands is broadly popular for cruises featuring cycling expeditions because of the region’s flat terrain.)

In addition to excursions via kayak and bicycle, the seven-night cruise includes hiking, visits to breweries and a French-food tour. For the 2027 season, sailings start below $5,000 per person for most dates.

A region that’s rising in popularity is the Iberian Peninsula. "You get a good bang for your buck in Portugal," Riviera Travel’s Conroy says. Riviera has a gastronomy-themed, seven-night tour along the Douro River through Spain and Portugal’s most well-known wine regions. Sailings for 2027 start at about $4,400 per person, although promotional offers can knock more than $1,000 off those rates.

For families, a real-life magical adventure is the Adventures by Disney seven-night Danube River Christmas-market cruise.

Recommended for kids ages 8 and up, highlights include visits to famous Christmas markets in places such as Vienna and Salzburg and tours of sites from The Sound of Music. Prices for 2027 sailings start at about $6,700 for adults and $6,000 for kids under 12.

The U.S. You can get your fill of regional scenery and culture without going abroad. American Cruise Lines has "really good history and storytelling," Pearson says, adding that the local tour guides are deeply knowledgeable about the area and usually from families who have lived there for generations. If you really want to immerse yourself in nostalgic Americana, you can even travel via an old-fashioned paddle wheeler. (Don’t worry — the ships and all the amenities are modern.)

American Cruise Lines’ lower-Mississippi cruise attracts history and Civil War buffs. The eight-night cruise ferries travelers between New Orleans and Memphis, with many 2027 sailings starting between roughly $4,000 and $6,000.

Travelers with time on their hands can watch the scenery change from bayous to bluffs on a 22-night trip that covers the entire river, from New Orleans to St. Paul, Minn., on voyages from American or Viking. For 2027 sailings, per-person, double-occupancy fares start at roughly $16,000 for American and roughly $17,000 for Viking.

Another popular itinerary lets you follow in the footsteps of explorers Meriwether Lewis and William Clark in the Pacific Northwest via the Columbia and Snake rivers. An eight-night voyage on American starts at about $6,000 for most summer 2027 sailings.

The rest of the world. Seasoned river cruisers looking for adventures outside Europe or the U.S. have a growing number of options as river cruise companies add new destinations.

Mekong River cruises that wind through Vietnam and Cambodia often include an overland journey to Siem Reap and the temples of Angkor Wat, a UNESCO World Heritage site. "The Mekong is very, very well loved," Pearson says. "If people want a unique experience, that’s one to look at."

A 14-night voyage on Emerald Cruises & Tours also includes time in vibrant Ho Chi Minh City, traditional villages and tranquil temples. Many 2027 sailings start in the $5,000 range, and Emerald’s fares include gratuities.

Many of the cruises that traverse Egypt’s Nile River are land-water hybrid tours to incorporate visits to the Great Pyramids, the Great Sphinx of Giza, and Cairo’s historical sites and museums. Tauck’s nine-night journey includes a four-night Nile cruise highlighting ancient temples and monuments, as well as a private, after-hours visit to King Tutankhamun’s tomb.

Prices and dates for 2028 sailings have not been released yet; prices for 2027 sailings start at about $13,000, but they were recently sold out.

Colombia’s lush mountains and vibrant culture are the draw in AmaWaterways’ seven-night cruise along the Magdalena River. Passengers on this under-the-radar adventure begin their journey in colorful Cartagena and get to experience traditional music and dance, historic architecture, and lush countrysides.

Spring 2027 sailings begin around $4,000, with prices dropping in the warmer months.

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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If a sweltering summer has you longing for a place with four vibrant, distinct seasons, Ohio may be calling.

While many know the Buckeye State for its sprawling farmland and thriving sports culture, Ohio is also a Midwest powerhouse for expanding tech, healthcare, and advanced manufacturing sectors, according to economic development data.

And in addition to job opportunities, the state offers a lower cost of living for major expenses like housing, and average prices on everyday items like groceries and utilities.

Best of all, Ohio lets you keep more of your hard-earned money thanks to a friendly 2.75% flat income tax rate, state tax-free Social Security income, and zero estate or inheritance taxes for your heirs.

So if you're ready to enjoy four true seasons without breaking the bank, here are the ten cheapest places to live in Ohio.

Cheapest places to live in Ohio

After ranking property tax bills from highest to lowest per county in Ohio, one thing’s for sure: Rural areas win out. You can generally find more affordable living in the countryside than in the hustle and bustle of, say, Columbus or Cleveland.

If you’re game to explore rolling hills, state parks, and local history (and maybe want to commute for other enjoyments), check out these cheap places to live in Ohio.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties to live in Ohio.

Jackson County

Median property tax bill: $1,363

Median home price: $150,700

Homes are relatively affordable in Jackson County, with the median sitting right around $150,000. Property tax bills are similarly budget-friendly, averaging roughly $1,363 per year according to the latest data from the Tax Foundation.

Located about 90 minutes southeast of Columbus, Jackson County is deeply rooted in rich Appalachian foothill heritage and historic mining tradition.

Outdoor enthusiasts can hike scenic, cliff-lined forest trails at Lake Katharine State Nature Preserve, enjoy peaceful boating and fishing at Jackson Lake State Park, or browse rural bakeries, blacksmith shops, and greenhouses operated by the local Amish community.

Plus, every fall, the region hosts the famous Jackson County Apple Festival. Spanning nearly a week, this event fills downtown Jackson with parades, carnival rides, marching bands, and of course, tons of local craft and apple vendors. Residents partake of fresh-picked apples, hot cider slushies, and homemade apple butter cooked in traditional copper kettles.

Searching for a welcoming, down-home atmosphere paired with a remarkably low property tax bill? Check out Jackson County, Ohio for a classic slice of Midwest pie.

Adams County

Median property tax bill: $1,356

Median home price: $164,200

Nestled along the banks of the Ohio River, Adams County carries the highest median home price on our list, hovering around $164,200. However, despite higher home values, the median annual property tax bill remains remarkably low at just $1,356.

Geographically, Adams County is characterized by its rolling wooded hills, sweeping prairie patches, and dramatic limestone gorges. Nature lovers may spend countless hours hiking through the gigantic Edge of Appalachia Preserve or birdwatching along the river.

Much like Jackson County, Adams is also home to a thriving Amish community. Visitors can stop by bakeries, quilt shops, and hand-built furniture stores. The area also exudes a nostalgic, old-school Americana vibe, featuring a timeless local diner and historic shops like Blake Pharmacy in West Union.

Come to Adams County, Ohio, for the surprisingly low property tax bill, but stay for the quiet, down-home lifestyle and breathtaking natural scenery.

Pike County

Median property tax bill: $1,355

Median home price: $163,800

Pike has the second-highest median home price on our list, sitting just under $164,000. But property taxes are only $1,355, according to U.S. Census Bureau data, making the county the 8th-cheapest place on our list.

If you're seeking a lively mix of outdoor adventure and classic Midwest festival culture, Pike might just have you covered. Water sports enthusiasts can go boating, water skiing, and tubing on Lake White State Park. Or, for something a little quieter, there's paddling, fishing, and disc golfing at nearby Pike Lake State Park.

Families can head to Long's Retreat Family Resort in Latham for a full day of go-karting, mini-golf, and swimming at the splash pad.

And the excitement continues into summer and fall with the annual Pike County Fair, including tractor pulls and demolition derbies, in addition to a live bluegrass festival. Plus, for a unique trip back in time, history buffs can explore Dogwood Pass — a living-history Old West town complete with an authentic saloon, jail, chapel, and live stunt shows.

If you want affordable housing, inland lakes, and plenty of weekend entertainment, Pike County, Ohio might make a compelling destination for your family.

Harrison County

Median property tax bill: $1,279

Median home price: $121,500

Harrison County home prices are among the most accessible in the Buckeye State, with the median home value sitting around $121,500. Annual property tax bills are similarly budget-friendly, averaging roughly $1,279 according to data from the Tax Foundation — cheaper than many neighboring Eastern Ohio counties.

Love the water? Harris is famous for its "Big Three Lakes" — Tappan Lake, Clendening Lake, and Piedmont Lake. Together, these reservoirs offer more than 4,200 acres of open water for kayaking, boating, and fishing.

The lakes are flanked by over 15,000 acres of public parklands and picturesque campgrounds, which means outdoorsmen can also explore more than 40 miles of the famous Buckeye Trail, alongside 20,000 acres of public hunting grounds.

But if you're not outdoorsy, no worry; the county seat of Cadiz adds a touch of classic Hollywood history to the rural landscape. As the birthplace of Clark Gable, the "Gone with the Wind" actor often dubbed the "King of Hollywood," Cadiz hosts an annual birthday celebration and features a dedicated museum filled with Gable memorabilia.

Afterward, residents can unwind with a tasting at one of the area's scenic countryside wineries.

Stop by Harrison County for a weekend on the lake or a tour of local Hollywood history — and linger for the substantial property tax savings.

Morgan County

Median property tax bill: $1,268

Median home price: $150,900

Morgan County highlights a median home price tag of only $150,900. The median property tax bill is also pretty low, sitting around $1,268, per the latest data from the U.S. Census Bureau.

Tucked into the foothills of the Appalachian Mountains in southeastern Ohio, Morgan is nicknamed "The Front Porch of the Great Outdoors" by county officials.

The area is famous for the Muskingum River Parkway, home to a historic series of hand-operated river locks — one of the last remaining functional systems of its kind in the nation.

Residents can spend peaceful weekends navigating the river, driving quaint backroads past covered bridges, or hiking and kayaking through nearby Burr Oak State Park and the expansive Jesse Owens State Park.

The county is also anchored by historic villages like McConnelsville, where brick-lined streets have 19th-century architecture, local diners, and independent shops. Between its tranquil riverfront views and tight-knit small towns, Morgan County delivers a timeless rural vibe.

Ergo, whether you're in the market for a slower pace of life or quite low-cost home options, Morgan County could be your next destination.

Jefferson County

Median property tax bill: $1,257

Median home price: $127,800

Jefferson County home prices are pretty low compared to others on this list, at around $127,800. Property taxes are also relatively cheap, as the median bill is only $1,257, according to 2026 Tax Foundation data.

Situated along the Ohio River in eastern Ohio, Jefferson is known as the birthplace of famous entertainer Dean Martin.

Today, the county is a lively hub of outdoor recreation and riverfront living. Friendship Park in Smithfield spans 1,320 acres and includes camping, mountain biking, horseback riding, and a spacious 80-acre lake ideal for fishing and boating.

When winter arrives, the county seat of Steubenville transforms into a holiday destination featuring the region's famous Nutcracker Village. Over 200 life-sized handcrafted nutcrackers line the historic downtown streets along with nativity displays, festive hayrides, an open-air Advent Market, and light shows at Historic Fort Steuben.

For a delightful blend of historic charm, outdoor parklands, and winter festivities, Jefferson County offers a rich quality of life combined with a low property tax bill.

Meigs County

Median property tax bill: $1,238

Median home price: $119,300

Meigs is only a few dollars cheaper than Jefferson in terms of annual property taxes, with a median bill of roughly $1,238. However, the county has the lowest median home price on the list, at just over $119,000. This might be due to Meigs's quiet, rural footprint of approximately 21,600 residents, per the U.S. Census Bureau.

Don't let the uncrowded area fool you, though — there's still plenty to do in this scenic corner of Ohio. Meigs has 57 miles of Ohio River shoreline alongside the 102-acre lake at Forked Run State Park. The historic river village of Pomeroy sits in a narrow strip between the river and wooded bluffs, creating a "stacked" architectural look of houses climbing into the hillside.

Downtown Pomeroy is lined with weathered 19th-century storefronts, local dining spots, and riverfront shops. Music lovers flock to the area each summer for the Big Bend Blues Bash on the riverbank, and history lovers can dive deep into Ohio's rich Civil War heritage at the Buffington Island Battlefield Memorial Park.

Leave the heavy mortgage and property tax bills behind and discover a charming, slower-paced way of living in Meigs County, Ohio.

Lawrence County

Median property tax bill: $1,215

Median home price: $144,000

Lawrence County property taxes are relatively inexpensive, as the annual median bill reaches barely above $1,200. Median home prices can also be cheap, at around $144,000, per the latest Tax Foundation data.

Bordering both Kentucky and West Virginia, Lawrence County is imbued with river history and Appalachian heritage. The county seat of Ironton played a major role in the 19th-century iron industry and is famously home to the Ironton-Lawrence County Memorial Day Parade — recognized as the longest-running Memorial Day parade in the nation, celebrating every year since 1868.

Active families also find plenty of recreation throughout the county. You can go camping, hiking, and ATV riding across the trails of Wayne National Forest. And while Lake Vesuvius is temporarily closed for paddling and swimming due to dam repairs, it's expected to reopen in September 2027.

But if you want to check out the local history, the Lawrence County Museum displays exhibits on iron furnaces, Victorian-era antiques, and artifacts from the 1920s Ironton Tanks, an early pro-football team that defeated both the Chicago Bears and New York Giants before the modern NFL era.

For budget-friendly family fun and rich sports history, you might consider putting down roots in Lawrence County, Ohio.

Noble County

Median property tax bill: $1,180

Median home price: $163,600

As the second-most affordable place to live on our list, Noble County, Ohio, boasts a median home price of just $163,600. Paired with a modest median property tax bill of $1,180 according to U.S. Census Bureau data, Noble's property taxes are lower than those in most neighboring counties.

Defined by lush, undulating hills, winding roads, and quiet farmland, Noble County is a dream for anyone seeking a peaceful rural retreat. Residents can head to Wolf Run State Park for a relaxing afternoon of fishing, swimming, or hiking along tree-lined lake trails. Or, residents can head to conservation parks to spot rare local species like the northern harrier.

Additionally, Noble is nearby The Wilds — one of the largest wildlife conservation centers in North America. Spanning about 10,000 acres, this safari park lets visitors view rhinos, giraffes, and wild horses roaming free.

Come to Noble for sweeping natural landscapes and exotic wildlife, and stay to enjoy the low property taxes.

Monroe County

Median property tax bill: $1,176

Median home price: $142,700

Monroe County is the cheapest place to live in Ohio. Homebuyers may secure a median property tax bill of just $1,176 and a relatively accessible median home price of around $142,700, according to 2026 data from the Tax Foundation.

Widely known as the "Switzerland of Ohio," Monroe has dramatic topography with steep hills and deep river valleys that somewhat resemble European mountain terrain. Rooted in the heritage of early Swiss immigrants, this spacious destination is an ideal spot for outdoor adventure — from motorcycle rides along the ridges to kayaking down Sunfish Creek.

And for art aficionados and road-trippers alike, the county offers the Monroe County Quilt Barn Tour. Residents can take the backroads to discover 20 century-old wooden barns showcasing hand-painted quilt blocks by local artist Scott Hagan, nationally known as "The Barn Artist."

So if you're looking for rugged Appalachian ridges and hand-painted barn quilts — you might say "yes" to the cheapest place to live in Ohio.

More Cheap Places

• 10 Cheapest Places to Live in Florida
• 10 Cheapest Places to Live in North Carolina
• 10 Cheapest Places to Live in Tennessee
• 10 Cheapest Places to Live in Texas

After 43 years advising families through nearly every kind of wealth transfer imaginable, I've noticed something.

The families who struggle almost never struggle because of the tax plan. They struggle because nobody had a real conversation before the money moved.

That's not how most coverage of the Great Wealth Transfer sounds. Trusts, tax brackets and estate structures dominate the conversation — and for good reason.

An estimated $124 trillion is projected to change hands in the U.S. over the next two decades, and a lot of it runs through complicated legal and tax mechanics. Getting those right matters.

But mechanics aren't what decides whether a family holds together or comes apart once the money actually moves. I've watched technically flawless estate plans blow up because the heirs were blindsided by decisions they'd never once discussed.

I've also watched messier, less elegant plans work just fine, because the family had already done the harder work of talking to one another.

Here's something that should concern every family with real assets on the line. The Federal Reserve's Survey of Consumer Finances found that the average inheritance families actually received came in well below what they expected to receive, and the gap was largest among the wealthiest families surveyed.

Most people read that as a planning or market-timing issue. I read it as a symptom. If your family's expectations and the actual plan don't match, it's a sign the plan was never really discussed out loud. The dollar figure is just the first thing to surface.

The conversation that gets skipped

Early in my career, I learned a set of principles from my mentor, Joe Gabriele, that I've carried ever since. Chief among them: Attack problems head-on, with complete transparency. That applies to markets. It applies just as much to families.

Most parents I work with have a will. Many have trusts. Far fewer have ever sat their adult children down and explained why the plan looks the way it does, what they'll be responsible for or what the family actually expects of them once the money arrives.

I had a client years ago, a business owner worth several million dollars, who built a detailed estate plan and never once discussed it with his three kids.

When he passed, one child assumed the family business would be split evenly. Another had quietly been promised it outright, years earlier, in a conversation nobody else knew about.

The estate plan was airtight. The family took over a year to speak to one another again.

Money didn't break that family. Silence did.

What I ask families to do instead

I don't tell clients to simply "loop in the kids." That's not specific enough to be useful, and vague advice rarely survives contact with an actual family.

What I ask them to do is sit down, together, and walk through these questions before a single dollar moves:

• What is each person actually going to inherit? In plain terms, not legal language.
• Why was the plan structured this way? What was the reasoning?
• What responsibilities come with it? A business, a property, a caregiving role for a sibling?
• What does the family want this money to accomplish two generations from now?

None of these require a lawyer in the room. They require the parents to be willing to have an uncomfortable conversation while they're still healthy enough to lead it.

I've sat in on dozens of these meetings. They're rarely as bad as clients fear, and the families who have them almost never end up blindsided later.

Why this matters more for advisers, and for families, than people realize

I'm at a stage in my career where I think about succession constantly, not just for my clients but for my own practice. My son and business partner are actively involved in the business today.

What I've learned firsthand is that transferring a book of business is the easy part. Transferring the judgment, the relationships and the reasons behind decades of decisions is the hard part.

It has to be modeled and explained. It can't just be inherited by default.

Families face the same challenge with wealth. A trust document tells your heirs what they'll receive. It doesn't tell them why, and it doesn't prepare them to carry it forward responsibly.

That gap is where families come apart, and it's entirely preventable.

Where to start

If you're in the position of planning a transfer, start smaller than you think you need to. Pick one conversation, maybe the reasoning behind your estate plan, and have it this year.

If you're an adult child who suspects your parents haven't had these conversations, you can be the one to raise it. In my experience, most parents are relieved when their kids ask.

The tax and legal mechanics of the Great Wealth Transfer will get sorted out. That's what estate attorneys and advisers are for.

The part that actually determines whether your family thrives afterward is the conversation nobody wants to schedule. Schedule it anyway.

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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.

You faithfully pay your recurring bills (such as utilities and insurance) with automatic payments set up from your credit card to simplify your life. Shouldn't you take advantage of that card usage beyond convenience?

Credit cards can make life easier and, when properly managed, can certainly provide some impressive perks. From purchase protection to rental car coverage, the right credit card can save you money when used responsibly.

With the right strategy and a rewards program, credit card spending can be turned into free travel in the form of flights, hotel rooms and more. This is how to do it — and how I've done it, as a wealth adviser and financial planner with more than two decades of experience.

Get to know your credit card rewards

If you already have a rewards card, you might not fully understand the rewards program and potential benefits. Start by auditing your rewards program to better understand how you earn rewards and how you can redeem them.

Whether it's free travel, travel upgrades or cash back, rewards can often outweigh the cost of the annual fee that most rewards cards have.

For example, my wife and I used our Delta Air Lines points to cover the cost of our plane tickets for a vacation in Aruba, then used our Platinum Medallion status to get us a better baggage allowance, Comfort Plus seating on the aircraft and a hot breakfast at the airport.

Had we not understood how to use our points effectively, we would have paid for these expenses out of our own pockets.

Understanding the rewards program is half the battle, as we were able to strategize to further utilize points on our trip using our American Express card, which we used to cover our hotel stay, breakfast each morning, a spa visit, discounted beach hut rental and an additional $50 credit on our American Express bill.

Choosing the right rewards card

If you don't have a rewards card, shop around for one from which you'll get the most benefit. Start with cards offering perks you know you'll use.

For example, if you take frequent trips to visit family and typically use the same airline, you might want to start with a rewards card that is specific to that airline or at least to travel.

Likewise, if you have a cause that's near and dear to your heart, you might want to investigate a card that gives rewards in the form of charitable donations.

Even if you're getting fantastic rewards, you should still consider the card's terms and conditions. Will you earn enough rewards to justify the annual fee? If the fee exceeds the perks you'll receive, or if the interest rate is significantly higher than what other cards offer, it might not be worth it overall.

If you already have credit cards with rewards, examine how you might combine or transfer your rewards as I did for my family's trip to Aruba to get all available benefits.

According to the Consumer Financial Protection Bureau, billions of dollars of credit card rewards go unused annually, demonstrating how important it is to understand and utilize your rewards instead of allowing them to expire.

Rewards are a perk, not a purpose

Research suggests that people tend to spend more when using credit cards but adding reward points to the mix makes some people spend more to earn more.

A Bankrate survey revealed that around 70% of credit cardholders carrying a balance continue to use the card in an effort to earn more rewards. Even though they're paying interest charges, they continue to add to the balance, because they're trying to rack up more points or cash back.

Notably, that same survey revealed that more than half of credit cardholders carrying a balance say that it's become harder to pay off credit card debt in the last year.

Functional magnetic resonance (fMRI) studies conducted by MIT Sloan further revealed that credit cards exploit the reward networks in the brain, providing a signal of pleasure when purchases are made using a card.

Combine that with the gamification of cards through earning or unlocking rewards, and it's easy to see how reward programs might encourage people to spend more than they should.

To be clear, when I talk about using credit card rewards to earn perks such as free travel, I'm not talking to cardholders who struggle to make their monthly payments.

I suggest taking advantage of credit card rewards if you successfully manage your cards and would like to get something extra out of your usage.

Use credit card reward programs as a tool to earn the perks you want, not as a justification to spend more.

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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.

Investors, traders and speculators pushed interest rates lower and stocks higher after softer-than-expected incoming data suggested there's little if any inflation pressure from the labor market right now. Risk-on momentum held up during a relatively quiet early August trading session, and two of the three main equity indexes made all-time weekly closing highs at its end.

Traders in the federal funds rate futures market took the odds of a rate hike at the September Federal Open Market Committee Meeting (FOMC) from 55% on Thursday to 45% following the release of the July jobs report before the opening bell on Friday.

The front-month West Texas Intermediate crude oil futures contract was down 0.5% to $76.94 per barrel. WTI was down 9.1% this week, as interested parties continue to seek solutions to open the Strait of Hormuz acceptable to both Iran and the U.S.

The 2-year Treasury yield retreated to 4.195% today from 4.245% on Thursday. The market-based measure of short-term monetary policy intentions was down 10 basis points this week from 4.291% last Friday.

The 10-year was down to 4.641% from 4.670% yesterday and 4.745% last week, and the 30-year fell to 5.192% vs 5.212% and 5.275%. There was no immediate reaction at the longer end of the yield curve to President Donald Trump reviving his effort to fire Fed Governor Lisa Cook.

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.

Markets will look forward to next week's economic calendar and the release of Consumer Price Index (CPI) and Producer Price Index (PPI) data for July before the opening bell on Wednesday and Thursday, respectively.

At the closing bell on Friday, the tech-heavy Nasdaq Composite had added 1.3% for the day and 5,2% for the week to 26,690. The broad-based S&P 500 was up 0.6% and 3.6% to 7,757, an all-time high, and the blue-chip Dow Jones Industrial Average had risen 0.3% and 3.0% to 54,036, an all-time weekly closing high.

SPCX didn't go down today

SpaceX (SPCX, +15.8%) has had a historically bad flight in the aftermath of the biggest IPO in stock market history, opening at $150 on June 12 and rising to $225.64 intraday on June 16, but falling to an all-time low of $104.83 on Monday.

Management reported expectations-beating second-quarter results after the closing bell on Tuesday, but SPCX was down 13.6% on Wednesday. The fact that Elon Musk's extraterrestrial venture posted a gain today is noteworthy because it marks the end of a four-week losing streak.

Indeed, SPCX was up 22.8% this week. According to JP Morgan analyst Arun Jain, retail investors are into SpaceX to the tune of approximately $3.6 billion since June 12.

The stock is going to be volatile as more supply of shares come to the market during what will be an extended series of lock-up expirations. We'll see whether there's demand to meet that supply over the coming months.

DOCS gets a big assist from AI

Officially, Doximity (DOCS, +32.6%) is a healthcare stock. That's just what S&P Global says, though. Today, it's trading on AI. And the trading is good.

DOCS closed at $20.66 on Thursday but traded as high as $64.99 in the pre-market on Friday and peaked at $39.99 during the regular session before closing at $27.40.

That's despite the fact that management missed Wall Street's second-quarter revenue and earnings forecast and came up short of analysts' consensus top-line estimate for the third quarter.

This move was all about the conference call and how Doximity appears to be differentiating from other software stocks. "We're the doctors' digital platform," CEO Jeff Tangney said, "and AI is just the next chapter in our growth."

Management noted that the Doximity Ask AI outperformed Anthropic’s Fable 5 and other models in a recent study of medical AI tools conducted by Stanford and Harvard. Tangney noted too that usage rates for Doximity’s tools have surged during the current quarter.

The CEO also emphasized that Doximity shows it's possible to generate strong software margins while investing in AI. "We’re leaning in as we see a once-in-a-generation opportunity to build the new AI age of medicine."

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Financial conversations can be difficult and uncomfortable, leading many Americans to neglect them altogether.

Whether it's debt, retirement, investing or estate planning, more than 80% of people intentionally avoid discussing financial topics with family and friends, according to a report from the Consumer Financial Protection Bureau.

While skipping these conversations may seem harmless, the silence isn't neutral. Delaying these discussions often means delaying important financial decisions, too. As time passes, those missed opportunities can compound, sometimes creating more financial stress than if they had been addressed from the beginning.

We all procrastinate from time to time, especially when confronting something that takes us out of our comfort zone. But avoiding it doesn't make it go away.

The same is true when it comes to your finances. Telling yourself you'll make a plan to pay off debt next month or wait until you're making "enough" money to start investing may bring you peace in the moment, but those decisions carry consequences that continue to grow the longer you wait to deal with them.

Interest continues to accumulate on debt, investment opportunities get missed, and conversations can feel more uncomfortable the longer you put them off. That's because financial decisions tend to build on one another.

Delaying one conversation or decision leads to another, making it harder and harder to catch up down the line. What may have started as a small challenge can snowball into a much larger issue over time.

So why are people so afraid to confront these issues head on?

For many of us, financial avoidance isn't a result of lacking motivation, but rather, lacking confidence. If you don't understand the basics of credit, debt management and investing, it's easy to make mistakes in the very beginning.

This can lead to feelings of embarrassment or the fear of making another wrong decision, causing many people to walk away from the subject entirely.

However, avoiding the problem doesn't make it go away. Oftentimes, it makes the problem more prevalent in your life.

The less involved you are in your finances, the less confident you'll feel when making future decisions, creating a cycle that can be hard to break.

Aside from feelings of embarrassment, the CFPB also found 51% of Americans believe financial matters should stay private. And for many, this means managing financial affairs alone.

In my experience, many clients mistakenly equate financial independence with self-reliance. They assume asking for guidance or discussing their situation with someone they trust means they're less capable of managing their money when that's not the case.

Financial independence and financial isolation are two separate things.

Being financially independent doesn't mean you have to figure out everything on your own. It's about taking ownership of your financial future. Seeking advice from trusted family members or financial professionals doesn't mean you have to lose your independence. It can actually build accountability, give you a new perspective or provide you with more information to make a more informed decision.

To begin building that support system, ask yourself:

Who are the trusted people in my life?

Think about family members, friends or mentors who've demonstrated responsible financial habits and can share their perspective on important financial decisions.

Am I working with a financial professional who can provide guidance when things get complex?

Whether it's retirement planning, learning how to invest or developing a plan to pay off debt, working with a qualified professional who can act in your best interest, can give you the tools needed to make the most informed decision with confidence.

Do I communicate the current financial situation with my loved ones on a regular basis?

Scheduling periodic check-ins with your spouse or other trusted family members can help you stay accountable, discuss future goals or identify areas for improvement.

Am I willing to continue learning and ask for help when needed?

Financial literacy isn't learned overnight. Like anything else, it's a skill that takes time and effort to develop. Building and maintaining financial independence is achieved with the help of a trusted team.

Having a trusted support system gives you the opportunity to ask questions, gain confidence and ultimately address concerns before they get worse. Often, those conversations are what help people transition from financial avoidance to financial independence.

Making the choice to avoid your finances can compound just as powerfully as choosing to take action. The only difference is that one builds opportunity, while the other creates obstacles.

Your financial future is shaped by your decisions. Starting the conversation, asking questions and building a reliable support system are choices that will help move you closer to true financial independence.

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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.

Signing up for Medicare isn't as clear-cut a process as some might think. That's because enrollees have a big decision to make — stick with original Medicare (Parts A and B) and pair it with a Part D drug plan, or sign up for an all-in-one Medicare Advantage plan.

As of February 2026, more than 35 million people were enrolled in a Medicare Advantage plan. And enrollment in Medicare Advantage has increased steadily in recent years, with 19% of eligible Medicare beneficiaries signing up in 2007 versus 54% in 2025, reports the Kaiser Family Foundation (KFF).

It's easy to see why so many people find these plans appealing. Not only do many Medicare Advantage plans come with $0 premiums, but most also offer supplemental benefits beyond what original Medicare covers.

Plus, some enrollees like the security of an annual cap on out-of-pocket spending, which Medicare Advantage plans offer. Original Medicare does not, though a supplement (Medigap) can help cap costs to a large degree.

That doesn't mean Medicare Advantage plans are perfect, though. Enrollees who ditch Medicare Advantage often cite reasons such as limited provider networks and strict prior-authorization rules.

Mark Prip, a Medicare supplement insurance agent at Policy Guide, says, "If you've kept up with the headlines over the last year or two, you've seen Medicare Advantage undergo a significant shift. More than a million Medicare beneficiaries have been affected by Medicare Advantage plan terminations, consolidations, and service-area exits due in part to lower federal reimbursement rates."

Prip also explains that to combat these lower reimbursement rates, many insurance companies have been shrinking provider networks and ending contracts with large hospital systems across the country.

Given these and other constraints, there are certain people for whom Medicare Advantage simply may be a poor fit. Here are three signs you may want to stick with original Medicare instead.

1. You don't have great health

There's a common saying that people in good health tend to do well with Medicare Advantage, while those in poor health tend to lose out financially. Scott R. Maibor, Managing Director at Senior Benefits Boston, says there's some truth to that generalization.

"For someone with multiple or severe health issues, a Medicare Advantage plan may prove to be ultimately more expensive than traditional Medicare with a supplement due to the higher copays and maximum out-of-pocket limit," he says.

Just beware of the "Medigap trap." Those supplemental insurance policies that wrap around Original Medicare can be almost impossible to get if you enroll in Medicare Advantage first and try to switch back later. In most cases, you can only sign up for Medigap plans without facing medical underwriting during the first six months after you become eligible for Medicare, though state rules do vary.

Another reason you might prefer original Medicare if you have a chronic illness? Out-of-pocket prescription drug costs under Part D are capped at $2,100 annually (for 2026).

Danielle K. Roberts, co-founder of Boomer Benefits, a national Medicare insurance agency, says Medicare Advantage plan maximum out-of-pocket limits matter more than some people realize.

"If you're managing a serious illness or anticipating frequent medical care, make sure to ask yourself, 'If I had a year with significant medical expenses, could I comfortably afford to reach that maximum?'" she says.

On the other hand, Roberts points out that Medicare Advantage plans aren’t automatically the wrong choice just because someone has health issues.

"They can be an excellent idea for many people, especially those with certain health conditions or life situations who qualify for both Medicare and Medicaid," she says.

Roberts also explains that Medicare Special Needs Plans (SNPs), a type of Medicare Advantage plan, are designed specifically for people with certain health conditions or who are dual-eligible for Medicaid and are "actually one of the strongest examples of how Medicare Advantage can work well."

As of February 2026, more than 8 million people were enrolled in an SNP, accounting for 83% of total Medicare Advantage enrollment growth over the previous year, per KFF.

2. You plan to split your time between different ZIP codes or travel frequently

Because Medicare Advantage plans limit enrollees to specific provider networks, Prip cautions that people who travel a lot may run into issues.

"While most plans will cover you out of state for medical emergencies, seeking care at specialty facilities in another state can become a real issue because of Medicare Advantage provider networks," he explains. "So if you're someone who travels frequently or simply wants the option to seek specialty care anywhere in the country, Medicare Advantage may not be the best fit."

Maibor agrees and says snowbirds or retirees with providers in two locations may find it difficult to use a Medicare Advantage plan.

3. You don't have the patience for constantly changing rules and providers

Another issue with Medicare Advantage plans? The rules aren't set in stone. And that could make managing care cumbersome.

"I think the main reason Medicare Advantage may not be a good fit for someone is if they're not comfortable keeping up with the rulebook that comes with these plans," Prip says.

"Whenever we conduct a needs analysis with a client, we ensure they understand exactly how Medicare Advantage works," Prip continues. "For example, I ask them, 'Are you OK knowing that your current medical providers who are in network today may not be in network in the future? Are you OK with having to switch doctors if your insurance company is no longer contracted with your medical providers?'"

Prip says that if you live in a smaller town and don't travel often, Medicare Advantage may be a more suitable option. However, he says that for those who want freedom, flexibility, and fewer surprises, original Medicare with supplemental insurance may be a better, less confusing choice.

How to choose the right Medicare Advantage plan

Medicare Advantage is wrong for some people but right for others. If you're in the latter camp, it's important to know how to choose the right one. To that end, Roberts says the key is not to get hung up on premium costs.

"The first thing I'd do is verify that your doctors, specialists, hospitals, and preferred pharmacy all participate in the plan's network," she says.

Next, Roberts says, you should make sure every prescription you take is covered by the plan's formulary and see what your copays will actually be. From there, you can compare each plan's out-of-pocket maximum.

Roberts says you should also estimate the cost of a major medical event.

"Understanding what you could owe if you need surgery, chemotherapy, or frequent specialist care is just as important," she says.

Finally, Roberts advises, don't let extra benefits be the driving factor. They can seem tempting, but you may not end up needing or using all of them.

"I always tell people to choose the plan that gives them confidence they'll have access to the care they need at a cost they can comfortably afford," she says.

Read More

• What Medicare Covers When You Travel in the US and Abroad
• How Medicare Advantage Costs Taxpayers — and Retirees
• Problems with Medicare Advantage Plans Keep Mounting
• What Does Medicare Not Cover? Eight Things You Should Know

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 from readers pertaining to whether an activity is a hobby or a Schedule C business engaged in for profit. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Hobby income and expenses

Question: I like to knit hats. Lately, I have started selling some of the hats that I knit at craft shows. I have a full-time job, and my hat knitting is just a fun extracurricular activity that I engage in sporadically. It's not a business. Do I have to report the sales proceeds I get from selling my hats on my Form 1040? And can I deduct my expenses?

Joy Taylor: You will have to report the sales proceeds on your Form 1040. Since you said your hat knitting activity is not a business, but a fun activity that you engage in sporadically, the activity is likely considered a hobby. You would report your hobby revenue as other income on Schedule 1 of the 1040.

Unfortunately, you will not be able to deduct your expenses. The 2017 Tax Cuts and Jobs Act temporarily eliminated, through 2025, all miscellaneous itemized deductions previously subject to the 2%-of-adjusted-gross-income threshold. That includes hobby expenses. Last year's One Big Beautiful Bill permanently ended this tax write-off.

2. Hobby versus business

Question: My spouse and I both work full-time. I also have a dog-breeding activity that I run in my spare time. Can I deduct the losses from my dog-breeding activity on Schedule C of my Form 1040?

Joy Taylor: It depends. You can deduct the loss on Schedule C only if your dog-breeding activity is a business. The activity must be conducted with continuity and regularity in a businesslike manner, and you must have a reasonable, good-faith objective of making a profit from it.

If your activity rises to the level of a business, then yes, you can deduct the losses on Schedule C. If not, then you would report revenues from the activity on Schedule 1 of your Form 1040, and you cannot deduct your expenses.

3. Hobby-versus-business factors

Question: What factors does the IRS look at in determining whether losses reported on Schedule C are from a business or a hobby?

Joy Taylor: The IRS and the courts look at many factors in determining whether the reported Schedule C activity is a hobby or instead rises to the level of a business/for-profit activity.

IRS regulations provide a safe harbor. If your activity generates a profit in three out of five consecutive years, or two out of seven years for horse breeding, the law presumes you're in business to make a profit unless the IRS establishes otherwise.

The hobby-business analysis is trickier if you can't meet the safe harbor. That's because the determination of whether an activity is properly categorized as a hobby or a business is then based on each taxpayer's facts and circumstances, with the IRS and the courts generally looking at the following nine factors:

• Expertise of the taxpayer and advisers
• Manner in which one carries on the activity
• Time and effort devoted to the venture
• Expectation that assets from the activity may appreciate
• History of income and losses (the more years of large consecutive losses, the harder it is to show a profit motive, unless the activity is still in its start-up stage)
• The amount of occasional profits
• Success in carrying out other activities
• Elements of personal pleasure or recreation
• Whether the taxpayer has substantial income from other sources, such as wages or investment income

4. Audit red flag

Question: I keep reading that claiming losses on Schedule C from an activity that sounds like a hobby is an IRS audit red flag. Is this true?

Joy Taylor: Yes. Claiming large hobby losses on Schedule C is a perennial audit red flag. The IRS is on the hunt for taxpayers who year after year report large losses from hobby-sounding activities on Schedule C or F of the 1040 to help offset wages, business or investment earnings, or other income.

The hobby loss rules are often litigated in the Tax Court. When people think of hobby losses, horse, cattle and/or dog breeding generally comes to mind. Of course, the Tax Court has addressed those ventures. But other cases involve activities as varied as ecotourism, rodeo events, acting, writing and researching, flying antique fighter jets, poker playing, collecting law enforcement badges, donkey breeding and restoring old cars. The IRS usually wins these cases, partly because it tends to settle cases in which it doesn't believe it can prevail. But taxpayers have also pulled off a victory in a number of cases.

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.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Estimated Tax Payments and Withholding
• Ask the Editor: Questions on Selling a Home
• Ask the Editor: 10-Year Rule for Inherited IRAs
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Tax Rules for Landlords

Many 1031 investors — especially those who are nearing retirement — don't understand the full breadth of replacement options available to them.

Most of them are in a similar spot: They own a rental or a small commercial building, and they're worn out from the day-to-day management. They're ready to sip piña coladas on the beach, not answer phone calls or text messages about how the plumbing stopped working or what the pet fee will be if their tenant gets a fourth cat.

In 2024, 38% of landlords said property upkeep is one of their biggest issues, and in 2026, a survey of 4,055 independent landlords showed that ownership costs rose for 74.4% of them.

That paints a clear picture of collective landlord psychology: They're sick of maintenance, and to make matters worse, prices keep rising.

Since the 1031 exchange is such a good option for deferring taxes, most landlords are heavily incentivized to keep the money working for them in real estate (and that's especially true for retirees who are investing for cash flow).

So, what are their options? Most investors think there are only two:

• Go passive through a Delaware statutory trust (DST)
• Stay in control by buying another building and doing the work all over again

Completely passive with lower returns or potentially stroke-inducing total control?

In reality, this is a false dichotomy.

The actual range of options is much wider.

Once you sell, you have 45 days to formally identify a replacement property and 180 days to close. That window is short — and the IRS is not lenient at all about missing deadlines, so let's get started.

The full range of options, from most work to least

Another active property. This is the default option. And, frankly, for some sophisticated investors who have the time and patience for it, it's the right answer.

You trade into another rental, a multitenant building or a value-add project, and you keep full control along with full responsibility:

• Tenants
• Repairs
• Vacancies
• Taxes
• Insurance

If the reason for the exchange was the work itself, this puts you back where you started, usually with a larger asset. Not ideal for someone nearing retirement.

Tenancy in common (TIC). A TIC lets several investors hold direct, fractional title to a single property. You keep the standing of a direct owner, which is more control than a fractional trust interest gives you, but decisions generally require coordination among the other owners, and financing is more complicated because the lender underwrites the group.

It sits in the middle, and it has become less common than it once was.

A Delaware statutory trust. With a DST, you buy a fractional beneficial interest in a professionally managed, institutional-grade asset, and a sponsor runs everything.

The appeal is convenience: A DST can close in three to five business days, minimums are low, and you can spread proceeds across several of them for diversification.

Those are meaningful advantages when the 45-day clock is tight or the remaining balance to place is small.

The trade-off, of course, is control.

In order to qualify for a 1031, a DST has to follow a set of IRS rules (often called the seven deadly sins): Among them, the trust:

• Cannot take on new financing
• Cannot sign new leases
• Cannot make major capital improvements
• Cannot reinvest sale proceeds

Investors get no vote on when the property sells, and because proceeds cannot be redeployed inside the trust, the sponsor's exit sets the timing of your next exchange.

Fees are the other consideration, since front-end fees on DST offerings commonly run 10% to 15% and are disclosed inside a lengthy private placement memorandum.

For frustrated, burnt-out landlords, that seems like it's an easy trade … but it's not the only option available to you if you want to move from being fully active to being mostly passive.

The lesser-known middle-ground options

Single tenant NNN (triple net). While this is still technically 100% ownership, it stands out because it shifts the maintenance responsibilities onto the tenant. With a NNN property, you hold title outright and lease the building to a single tenant, usually on a long 10- to 15-plus-year lease, and the tenant pays the three nets:

• Property taxes
• Insurance
• Maintenance

You keep control (the hold, the sale and the timing of your own exchange), and the operating burden shifts to the tenant, so your responsibilities as owner are low.

The pricing behaves a lot like fixed income: Single tenant net lease assets traded around a 6.80% cap rate as of the first quarter of 2026, and the yield tracks the tenant's credit and the remaining lease term more than the building itself.

Absolute NNN. This is a triple net lease taken to its furthest point. The short version: The tenant carries everything, including the roof and structure, which is not always true of all NNN leases.

A REIT. Worth naming mostly to correct a common assumption: You cannot complete a 1031 exchange directly into REIT shares, because a share of a trust is not like-kind to real property.

There is an indirect path called an UPREIT (a DST interest can later be contributed to a REIT operating partnership through a Section 721 exchange), but that is effectively a one-way door out of 1031 treatment, since you generally cannot exchange out again afterward.

There are also plenty of hidden risks associated with this strategy.

Weighing your options: Two questions to answer

In evaluating these options, you need to answer two questions:

• How much control do you want to keep?
• How much of the work are you willing to do yourself?

A DST gives up control almost entirely in exchange for simplicity, which suits an investor who just wants it all to be over with.

A single tenant absolute NNN property keeps title, control and exchange timing in your hands while keeping the work low, which suits an investor who was tired of the job rather than tired of owning. Another active building keeps everything: Control and work alike.

Each is a legitimate answer to a different set of priorities.

Whatever you land on, three habits pay off early: Match the structure to whichever of those priorities is most important to you, read the underlying documents (the lease on a net lease deal, the private placement memorandum on a trust) and make sure to cross your t's and dot your i's. The 45-day clock rewards the investors who have thought it through before they sell.

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• Should I Sell or Rent My House When I Relocate for Retirement?
• Do 1031 Exchanges Make Sense for Baby Boomers?

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.

At the broadest possible level, every investor shares the same objective: earning a return. Where investors differ, however, is in how much risk they're willing to take to earn that return, how long they remain invested before needing their money and how large a return they need to reach a financial goal.

These differences closely mirror the three variables that financial advisers routinely discuss with their clients: investment objective, risk tolerance and time horizon.

The interesting part is that these concepts are closely interconnected. A young investor early in their career, for example, typically has a long investment horizon before retirement. In theory, that longer time horizon allows them to tolerate greater short-term volatility because they have more years to recover from market downturns and benefit from long-term compounding.

Of course, investing is not purely mathematical. Individual psychology and behavioral finance play important roles. Two investors of the same age with identical personal finance situations may have very different comfort levels with market volatility, leading them to build very different portfolios.

That is precisely why clearly defining your investment goals is so important. This ultimately determines which assets are appropriate for your portfolio and which are not.

The need to make those distinctions has never been greater. The U.S. exchange-traded fund (ETF) industry has grown to more than 5,500 funds, spanning everything from broad market index funds to highly specialized leveraged, inverse, thematic and options-based strategies. While this variety gives investors more choice than ever before, it also makes selecting the best ETFs increasingly challenging.

In this guide, we'll examine five common financial goals U.S. investors pursue. For each one, we'll discuss the characteristics that investors may want to prioritize when evaluating ETFs and highlight one standout fund that fits that particular objective.

Investing for Retirement

For most Americans, retirement planning today rests on two primary pillars: employer-sponsored retirement plans, such as a 401(k), and Social Security. Traditional defined-benefit pensions have become increasingly uncommon in the private sector, leaving workers with greater responsibility for building their own retirement savings.

Many investors supplement their workplace retirement plans and Social Security by opening self-directed accounts such as a taxable brokerage account or a Roth IRA. Within these accounts, ETFs have become one of the most popular investment vehicles.

For retirement investing, the objective should generally be long-term compounding while avoiding uncompensated risk. Concentrating too heavily in a single company, sector, country or asset class introduces risks that have historically not been associated with higher expected returns.

One standout here is the iShares Core 80/20 Aggressive Allocation ETF (AOA). The fund charges a net expense ratio of just 0.15%. It maintains an approximately 80% allocation to global equities and 20% to bonds using a diversified portfolio of underlying iShares ETFs in a fund-of-funds structure.

For investors with different risk tolerances, iShares also offers more balanced and conservative allocation ETFs, including portfolios built around 60/40 and 40/60 stock-bond mixes. Each fund is automatically rebalanced, removing the need for investors to maintain their target allocation themselves.

Learn more about AOA at the iShares provider site.

Investing for Your Kids

Few investors have a longer time horizon than parents saving for their children's future. With decades available for compounding, younger investors can afford to allocate a larger portion of their portfolio to stocks, accepting greater volatility in exchange for the potential for higher long-term returns.

One new savings vehicle is the Trump Account, which launched in July. For children born between January 1, 2025, and December 31, 2028, the federal government contributes an initial $1,000 into an investment account established in the child's name, with a parent or guardian serving as custodian. Families can simply let that initial investment compound over time or make additional contributions of up to $5,000 per year.

One notable feature of these accounts is that the investment menu is built around low-cost U.S. equity ETFs. While stock market investments can experience significant short-term volatility, broad U.S. stock indexes have historically delivered strong long-term capital appreciation over multi-decade periods, making them well suited for investors with very long investment horizons.

Parents have several investment options available, but the standout choice is also the program's default investment: the State Street SPDR Portfolio S&P 500 ETF (SPYM). The fund charges a 0.02% expense ratio, making it one of the lowest-cost ways to gain exposure to the largest publicly traded U.S. companies. To put that into perspective, a $10,000 investment incurs only $2 per year in fee drag.

Although past performance never guarantees future results, SPYM has produced an annualized total return of approximately 15.5% before taxes over the past decade. According to the latest S&P Indices Versus Active (SPIVA) Scorecard, 85.6% of actively managed U.S. large-cap funds underperformed the S&P 500 over the trailing 10-year period.

Learn more about SPYM at the State Street provider site.

Investing for an Emergency Fund

Previous generations may have kept a rainy day fund in a jar on top of the refrigerator, gradually filling it with spare change. Today, many savvy investors maintain an emergency fund as a reserve readily available to cover an unexpected financial need.

A major car repair, an emergency visit to the veterinarian, an unexpected roof leak, a temporary job loss, travel for a family emergency and funeral expenses are all situations where having cash immediately available can prevent a financial setback from becoming a much larger problem.

When building an emergency fund, investors should prioritize two characteristics above all else before selecting assets: safety of principal and liquidity.

Safety of principal means your money should remain intact regardless of what financial markets are doing. Whether stocks are soaring or experiencing a sharp correction, the amount of cash in your emergency fund should still be there when you need it.

Liquidity is equally important. Emergency savings should be accessible without lengthy lockups, surrender charges or significant withdrawal penalties. After all, money that cannot be accessed quickly is of limited use during an actual emergency.

One ETF designed around these principles is the iShares 0-3 Month Treasury Bond ETF (SGOV). The fund invests exclusively in U.S. Treasury bills with remaining maturities of zero to three months, continuously replacing maturing securities with newly issued Treasury bills. The interest earned is distributed to shareholders each month, and the bond ETF currently yields 3.6%.

Unlike a certificate of deposit (CD) or a high-yield savings account, SGOV is not insured by the Federal Deposit Insurance Corporation (FDIC). However, its holdings are obligations of the U.S. Treasury and mature in only a matter of months, giving the portfolio high credit quality while minimizing interest rate risk.

Short of a U.S. government default, the fund has historically maintained a very stable net asset value. Even if short-term interest rates rise, SGOV's price is unlikely to experience the sharp declines associated with longer-duration bond funds. Instead, the income generated by the portfolio generally adjusts upward as maturing Treasury bills are replaced with newer securities offering higher yields.

SGOV is also highly liquid. Shares trade throughout the day on an exchange just like a stock, and the ETF currently has a 30-day median bid-ask spread of 0.01%. This helps keep transaction costs to a minimum.

Learn more about SGOV at the iShares provider site.

Investing for Passive Income

Passive income is one of the most common reasons investors turn to ETFs. Many income-oriented funds distribute cash monthly, allowing investors to generate a relatively predictable stream of cash flow without having to select and manage individual dividend-paying stocks themselves.

Many income ETFs are also reasonably tax efficient. This is because some option-income strategies use accounting treatments that allow a significant portion of their distributions to be classified as return of capital. Rather than being immediately taxable, return-of-capital distributions reduce an investor's adjusted cost basis, effectively deferring capital gains taxes until the investment is eventually sold.

There are, however, several trade-offs investors should understand. Many high-income ETFs generate their elevated yields by writing covered calls or employing other options strategies. These approaches typically result in higher expense ratios than traditional index funds and add another layer of complexity. They can also limit capital appreciation because covered calls cap a portion of the portfolio's upside during strong bull markets, meaning these funds may underperform when markets rally sharply.

For most income-focused investors, the goal should be generating a distribution stream capable of supporting planned withdrawals without taking unnecessary risk. Retirees, for example, often reference the 4% rule, which suggests withdrawing approximately 4% of a portfolio during the first year of retirement and adjusting that amount for inflation thereafter.

One ETF that currently exceeds that threshold is the Amplify CWP Enhanced Dividend Income ETF (DIVO). The fund currently offers a distribution rate of approximately 4.8%, calculated by annualizing its most recent monthly distribution and dividing that figure by the ETF's net asset value. According to DIVO's July 19a-1 notice, 90% of its latest monthly distribution was estimated to be return of capital.

DIVO owns a relatively concentrated portfolio of roughly 25 to 30 companies selected for characteristics such as consistent earnings growth, dividend growth, strong free cash flow generation and high returns on equity. The portfolio managers then selectively write covered calls on individual holdings. The ETF pays distributions monthly and charges a 0.56% expense ratio.

Learn more about DIVO at the Amplify ETFs provider site.

Investing to Lower Taxes

Once you've fully utilized tax-advantaged accounts such as a 401(k) and a Roth IRA, any additional investments typically need to be made through a taxable brokerage account. While these accounts offer complete flexibility and no contribution limits, they also expose investors to taxes on investment income.

Depending on the investment, taxable income can come from several sources. These include dividends, short- and long-term realized capital gains and ordinary income generated by assets such as taxable bonds and real estate investment trusts (REITs). For investors in higher federal and state tax brackets, these taxes can meaningfully reduce long-term returns.

Fortunately, certain ETFs hold investments whose income may be exempt from federal income taxes. The most common example is municipal bonds. Municipal bonds are debt securities issued by state and local governments and their agencies to finance public infrastructure projects.

These can generally be divided into two categories. General obligation bonds are backed by the issuer's taxing authority and general revenues, while revenue bonds are supported by income generated from specific projects, such as toll roads, airports, hospitals, water systems or public utilities. In both cases, investors are effectively lending money to the issuing authority in exchange for periodic interest payments and the return of principal at maturity.

Municipal bonds are generally considered a high-credit-quality asset class, although some issuers carry below-investment-grade credit ratings because of financial challenges. For most investors, though, the interest earned from municipal bonds is exempt from federal income tax and, in many cases, is also exempt from the alternative minimum tax (AMT).

A popular municipal bond fund is the iShares National Muni Bond ETF (MUB). The ETF charges a low 0.05% expense ratio and holds more than 6,800 municipal bonds. Its largest state exposures include New York, California, Texas, Illinois, Massachusetts, New Jersey and Florida. The portfolio is also conservatively positioned from a credit standpoint, with approximately 60% of holdings carrying AA credit ratings, with most of the remainder distributed among AAA and A -rated securities.

At first glance, MUB's 30-day SEC yield of 3.5% may not appear especially compelling. However, iShares notes that investors should instead consider the fund's tax-equivalent SEC yield of 5.8%. This is an estimate of the taxable yield a conventional bond investment would need to generate to produce the same after-tax income as MUB for investors in the highest federal income tax brackets.

Investors should also know that municipal bond ETFs are also available in state-specific versions. For residents who purchase a fund investing exclusively in bonds issued by their home state, the interest income may also be exempt from state income taxes. This is valuable in high-tax states such as California and New York, where iShares offers dedicated state-specific municipal bond funds.

Learn more about MUB at the iShares provider site.

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Minority-owned businesses are one of the fastest-growing segments of the U.S. economy.

The U.S. Census Bureau puts the number at an estimated 1.3 million.

And according to the 2024 Minority Businesses Economic Impact Report, they generate nearly $600 billion in annual economic output while posting year-over-year gains in production, employment and wages.

Yet for many founders, the greatest challenge comes after building the business, when it's time to sell. As research from Brookings Metro highlights, minority-owned businesses face unequal access to capital.

When that's coupled with unequal access to experienced advisers and sophisticated legal and financial resources, it means many otherwise successful businesses reach the sale process without the documentation, governance or operational infrastructure buyers expect.

The result can be lower valuations, prolonged negotiations or deals that never make it to the closing table.

With thoughtful planning and preparation, however, founders can address many of the common obstacles before a buyer even begins due diligence, positioning themselves to protect the value they've spent years creating.

Assess your business

A U.S. Department of Commerce study found that minority-owned firms are more likely to be denied loans, pay higher interest rates when they do secure financing and are less likely to apply for credit because they expect to be turned away.

Minority-owned companies typically have fewer banking relationships and collateral options than their non-minority counterparts.

These barriers do not disappear at the point of sale. They can affect how a business is valued, how a deal is structured and who shows up at the negotiating table.

For any business owner, preparing for a sale may be the first time they have navigated a transaction of such a size and complexity. Compounding the overwhelm for many minority founders is the fact that not all business owners have equal access to the legal, financial and advisory networks that help companies prepare for an eventual exit.

As a result, some business owners enter the sale process without fully appreciating the level of scrutiny buyers will apply to their records, contracts, compliance practices and financial reporting.

One of the most important things a business owner can do before pursuing a sale is conduct a thorough internal audit. While many owners focus on financial performance, buyers go beyond revenue and profitability. They want reassurance that the business is well organized, compliant and free of surprises that could delay or derail a transaction.

Where to start

Start with your corporate records. Formation documents, operating agreements, bylaws, shareholder agreements, capitalization tables and board records should be complete, accurate and readily accessible.

Buyers will also examine customer and vendor contracts, loan agreements, liens and property leases.

Next, review legal and regulatory risks. Pending litigation, environmental matters, product liability claims, recalls and other compliance issues should be identified early.

Financial statements and tax returns for at least the previous four years should be organized, prepared in accordance with generally accepted accounting principles where possible, and reviewed or audited by a reputable CPA.

Intellectual property is another critical area. Trade secrets, trademarks, patents, copyrights and related registrations should be documented, along with confidentiality agreements for employees, contractors and third parties.

Businesses should also confirm compliance with applicable data privacy laws.

On the employment side, verify worker classifications, ensure I-9 documentation is complete, identify any pending employment claims and review employee benefit plans for legal compliance.

Finally, organize information on your key customer and vendor relationships, including revenue concentrations over the past 12 months. Any transactions involving affiliated entities or related parties should also be clearly documented.

The goal is to identify and resolve issues before a buyer discovers them. The more organized and transparent your business appears during due diligence, the more likely the transaction is to proceed efficiently and on favorable terms.

Close the gaps before a buyer finds them

Once you've completed your internal audit, expect to find gaps. Nearly every business does. The difference between a smooth transaction and a difficult one often comes down to whether those issues are addressed before the company goes to market.

Buyers are trained to identify risk. When they uncover missing documentation, unresolved compliance issues or operational weaknesses during diligence, those findings frequently become negotiating leverage.

What might seem like an administrative oversight can quickly translate into a lower purchase price, additional indemnification obligations or delays in closing.

Corporate records should be brought up to date, whether that means preparing written shareholder and/or director consents to ratify corporate actions or correcting deficiencies in stock issuances.

Outstanding liens that should have been released should be formally terminated, and any informal arrangements between related parties should be documented through written agreements.

Financial records deserve the same attention. Incomplete or inaccurate financial statements should be reviewed and corrected with the assistance of a qualified CPA. Intellectual property should be evaluated to determine whether trademarks, patents, copyrights or trade secrets require additional protection.

Businesses that rely on proprietary information should ensure employees and contractors have executed appropriate confidentiality and invention assignment agreements.

Ultimately, buyers use diligence to assess both risk and value. Companies that present organized records, documented processes and resolved compliance issues signal that the business is well managed and ready for transition.

That preparation can help support valuation, accelerate the transaction process and reduce the likelihood of post-closing disputes or liability.

Start building your team 12 to 24 months out

Minority-owned businesses face challenges that stem from systemic discrimination. That is one of the reasons why it is essential to assemble your team of trusted professional advisers 12 to 24 months before you plan to go to market.

Your attorneys, accountants, financial advisers and investment bankers will work together to help you address gaps, position the business and its owners favorably and work through some of these structural obstacles.

Beyond your professional team, lean into community networks. Minority business organizations, industry events and peer groups can provide introductions to potential buyers, capital sources and strategic partners that may not be visible through traditional channels.

Consider seeking investors focused on diversity or exploring alternative funding sources, such as SBA programs and crowdfunding platforms.

A stronger top line and a more diversified customer base make a business more attractive to buyers. If you have not already, consider applying for minority business certification, which can qualify your company for certain government and corporate contracts and add another proof point for prospective acquirers.

Preparation is what separates a closed deal from a missed opportunity

The minority business community is building something remarkable. The growth numbers are real, the economic impact is significant and the entrepreneurial ambition behind these companies is clear.

However, too many founders leave value on the table because they did not prepare for the exit with the same rigor they brought to building the business.

Clean documentation, clear organizational structure, resolved compliance issues and a strong advisory team are what separate a deal that closes at full value from one that falls apart in due diligence.

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• For Business Owners, Estate and Exit Planning Join Forces

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.

Three decades ago, buying a stock required a phone call to a broker, a sizeable fee and the confidence to act on limited information.

Today, a client can analyze their portfolio, stress-test retirement plans and execute trades before finishing their morning coffee. I've seen this transformation unfold remarkably quickly over the course of my career in this industry, and it is still accelerating.

But as technology has made financial planning faster, cheaper and more transparent, it has also introduced a new category of risk — the illusion of certainty. More data and authoritative-looking outputs do not always produce better decisions. And in retirement planning, the gap between what technology can model and what it cannot understand is consequential.

From gatekeeping to empowerment

The shift in financial access over the past generation has been profound. High fees and limited platforms once kept most investors dependent on intermediaries for even basic transactions. The emergence of online brokerage accounts, zero-commission trading and real-time data fundamentally changed that dynamic — and the nature of the adviser-client relationship itself.

Clients come to meetings better informed, ask sharper questions and hold advisers to a higher standard of transparency. That accountability is healthy. It pushes advisers to be more rigorous and to communicate with greater clarity.

Technology has freed advisers from operational tasks that once consumed a disproportionate share of the day. Investment selection, trade execution and portfolio rebalancing were painstaking manual processes at one time.

Today, they are largely automated. That shift allows advisers to direct their attention toward the work that matters most: Understanding a client's values, goals and concerns in ways that no algorithm can replicate.

The promise — and limits — of artificial intelligence

Artificial intelligence (AI) has become the most discussed tool in financial planning — and with good reason. AI-powered platforms can process vast datasets, generate retirement projections and identify tax-planning opportunities in a fraction of the time it would take a human adviser working manually.

But while I'd recommend using AI tools to prepare for advisory meetings, they can't replace them. When clients arrive having already worked through an initial plan, the conversation moves past the basics to focus on the decisions that are genuinely complex.

• How do we plan for a child with special needs?
• What does retirement look like for someone who intends to keep working part-time?
• How do we balance competing obligations to aging parents and a college-bound teenager?

These are not questions AI can answer without truly knowing the client, and they are often the most significant.

There is also a subtler risk that plays out more than once in any advisory practice. Clients often assume that because a plan was generated by a sophisticated platform, it is fully personalized to their situation.

In reality, AI outputs are only as good as the inputs they receive. A projection built on incomplete or inaccurate information can create overconfidence — a false sense of retirement readiness that goes unexamined because the output looks authoritative. The plan may be technically sound but emotionally incomplete.

It's important to view AI not as a threat but as infrastructure — a foundation that makes advisory work faster and more precise, while leaving the interpretive and relational dimensions of planning firmly in human hands. The financial advisers who thrive in this environment are not those who resist technology, but those who integrate it thoughtfully.

Beyond the headline technology

AI has been behind some of the most consequential improvements in financial planning. Tax planning is a good example. AI-assisted platforms can now model complex strategies around Roth conversion timing, charitable giving and capital gains harvesting — work that previously required hours of manual effort.

Advisers still review and refine these outputs, but the platform does most of the analytical heavy lifting, enabling more sophisticated planning to reach a broader range of clients.

Automation has simplified everyday financial management for clients as well. AI-powered note-taking tools now capture meeting conversations accurately and feed them into client management systems.

Context from one meeting is preserved and accessible in the next, which is incredibly valuable for maintaining continuity in long-term advisory relationships.

Where human judgment remains irreplaceable

Perhaps the clearest illustration of technology's limits can be seen at the transition from accumulation to distribution — the shift from building wealth to drawing it down. This phase involves products and strategies, including certain annuities, long-term care solutions and income-layering approaches that are typically available only through licensed advisers.

A client relying entirely on self-directed digital tools may not know these options exist, let alone understand how to evaluate them. Bridging that gap is what advisers are for.

Then there is behavioral finance. Markets decline. Plans require revision. Life circumstances change in ways no projection anticipated. In these moments, an adviser's role is not primarily analytical — it is steadying.

The conversations that matter during a market downturn, job loss or unexpected health crisis have nothing to do with spreadsheets.

Helping someone hold a long-term perspective when emotion is pulling in another direction is a distinctly human skill, and one with real financial consequences.

Avoiding costly mistakes in times of volatility can impact retirement outcomes as much as years of disciplined saving.

As automation handles more of the technical work, advisers get to focus on the aspects of planning that are most personal, complex and consequential. That is not a smaller role — it is a more meaningful one.

A more useful question

The right question about technology in retirement planning is not whether to use it. The better question is how to use it well and where to recognize its limits.

The clients who navigate this environment most effectively treat digital tools as a starting point, not a final answer. They use AI platforms to build initial frameworks, then bring them to an adviser who can pressure-test the assumptions, account for the intangibles and translate a spreadsheet into a plan that reflects how they want to live. Technology makes that conversation more efficient. It does not eliminate the need for it.

In a world where financial data is more accessible than ever, the scarcest resource in retirement planning is no longer information. It is the discernment to use it wisely —and that is still a very human strength.

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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.

Markets were mostly lower on Thursday as oil prices and interest rates rose amid uncertainty about the U.S. position on a deal between Oman and Iran to reopen the Strait of Hormuz. While we're still seeing strong data from the earnings calendar, price action today reflected both high expectations, as well as concern for the future.

The front-month West Texas Intermediate crude oil futures contract was up 3.6% to $77.93 per barrel. The Islamic Republic's semi-official Fars news agency reported that Iran wants to ban American and Israeli ships from the Strait of Hormuz. Fars also said Iran is seeking compensation from the U.S. and Israel before they're permitted to transit the passage from the Persian Gulf to global markets.

The 2-year Treasury yield climbed to 4.243% today from 4.179% on Wednesday; the 10-year was up to 4.664% from 4.617% and the 30-year rose to 5.205% vs 5.173%.

Markets will get some big-picture perspective from the economic calendar when the Bureau of Labor Statistics releases the July jobs report before the opening bell on Friday.

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.

At the closing bell on Thursday, the broad-based S&P 500 was down 0.2% at 7,710, the blue-chip Dow Jones Industrial Average had declined 0.9% to 53,885, and the tech-heavy Nasdaq Composite was lower by 0.06% at 26,348.

Sandisk's guidance is soft

Sandisk (SNDK, -6.8%), which has been one of the best-performing S&P 500 stocks since joining the index in November, recovered from its intraday lows. But the flash storage specialist still suffered another steep loss because it fell short of great expectations.

Management reported exponential year-over-year growth at the top and bottom lines for its fiscal fourth quarter, and the tech stock topped Wall Street's forecast for revenue and earnings per share.

But Sandisk guided to fiscal 2027 first-quarter revenue of $10.3 billion to $10.8 billion, and analysts wanted to see $10.82 billion. Margin guidance of 83% to 85% was also disappointing relative to a fourth-quarter figure of 84.6%.

Still, the bigger picture for earnings is bright, as Louis Navellier of Navellier & Associates notes, with 71% of companies in the S&P 500 reporting so far this season.

"Revenues are running 3.8% higher than analyst consensus estimates, while earnings are coming in at 7.3% higher than analyst consensus estimates," Navellier says. Seventy-seven percent have reported revenue surprises, and 83% have reported earnings surprises.

"Interestingly," Navellier concludes, "this is also the twelfth quarter in a row where earnings are exceeding sales growth, which is indicative of profit margin expansion."

Why DAVE was so down today

Dave (DAVE, -15.1%) is a digital banking platform, and as recently as January it looked more like a small-cap stock than a mid-cap stock.

A year-to-date gain of more than 94% through Wednesday pushed it well into the higher market cap neighborhood. The reaction to Dave's second-quarter earnings report is bringing it back down.

Dave, which describes itself as "one of the nation's leading neobanks," reported earnings of $4.12 per share, year-over-year growth of 48.2%. And revenue was up 29.7% to $170.8 million.

It's those year-over-year growth figures: They're slowing down. A year ago, Dave reported EPS growth of 263%. Then it was 196%, 93% and 64%.

The trajectory for revenue growth is a little like Hemingway's line from "The Sun Also Rises." It went from 64% a year ago to 63% to 62% to 47% when management reported first-quarter results.

Thirty percent annual revenue growth doesn't exactly suggest "bankruptcy." But there is a "gradually, then suddenly" feel to its failure to keep up with the law of big numbers.

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My wife and I are expecting our third child later this year. When a client is expecting, I generally advise them to start thinking about their baby's financial future right away.

Trump Accounts allow parents to open an investment account on behalf of any children under age 18 who are U.S. citizens. If the child is born from 2025 through 2028, the government will deposit $1,000 into the account for your child.

Thanks to philanthropic donations, an extra $250 will be deposited into the account if you live in a ZIP code with a median income below $150,000.

If your child qualifies for that deposit, opening a Trump Account is a no-brainer; it's free money!

Where things get less clear is when considering whether you should contribute your own money to the accounts. As a financial adviser at Burns Estate Planning & Wealth Advisors and an expectant father considering the best path forward for my own child, I see both pros and cons.

What are the benefits of contributing to a Trump Account?

Contributing to a Trump Account can significantly increase your child's nest egg. The federal government estimates that if you simply take the $1,000 deposit from the government, that deposit will turn into $6,000 by the time your child is 18.

By contributing just $250 per year, your child would have an estimated $19,000. Clearly, contributing to the Trump Account — even a small amount — will have a significant impact on the amount of money your child ends up with.

While the Trump Account is touted as a retirement account for your kid, your child can also make withdrawals without penalty much earlier for qualifying reasons, such as paying for college or buying their first home.

Those withdrawals could be subject to restrictions and would be taxed at ordinary income tax rates.

Employers can make contributions up to $2,500 per year into the account as well, making it a potentially attractive employee benefit.

What are the downsides of contributing to a Trump Account?

If you're considering making contributions to a Trump Account for education for your child, you should first ask yourself: Why would you use a Trump Account for education when a 529 plan grows tax-free and is tax-free on withdrawal?

The nest egg your child has after 18 years of contributions to a Trump Account could be significant. However, that's not due to any special property of the Trump Account itself; it's simply the result of compound interest over time, which you would also enjoy with other investment accounts like a 529.

Unlike with a 529, your children will have to pay taxes on the growth of money in a Trump Account when they withdraw it. I often recommend that my clients convert their IRA to a Roth IRA because, while you pay taxes on the contributions or conversions to a Roth, you don't pay taxes when you withdraw the money.

Trump Account contributions are non-tax-deductible, like a Roth IRA, but the entire amount is taxable upon distribution, like a traditional IRA. That double taxation is not as tax-efficient as other options.

When my baby is born later this year, I'll definitely open a Trump Account to take advantage of the $1,000 free deposit, but I'll also open a 529 account and contribute my own money to that, because withdrawals will be more tax-advantaged for my child.

That isn't to say this is the right move for everyone with a newborn. A Trump Account is a tool, but, as with any other investment, it's not a one-size-fits-all solution.

If the goal is to save for higher education, it may make more sense to use a 529 plan, based on the tax laws that apply to distributions compared to a Trump Account.

It will likely be less common to use a Trump Account to save for your children's retirement, as most children are beneficiaries of their parents' estate to begin with.

However, if getting a jump-start on your children's retirement accounts is the goal, a Trump Account would likely make more sense.

It's important to work with your financial adviser for advice that takes into account your unique circumstances before deciding how to set your children up for a strong financial future.

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

As more people in the U.S. remain in their homes as they grow older ("age in place"), the cost of making a home safer and more accessible can be a significant hurdle.

A new proposal in Congress would ease that burden by creating a federal tax credit for older homeowners who invest in accessibility upgrades.

The Senior Accessible Housing Tax Credit Act of 2026 would provide a credit of up to $10,000 for taxpayers age 60 and older who make qualifying improvements to help them remain safely and independently in their homes.

The legislation addresses a gap for older adults because Medicare generally doesn't cover structural home modifications, like installing wheelchair ramps, widening doorways, or remodeling bathrooms for accessibility. As a result, many homeowners must pay those often substantial costs out of pocket.

Here's more to know.

New $10,000 home tax credit for older adults?

The Senior Accessible Housing Tax Credit Act of 2026, recently introduced by Sens. Angela Alsobrooks (D-Md.) and Kirsten Gillibrand (D-N.Y.), would create a federal tax credit of up to $10,000 for taxpayers age 60 and older who make qualifying accessibility improvements to their homes.

"This critical legislation allows for seniors to stay in their homes — for many that means homes they love and have been in for decades —and install essential, aging-related modifications," Sen. Alsobrooks stated in a release announcing the proposal.

Sen. Gillibrand, top Democrat on the U.S. Senate Committee on Aging, added that "a safe, accessible place for seniors to live should be a right, not a privilege."

The measure, which has received support from the National Association of Realtors, also has companion legislation in the House, introduced by Democratic Rep. George Latimer of New York. According to the bill's sponsors:

• If enacted, the bill would create a nonrefundable tax credit for eligible taxpayers age 60 or older for expenses related to certain home modifications on their principal residence or a qualifying second home
• The credit would be equal to the cost of eligible expenditures, with an annual limit of $10,000
• Qualifying expenditures would also include certain labor costs related to the preparation, assembly, or installation of an eligible modification

What kind of projects are lawmakers talking about? Installing wheelchair ramps, grab bars, non-slip flooring, bathtub cuts or shower seats, furniture risers or chair lifts, or widening doorways would generally qualify under the proposal.

Replacement of toilets and bathroom vanities and kitchen or bathroom faucets are also mentioned in the bill. However, a general remodeling project, like a kitchen renovation designed primarily for appearance, likely wouldn't qualify.

Aging in place home modifications

The proposal comes as more older adults in the United States look for ways to remain in their homes. According to AARP's 2024 Home and Community Preferences Survey, 75% of adults age 50 and older want to remain in their current homes as they age.

But so-called "aging in place" often requires more than simply remaining in a longtime home. As some people get older, features like stairs, narrow doorways, high thresholds, and traditional bathrooms can make everyday tasks more difficult or increase the risk of falls.

As a result, some homeowners may need to install grab bars or step-free entrances, widen doorways or make other accessibility upgrades to continue living safely and independently.

Those improvements can vary widely in cost. According to data compiled by NerdWallet on aging-in-place home renovations:

• Installing grab bars can cost about $100 to $400
• Widening doorways can cost roughly $600 to $2,000 per doorway
• A stair lift can cost about $7,000 on average

For homeowners who need multiple changes, the expense can be significant.

As mentioned, another challenge is that Medicare generally doesn't pay for these types of home modifications.

Medicare Part B may cover certain medically necessary durable medical equipment (DME) prescribed by a doctor for use in your home (e.g., walkers, wheelchairs, hospital beds), provided deductible and supplier rules are met. But Medicare doesn't cover structural modifications to a home or, for example, bathroom "convenience" items like grab bars or raised toilet seats.

That leaves many paying these expenses out of pocket or looking for other sources of assistance.

Home accessibility tax deductions under current law

Keep in mind that the proposed $10,000 tax credit isn't currently available. Congress would need to pass the legislation and have it signed into law by President Trump before eligible taxpayers could claim it. It's unclear if there's sufficient bipartisan support for the measure to gain traction.

But…all is not lost. As Kiplinger has reported, under current IRS rules, certain home modifications may qualify as deductible medical expenses.

Under existing law, a taxpayer generally must itemize deductions to claim medical expenses, and only eligible medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted.

Reimbursed medical expenses are not deductible, and the modification(s) must be made primarily to provide medical care for the taxpayer, a spouse, or a qualifying dependent.

Additionally:

• The improvement generally must be tied to a specific medical need. A homeowner who installs a ramp because of a diagnosed medical condition may be able to deduct some of the cost, but someone who adds accessibility features simply as a precaution generally would not receive a tax benefit.
• If a home improvement increases the value of the property, only the portion of the cost that exceeds the increase in the home's value generally qualifies as a medical expense deduction.

For example, if an accessibility improvement costs $20,000 but increases the home's value by $8,000, generally only the remaining $12,000 may qualify as a medical expense deduction, assuming the other IRS requirements are met.

For more information and specific rules, see IRS Publication 502. Consider speaking with a trusted tax professional if you're unsure whether a specific upgrade might be deductible on your return, as this information is provided for educational purposes.

If you're concerned about the costs of making a home upgrade, you may also want to check for programs or organizations in your state or community that may provide assistance for eligible aging-in-place improvements.

What to Read Next

• Tax-Deductible Home Improvement in Retirement
• New Bill Proposes $1 Million Capital Gains Home Exclusion
• 5 Little-Known Senior Tax Deductions
• Property Tax Changes Homeowners Over Age 65 Should Watch in 2026

You found your dream home, the seller accepted your offer, and you're eager to close on the sale. But as you finalize the paperwork, make sure you don't overlook a policy that could prove invaluable down the road: owner’s title insurance. Without it, you could lose your home and the money you've put into it if someone else one day lays an ownership claim to the title — your legal right to own the property.

Many home buyers assume that the title insurance their mortgage lender requires them to pay for at closing protects their interests. However, that policy applies only to the lender's investment. It does nothing to shield your finances if a title dispute arises.

Although purchasing an owner's title insurance policy is optional for home buyers, doing so is worthwhile because it can safeguard your investment, including any financial losses or legal fees, says Sarah Frano, vice president of corporate underwriting with First American Title. "I would not buy a property without title insurance," she says. "I’ve seen the variety of things that can pop up after closing — sometimes years or decades after someone purchases their home."

How it works.

Lenders order a title search once a home is under contract to ensure there are no outstanding ownership claims so that title can pass from one owner to the next. But title examiners don't catch everything, said Karina Borgia-Lacroix, owner of American Real Title in Ft. Myers, Fla.

If they miss an undisclosed heir with a valid claim to the home, for example, that heir could take you to court to challenge ownership. Or if there's a lien on the property for, say, work that a contractor completed but went unpaid by the previous owner, then the home could be forced into a foreclosure if the contractor files a lawsuit. If you don’t have an owner's policy when these types of problems arise, you’ll either have to pay the outstanding liens or defend yourself against title claims in court.

Other scenarios that can result in a dispute, says Frano, include forgery and fraud (such as fake signatures, impersonation or fraudulent sellers); recording errors in county records; misspelled names on recorded documents; and unknown easements that limit how property can be used.

How much does owner's title insurance cost?

While you can purchase owner's title insurance at any time, it’s best to do it during the closing process so you can protect yourself against title claims during the entirety of your ownership.

Plus, purchasing it after closing can be more complex and expensive. If you inherit a property, review the existing title policy to see whether the insurance covers you as an heir, says Frano. If it doesn’t, you’ll need to buy a new policy.

Title insurance premiums are regulated by each state. Expect to pay roughly 0.5% to 1% of the home’s purchase price for an owner's policy. You'll pay much less for the lender's policy, which is based on the loan amount and typically adds just a few hundred dollars to your closing costs.

Buyers usually cover the cost of the lender's title policy. With the owner's policy, whether the buyer or seller pays — or the cost is split down the middle — depends on local customs and laws, Frano says.

Title agents often provide discounts when you combine the purchase of an owner's and a lender's policy, says Borgia-Lacroix. You can shop around among title insurance companies to compare costs and coverage levels.

Buying a home involves more than saving for a down payment. A financial professional can help you build a plan for closing costs, ongoing homeownership expenses and protecting your investment over the long term.

Use the Bankrate tool below to connect with a financial professional and get started today:

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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Between the wildfires in Canada and those raging in Washington, it seems like wildfires are getting more common and widespread. If the news has you worried, there are two things to know.

First, your home may be at a higher risk of fire than you think – especially if you've never given much thought to fireproofing before. Secondly, most of the best practices for making your home more resilient to fire are simple, DIY-friendly projects you can knock out in a weekend.

While those in especially fire-prone zones might also need to look at bigger home upgrades like installing fire-rated siding and roof materials, every homeowner can immediately improve their home's fire safety by starting with these eight steps.

1. Review your insurance coverage now

Most standard home insurance policies will cover damage caused by fire, including smoke damage. However, some insurers might exclude coverage in high-risk zones, while others may have exclusions based on the cause or source of the fire, and others may exclude certain types of damage.

If any such exclusions exist in your policy, you want to know that before a fire breaks out so you can line up supplemental coverage or switch to a provider with more comprehensive fire coverage.

If you do find out your policy doesn't cover as much as you thought, you can use our tool below, powered by Bankrate, to compare quotes on home insurance that does provide all the coverage you need.

As for your car, fire damage would only be covered if you have comprehensive insurance included in your policy. This type of car insurance covers any damage that happens to your car while you're not driving it – fire, hail, falling trees and so on.

If you don't currently have comprehensive coverage, now might be a good time to shop around for quotes on policies that include it. You may be able to get a better rate on a better policy by switching car insurance.

2. Install mesh screens in vents and other openings

Wire mesh screens with holes no larger than 1/8 inch are the gold standard for fire safety, according to the National Interagency Fire Center. Mesh with holes this small can block embers from entering your home. You should mount these in any attic vents, eave vents or other openings where air can travel into the house.

One often overlooked place to install mesh screens is your HVAC vents. If you have a ducted system, those air ducts can end up allowing embers from one room to escape into other parts of the house.

By adding mesh screens to every vent in your home, you can prevent a fire that starts in, say, the kitchen from spreading to the bedrooms through the vents. This will buy your family more time to get out of the house safely and potentially limit the spread of the fire altogether.

If you have older, single-pane windows, consider adding mesh screens to these as well. These older windows are more prone to breaking from radiant heat during a fire. If they do, that creates a wide opening for embers and flames to get into your house.

Ultimately, the best thing you can do is replace those older windows with newer, double-pane designs. But that's not an easy, weekend DIY. In the meantime, screens are a cheaper, more DIY-friendly way to at least block embers from getting into the house if the glass breaks.

3. Close your fireplace flue when the chimney is not in use

Another easy-to-overlook entry point for embers and flames is your chimney. While it might seem convenient to keep the flue open year-round so you don't accidentally start a fire in the fireplace with it closed, it's not worth the risk.

If this is something you're liable to forget, consider creating recurring calendar events in your phone: One in spring reminding you to close the flue ahead of the warm season and one in late fall reminding you to open it back up again so you can use the fireplace.

4. "Firescape" your yard

A lot of traditional home landscaping practices pose a bigger fire hazard than you might think. Do you have wood mulch in the garden beds next to your house? That's like piling kindling right up to the sides of your home. Did you plant ornamental grasses or creeping juniper as a ground cover? Both of those are fuel for a spreading wildfire.

While you don't have to rip out every plant and pave your garden over with hardscape to stay safe, a few minor tweaks to your design can make a huge difference in your home's ability to survive a wildfire.

Here are some of the best practices, according to the National Interagency Fire Center:

• Don't use flammable mulch within five feet of your home or other structures. You can use gravel, hardscaping or other non-flammable alternatives in these zones.
• Any larger woodpiles or other flammable materials (like firewood or propane tanks) should be 30 feet away from structures.
• Choose fire-rated plants for your garden. No plant is "fireproof," but some are more resistant to burning than others – either because they're less likely to ignite in the first place or because they produce fewer embers to spread the fire if they do burn. You can search online for fire-resistant plants native to your region to find ideas that will grow well in your climate and lower your home's fire risk.
• Remove flammable structures that have fallen into disuse, like a rotting pergola or old shed.
• Aim for at least 10 feet of space between groups of shrubs. Long, continuous rows of vegetation can become highways for fire to spread.
• Prune tree branches to a height of 15 feet above the ground. This can prevent "ladder fuels" or material that allows a brush fire on the ground to "climb" up a tree and begin spreading through a canopy.

5. Clear debris from your roof and yard regularly

Dead leaves and branches on your roof or in your gutters are a huge fire hazard, so you don't want to let this debris build up. Clear out this debris from your roof and gutters regularly.

The same goes for debris on the ground. Rake leaves and other plant debris away from your home and either pile it at the back of your yard to compost or rake it into your lawn and go over it with a mulching lawn mower so it breaks down faster.

6. Seal gaps and cracks where flames could get in

You may know about weatherstripping and sealants to insulate your home in the winter. But these same practices are just as important in the summer when fire risk is higher. Any gaps and cracks around the home that let the warm air out can let flames in if a fire breaks out.

If you haven't inspected your home lately, walk around to check for gaps and cracks in your siding, along the eaves of your house, and near windows and doors. Then, add weatherstripping as needed to windows and doors.

Don't forget your garage door when you do this. It's easy to overlook, but this is another area where flames can get in.

7. Add a battery back-up to your garage door and sprinkler system

When fires break out, power outages are often soon to follow. If your car is in your garage when that happens, you might not be able to evacuate as quickly as you need to. If the door can't be opened manually – or even if it can, but it's finicky – adding a battery back-up ensures that you can still get out quickly in an emergency.

The same is true for a sprinkler system. If you have an irrigation system in your yard, turning this on as soon as you learn of a fire in your neighborhood can help dampen any flammable plants in your yard and slow the spread of flames. So you want to know you can have those sprinklers running even if the power goes out.

8. Move small flammable objects at least five feet away from your home

Wood mulch isn't the only fire hazard you might unknowingly have next to your home. Wood planters, patio furniture, grills and other common patio or deck items can end up putting your home at risk in a fire. When you're not using them, make sure they're stored at least five feet away from the house.

For larger planters, try to design your setup so that they're further from your home. If that's not possible, make sure they can be moved further away temporarily during high fire weather.

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Think you need $1 million or more to retire happily? You're not alone. Northwestern Mutual's 2026 Planning & Progress Study found that Americans think they need $1.46 million to retire comfortably. High-net-worth Americans think they need even more — an average of $2.67 million. Meanwhile, conventional wisdom says you should save at least 10 times your annual salary.

But here's the reality: many retirees do just fine with far less.

You don't have to spend your entire working life chasing a seven-figure benchmark. Combined with Social Security and smart estate planning, a retirement fund of $300,000 to $400,000 is often enough to enjoy a comfortable, stress-free retirement.

Matt Twiford, fractional CFO and Managing Director of the Pegacom Group LLC, notes, "While it would be nice to have $1 million in retirement, not having it doesn't mean you can't enjoy a good quality of life and feel somewhat financially free."

Here are 6 practical reasons why a "modest" retirement fund may be more than enough to be happy in your golden years.

1. Keeping your spending in check prevents lifestyle creep

On average, Americans have roughly one year's worth of their current annual income saved in tax-advantaged accounts. For most households, that figure hovers around $80,000, according to a SmartAsset study. That's far less than $300,000 and worlds away from the magic number of $1.46 million. Other surveys suggest that only about half of retirees have any retirement savings at all.

Even so, retirees who paid off their mortgage years ago and have annual expenses of about $45,000 to $50,000 avoid the stress that can come with maintaining a more extravagant lifestyle — or lifestyle creep (increased spending on non-essentials and making luxuries feel like necessities).

Paying down or paying off a mortgage and resisting expensive vehicles and gadgets can save thousands over time and make a happy retirement possible even with limited savings.

2. Moving to a lower-cost area can stretch your retirement dollars

Location plays a big role in retirement finances. Living in high-cost states such as Hawaii, California, New York, or Massachusetts takes a much bigger bite out of your budget than living in places such as Tennessee, Arkansas, Oklahoma, or Missouri. Choosing a lower-cost state frees up more money for travel, family, or charitable giving, rather than sinking more cash into housing, taxes, utilities and healthcare.

“My advice would be to start by evaluating where you are and what you have,” says Twiford. “Many retirees own their home outright and have little if any debt, along with a large Social Security check. That's great if that's the case. Others may rent and have few assets, but hopefully some funds from Social Security coming in. Regardless of where you are, analyze it honestly and be truthful with yourself.”

3. Social Security and savings can provide a steady base income

As of 2026, the average monthly benefit for retired workers is approximately $2,071, or about $25,000 annually. While that's a good number, it's probably not enough to live on each month for most people. However, a couple with combined benefits of $40,000 to $50,000 per year only needs about $20,000 to $40,000 from savings to reach a $60,000 to $70,000 lifestyle.

For example, claiming $2,000 per month in benefits at age 62 with a life expectancy of 87 yields $600,000 over your lifetime. But because Social Security payouts grow the longer you delay, waiting until age 70 boosts your annual benefit by roughly 80% compared to starting at 62.

4. Low-risk investing can generate a reliable income

Generating income from investments while also preserving hard-earned savings is key, especially for those with a modest retirement fund. When savings are limited, low-risk investments are often the smartest move. That's because protecting your principal takes priority when you don't have time to recover from market losses.

Most financial experts recommend taking a more conservative investment path as you near retirement. Instead of risky, higher-yield investments, consider low-risk investments, such as bonds, Treasury notes, money market funds, fixed annuities, and CDs.

Robert Laura, retirement expert and co-founder of Retirement Coaches Association, suggests considering preferred stocks, another asset class that doesn't get much attention but can put more income in a retiree's pocket. Preferred stock can be particularly helpful to a retiree with a more modest nest egg. "For example, the iShares Preferred and Income Securities (PFF) ETF currently yields over 5%."

While it's true that all investments carry some level of risk, low-risk assets are typically less likely to fail.

5. Planning for healthcare costs now removes one of retirement’s biggest threats

A healthy 65-year-old woman can expect to spend around $340,000 on healthcare over the course of her lifetime. A 65-year-old man can expect to spend about $297,000, according to Milliman's 2026 Retiree Health Cost Index.

Those figures assume the person has original Medicare, Medicare Part D for prescription coverage, and a Medigap Plan G supplement plan. However, these figures do not include long-term care, which can easily add up to six figures. Unfortunately, most retirement plans can't cover a bill of that size.

"Max funding an HSA can help reduce these costs and thus withdrawals from an IRA or other investment accounts," says Laura of Retirement Coaches Association. "Additionally, allocating funds to a Roth IRA for this purpose, since they come out tax-free in retirement, can also play a role in reducing taxes on distributions. It's also worth noting that some large companies do offer health care to part-time employees."

Also, by taking care of your health, getting routine tests and screenings (many covered by Medicare), getting recommended immunizations, and practicing healthy habits, like not smoking, you can enjoy a higher quality of life and stretch your retirement savings even further.

6. A cash buffer helps during tough times

Life happens. Whether it's unexpected car or home repairs, a health issue, or rising inflation, things don't always go as planned. That's why retirees with more modest lifestyles usually keep a three- to six-month supply of cash in an emergency fund to cover living expenses — just in case.

Having a little extra cash on hand helps create a financial buffer that can keep you afloat without relying on credit cards or high-interest loans.

According to NerdWallet's April 2026 savings report, nearly half (45%) of Americans surveyed said they are actively saving money in a bank account for emergencies. Since an emergency can happen at any time, it's probably best to put your emergency fund in a high-interest savings account for easy access rather than a long-term investment fund.

Why a "modest" retirement fund can be enough

In the end, a "modest" retirement fund can be more than enough to be happy. By focusing on smart habits around spending, investing, saving and everyday life, you may discover you already have more than enough to live comfortably.

The real secret isn't a massive nest egg. Instead, it's having the freedom, flexibility and peace of mind to enjoy all of the years ahead. After all, your retirement shouldn't be only measured in dollars, but by how well your money lets you live the life you actually want.

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The letter arrives unexpectedly in the mail, tucked among bills and junk mail, and many people are likely intrigued.

A former employer has a proposition. The letter's recipient is vested in a pension at their former workplace, and that pension is still on track to be paid every month for life once they reach a certain age.

The employer has an offer: The person can take a one-time lump-sum amount now instead of future monthly pension payments. The window for making a decision comes with a deadline, so don't wait too long to decide, the letter says.

For the former employer, this is a chance to reduce some long-term risk and limit how much future pension payments to employees might affect the company's financial performance.

But if you're the one receiving the letter, you might need to puzzle over the math, trying to figure out how the numbers will work best for you.

• Is it wiser to stick with the plan you had — drawing a pension when the time arrives?
• Is the lump sum an opportunity to build an even better retirement?

People still working for an employer that offers a 401(k), a pension or both face similar questions as they gear up for retirement. What are the best options for them, and are there ways they can act before retirement to get the most out of their money?

For example, if their plan allows it, should they roll their 401(k) money into an IRA before they retire, to protect their assets and perhaps have more investment options? If they do, should they also take their pension as a lump sum and use that to replenish the 401(k) account?

Are there other strategies they can put into play?

To reject or not

There are things to mull over here.

One reason to decline a lump sum could be that you expect a long life — much longer than the average — and the pension is guaranteed, regardless of how long you live.

Holding on to that pension promise might feel less risky than taking the lump sum and investing it on your own.

In contrast, a reason for taking the lump sum could be that doing so will give you more control of the money as you explore the options for investing it and how that might fit in with your other investments.

Perhaps you have other retirement savings, and the lump sum would give you an opportunity to leave more of a legacy for your children.

The questions are many, and the answers aren't sitting on a one-size-fits-all shelf waiting for you to put them to use.

This is, without a doubt, a complex decision that requires careful thought.

A case study

All that said, though, in many cases, I find it's best to take the lump sum, seizing control of your future and putting the money to the best use for you.

In my experience, you can use that lump sum to purchase an annuity that will match the monthly pension payment and still have money left to invest in other ways.

Rolling over a current 401(k) into an IRA can also be a wise move in many instances. I've seen that play out in real life, and here is one example: Sometime back, a client still working at the business where she has a pension and a 401(k) came to me to review her options and try to determine the best way forward.

In her case, the numbers were sizable, which made the decision even more consequential. The monthly pension she had earned would pay her $5,855 a month for life or $4,808 monthly if she chose an option that allowed her spouse to continue to receive the pension after her death.

After evaluating the numbers and the possibilities, we came up with a plan.

We decided to roll over her 401(k) money, and when she retires, we will replenish the account we moved with the lump-sum money from her pension.

We could arrange for her to buy an annuity that would pay her the same $4,808 as the spousal option. She'll have the same amount of income that the pension would provide, but with a larger amount of invested assets.

If necessary, seek assistance

If you receive a letter offering a lump-sum option on your pension — or you're nearing retirement and wondering about the proactive steps you could take —review the numbers carefully and see how they line up with your personal situation and goals.

Usually, you get only one chance to make a decision on this, and you want to make the right one for you.

It's understandable if you find the options confusing and overwhelming. Plenty of other people are just as confused.

If you work with a financial professional, bring them into your decision-making process. They can help you review the numbers and decide on a strategy that's best for your situation.

Maybe that's keeping those pension payments in place. Maybe it's using the lump sum to buy an annuity. Maybe it's taking the lump sum and investing it in some other manner.

Ultimately, it's your money and your decision. But with thoughtful consideration, you can arrive at the right choice and feel satisfied that you did all you could to try to give yourself a more secure future.

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.

By the time September arrives, taxes are probably the last thing on your mind.

Summer is winding down, spring filing is behind you, and the third-quarter estimated payment due on September 15 feels like a formality.

For most business owners, it is whatever they paid last quarter, sent off without much thought.

That habit is where the money leaks.

By September, you can see most of the year:

• Two-thirds of your income is already on the books
• You know whether the year is running ahead of plan or behind it
• The spring projection your estimates were built on is probably out of date

The Q3 payment is a great opportunity to true up before the year closes. Skipping that recalculation is one of the most common and most avoidable mistakes I see.

I'm a CPA and head of Tax at Gelt, and here is what the conversation with your own CPA should cover before the deadline.

Recalculate the number — don't repeat it

Most business owners pay their Q3 estimate by copying the Q2 figure forward. That works only if nothing changed, and for a growing business, something almost always has.

A strong sales quarter, a large client payment, a capital gain or a major asset purchase can all push your income far from what you projected in April. If your estimates are still built on that spring number, you are likely to be underpaying, or worse, overpaying, and not find out for months to come.

The fix is to rerun the projection with actual numbers through August:

• Pull your year-to-date income and compare it to the figure your estimates were based on
• Add any one-time events you're still expecting that may not have been in the original plan
• Recalculate what you owe for the full year, then check it against what you have paid so far

As a CPA, I'd recommend doing this in early September, not on September 14. If the review turns up a shortfall, you want time to act on it.

Know the number that protects you

You do not have to predict your tax bill perfectly to avoid a penalty. The IRS gives you a safe harbor, and hitting it is the goal.

You generally avoid an underpayment penalty if you pay the smaller of two amounts:

• 90% of what you owe this year
• Or 100% of what you owed last year

If your adjusted gross income last year was over $150,000, that second figure rises to 110%.

A few numbers worth keeping in mind:

• You face a penalty only if you are short by $1,000 or more after withholding and credits
• The penalty is really interest, currently 7% a year compounded daily, charged on what you underpaid
• It runs from each missed deadline until you pay, so a Q3 shortfall keeps costing you until you close it

For most business owners, the prior-year safe harbor is the one to lean on, because it is a known, fixed number. You already know last year's tax. Paying 100%, or 110% if you are over the income threshold, across four even installments is the cleanest way to stay protected when this year's income is hard to pin down.

Use withholding as a late-year fix

If your September review turns up a gap, there is a tool most business owners overlook.

Estimated payments count only for the quarter you actually make them. Withholding works differently. The IRS treats withholding as if it were paid evenly across all four quarters, even if it all came out of a December paycheck.

If you or a spouse has W-2 income, increasing that withholding late in the year can patch an earlier shortfall in a way a catch-up estimated payment cannot.

There is also relief if your income is genuinely uneven. The annualized income installment method lets you match your payments to when you actually earned the money, so a large third or fourth quarter is not treated as income you should have paid tax on back in April.

If most of your income lands later in the year, this can lower or even erase a penalty. It takes more documentation, so it is a conversation to have with your CPA rather than a box to check on your own.

At Gelt, we treat the September estimate as a planning moment, not just a payment. It is the point where the year is finally clear enough to act on, and there is still time left to act.

Make September 15 a checkpoint, not just a payment

What makes this deadline matter, beyond the payment itself, is what it sets up. A wrong Q3 estimate does not stay contained in Q3. It follows you into the final January 15 installment and into the bill you settle in April.

When you recalculate now, you get more than a correct payment. You get an early read on where the year will land, and that gives you room to make real moves before December, such as adjusting your compensation, timing a large purchase, funding a retirement plan or accelerating a deduction.

So before September 15, ask your CPA three questions:

• What do I actually owe for the year based on income through August?
• Am I on track to hit my safe harbor?
• If I am short, do I fix it with an estimated payment, with withholding or by annualizing my income?

Those three questions turn a routine deadline into the most useful tax checkpoint of your year.

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

I like long-term CDs. They earn a guaranteed rate of return, the APY won't change, and they can help you meet long-term savings goals. In a world full of questionable financial options, they're among the most dependable things you can get.

Yet, timing when to open one is imperative. Locking in a rate now, with the current 3.50% inflation rate as a permanent ceiling, will likely prove short-lived, which means inflation might erode some of your future purchasing power. With the ongoing war in Iran raising gas prices again, expect inflation to follow suit.

On top of this, the Federal Reserve is currently holding steady. However, if the bond market tightening doesn't bring down inflation through higher borrowing costs, they may be forced to hike rates — meaning today's locked-in rates could quickly look like a missed opportunity. With that in mind, here is the short-term strategy I'm currently using, as someone who checks and analyzes savings rates for a living, to stay flexible as the market settles.

Short-term CDs provide the dependability and flexibility you want now

I recommend a short-term CD in the interim. With one, you'll have all the benefits you come to love about CDs, with quick access to your cash.

They work best if you have an emergency fund already established and don't need to touch your money during the term. If you have to break it open for any reason, you'll lose some of your earnings to early termination fees. Thankfully, with terms that accommodate all savings goals, you can find the best fit for your goals and cash flow.

Use this Bankrate tool to shop for and compare the best CD rates quickly:

Having quick access to your cash is important because if inflation continues to creep back up, you might want to revisit where you invest your cash when the CD matures. And if the Federal Reserve decides to hike rates later this year, it places you in an excellent position to capitalize on higher returns.

Does waiting really make that big of an impact?

Timing matters when choosing the right savings account. And knowing when to lock in a long-term CD can be the difference between earning hundreds to thousands of dollars more.

To demonstrate, say you locked in a $50,000 five-year CD at 4.00%. You'll earn $10,832.65. However, if you wait a few months and the Fed hikes rates, you could have access to higher returns. A five-year CD at 4.25% APY will earn you $11,567.33, a difference of almost $735, just for waiting a few months.

That's pretty significant, and it's one of the reasons why I would wait on a longer-term CD. On the other side of the coin, you might be thinking, well, would waiting hurt me? After all, what happens if CD rates drop in the interim?

Rest assured, I don't see that happening any time soon. I review CD rates biweekly and have found that some banks have raised CD rates. Here are some of the ones I found recently that rose:

And with inflation so high, cutting the federal funds rate would not be a sound strategy to curb rising costs. While waiting carries the risk of returns remaining flat, the potential upside of a higher rate makes this strategy a smart move in this environment.

Ultimately, short-term CDs are the better play right now. They provide a safe place to park your cash while the economic landscape settles, without locking you into a long-term commitment. By prioritizing terms that keep your money accessible, you're not just earning a competitive term — you're maintaining the flexibility to pivot as soon as better opportunities arise.

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The Dow Jones Industrial Average and the S&P 500 gapped up to new all-time highs at the opening bell on Wednesday, lifted by relative quiet in the Middle East and solid data from the earnings calendar. Heavy exposure to hot AI-related names weighed on the Nasdaq Composite, as markets remain concerned about Big Tech's spending plans.

By the closing bell, the blue-chip Dow Jones Industrial Average had added 0.5% to 54,349, another new record closing high. But the broad-based S&P 500 was off 0.2% to 7,723 and the tech-heavy Nasdaq Composite was down 0.8% to 26,363.

All three remain near their respective peaks despite "no shortage of crosscurrents" to navigate, as LPL Financial Chief Technical Strategist Adam Turnquist observes. Turnquist cites the war in the Middle East and higher oil prices, as well as rising interest rates and shifting expectations about how the Federal Reserve will respond to inflation under Fed Chair Kevin Warsh.

The front-month West Texas Intermediate crude oil futures contract was down 0.9% to $75.10 per barrel amid another pause in hostilities around the Strait of Hormuz. The 2-year Treasury yield ticked lower to 4.179% from 4.194% on Tuesday, while the 10-year was at 4.615% vs 4.627% and the 30-year dipped to 5.171% from 5.189%.

Markets are also looking forward to the release of the July jobs report before the opening bell on Friday, the main event on this week's economic calendar.

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Turnquist notes that semiconductor stocks traded down more than 20%, meeting the technical definition of a bear market while investors, traders and speculators "demanded evidence that rising capital expenditures were translating into meaningful returns" for the AI trade.

"Despite these challenges," he says, "the S&P 500 has remained remarkably resilient," with capital rotating out of communication services stocks, for example, and into healthcare stocks. As Turnquist concludes, "Fundamental conditions have also remained constructive, supported by an economy that continues to grow and corporate earnings."

Indeed: Amgen (AMGN, +4.6%) was the best-performing Dow Jones stocks on Wednesday after management of the biotechnology giant reported expectations-beating second-quarter results and raised full-year guidance.

SpaceX had a lot of gravity

SpaceX (SPCX, -13.6%), on the other hand, cratered in response to its first earnings report as a publicly traded company. Management beat expectations, but not by enough after the biggest IPO in stock market history.

Management said it will expand Starlink Mobile into a full-fledged wireless carrier to compete with telecoms such as AT&T (T, -1.3%), T-Mobile USA (TMUS, -2.1%) and Verizon Communications (VZ, -0.9%).

But Elon Musk downplayed talk of selling China-based electric vehicle operations so Tesla (TSLA, -1.8%) can merge with SpaceX and combine their AI operations.

Meanwhile, Advanced Micro Devices (AMD, -7.0%) sold off hard on word from SpaceX that it will work only with Nvidia (NVDA, +3.4%) to supply the chips and related infrastructure it requires to achieve its extraterrestrial ambitions.

Walt Disney tells another good story

Walt Disney (DIS, +3.7%) beat Wall Street expectations for its fiscal third-quarter bottom line, reporting earnings of $2.05 per share vs a forecast of $1.86. Top-line growth of 6.8% to $25.2 billion fell just short of analysts' estimate of $25.4 billion.

But management reiterated its guidance for double-digit EPS growth for the current fiscal year, as well as for fiscal 2027, and a new leader remains optimistic about the company's near-term trajectory.

"Decades of IP investment have built deep fan connections that translateinto strong financial results," CEO Josh D'Amaro (PDF) said, citing accelerating global guests growth at its theme parks, the success of "Toy Story 5" at the box office and ESPN viewership gains. "Together, our results show a unique ability to engage consumers at scale, both digitally and physically, even amid macro uncertainty."

The consumer discretionary stock enjoyed a similar bounce in May following D'Amaro's first reported quarter as CEO; he replaced Bob Iger in March. But it was down more than 13% year to date through Tuesday while the S&P 500 was up almost 14%. Its trailing-12-month, five- and 10-year comparisons are similarly unfavorable.

In fact, despite the high quality of its intellectual property, DIS has been a buy-and-hold bust, as Kiplinger contributor Dan Burrows writes.

"While it's true that you can manipulate historical returns by fussing with their beginning and end points," Burrows explained earlier this year, "Disney's record vs the broader market over pretty much any standardized period you care to measure is terrible." For the past 20 years specifically, DIS' average annualized return has trailed the S&P 500 by more than 4 percentage points.

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The July jobs report came in much weaker than expected, lowering expectations that the Federal Reserve will raise interest rates at its September meeting.

According to the Bureau of Labor Statistics, the U.S. lost 23,000 jobs in July, missing economists' estimates for the addition of 85,000 new jobs.

Additionally, job growth for May was downwardly revised by 66,000, from +129,000 to +63,000, and June's figure was lowered by 37,000, from +57,000 to +20,000. This results in 103,000 fewer jobs than previously reported.

The unemployment rate, which is derived from a separate survey, edged down to 4.1% from 4.2% in June as the labor force participation rate fell to 61.4%.

Local government led job losses, shedding 50,000 positions, while retail trade, which includes warehouse clubs, gas stations and general merchandise retailers, lost 19,000 jobs.

Healthcare, on the other hand, added 22,000 new positions.

Odds of a rate hike at the September Fed meeting fell after the release of the July jobs report. According to CME Group FedWatch, futures traders are now pricing in a 44% chance the central bank will increase the federal funds rate next month, down from 55% one day ago.

ADP jobs report also came in lower than expected

Wall Street got a glimpse of how things are going in the labor market early Wednesday, with ADP's National Employment Report, which showed private payrolls rose by 44,000 in July — well below the 95,000 jobs added in June and the 75,000 economists expected.

"Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market," says Dr. Nela Richardson, chief economist at ADP. "Typical hiring patterns, meanwhile, are changing as employers react to shifting macro-economic conditions."

With the July jobs report on the books, we looked at what economists, strategists and other experts on Wall Street have to say about the results and what they could mean for the Fed and investors going forward. You'll find these reactions, edited at times for brevity, below.

What Wall Street says about the July jobs report

"The July payroll release disappointed across the board reversing the trend of this year's positive labor market momentum. The combination of negative headline job creation and downward revisions stand in contrast to the lower unemployment rate, presenting conflicting signals for the Fed in regard to the overall health of the labor market. Today's release should be modestly positive for risk assets as yields come down and expectations for rate hikes are pushed out." - Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments

"Headline payrolls were really disappointing, with 23,000 jobs lost in July. But the weakness was concentrated in local government, largely due to school-calendar seasonal effects, and leisure and hospitality as the World Cup boost rolled off. The bigger picture is that unemployment fell to 4.1%, its lowest in a year. Combined with low initial jobless claims, that suggests the labor market remains in solid shape despite the volatility in payrolls." - Sonu Varghese, Chief Market Strategist at Carson Group

"The weaker-than-expected jobs report likely doesn't change much for the Federal Reserve, as Chair Warsh is allowing the data to guide policy and the data as of now likely warrants keeping rates at current levels. Friday's negative jobs number raises the importance of next Wednesday's CPI for July, which may see an uptick, since oil prices spiked during the second half of July, given the re-escalation of tensions in Iran. This may very well be one of the more noisy CPI reports in recent memory." - Brent Wilsey, Chief Investment Officer at Wilsey Asset Management

"While the unemployment rate is falling, that is mostly for the wrong reason — not enough workers. Immigration compensated for the aging of the workforce in the first few years of the post-pandemic expansion, but that's not happening anymore. At the same time, the job market is doing a mediocre job of providing opportunities for new entrants. Unemployment among workers aged 20-24 without prior work experience, a good proxy for the Class of 2026, was 242,000, down slightly from 253,000 in July of 2025. The last two years have seen the highest unemployment for recent grads since 2016. In the broader context, the July jobs report shows that job growth was slow in the middle of 2026, but the job market is still tightening due to a shrinking labor force." - Bill Adams, Chief U.S. Economist at Fifth Third Commercial Bank

"The July jobs report is a game changer in the sense that all of the recent focus has been on inflation and this report highlights the risks that are embedded in the labor market as well. Before today, many were expecting that the Fed had no choice but to raise rates in order to fight stubbornly high inflation, because the job market was so strong, but this report shows that isn't the case. Next week's CPI release will be important — and if the data continues to come in higher than expected, it could raise the probability of a rate hike at the Fed’s next meeting — but today's jobs numbers should be enough to keep the Fed on hold for at least another meeting, which all things being equal is a positive for the stock market." - Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management

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When you move — whether upgrading, relocating for work or inheriting a family property — you're often left with a deceptively complex decision: Should you keep the home and rent it or sell and move on?

At its core, the rent-vs-sell decision comes down to a fundamental trade-off.

• Renting the property offers the potential for ongoing income and continued exposure to long-term appreciation. It could also provide flexibility, whether as a future residence, a home for family members or a legacy asset.
• Selling the home delivers immediate liquidity, simplifies your financial life and allows you to redeploy capital more efficiently.

Neither approach is inherently superior; the right decision depends on which trade-offs align with your broader financial plan.

A logical starting point is to evaluate the potential return of the property, but that requires defining return correctly. Many homeowners focus on gross rental income and quickly conclude that the property is cash flow positive.

In reality, what matters is net rental yield after accounting for all operating costs, including vacancy, maintenance, property taxes, insurance and management fees if applicable. Once these costs are included, the expected return is often significantly lower than initial assumptions.

Consider a simple illustration. A home valued at $600,000 might rent for $2,500 per month, generating $30,000 annually in gross income. After factoring in vacancy, repairs, insurance, property taxes and potential management costs, the net cash flow might fall in the range of $16,000 to $18,000 per year, implying a net yield of roughly 3%.

By contrast, selling the property and investing $600,000 in a diversified portfolio earning 5% annually would produce about $30,000 per year before taxes.

This comparison is not to suggest that one outcome is inherently better, but rather to highlight that rental property should be evaluated as a net return on capital, not simply as an income stream.

Look at the entire financial impact

Beyond return, risk and portfolio concentration deserve careful consideration. Many homeowners who keep a former residence while purchasing a new one end up with a significant portion of their net worth tied up in residential real estate, often within a single geographic market.

Selling reduces that concentration and converts an illiquid asset into liquid capital that can be diversified or used to fund other financial priorities. Renting preserves the exposure to real estate, which might provide an inflation hedge and long-term appreciation potential, but it also limits liquidity and flexibility.

Taxes are another area in which the decision becomes more nuanced, and many homeowners underestimate the long-term implications.

One of the most valuable tax benefits available to homeowners is the capital gains exclusion under Internal Revenue Code Section 121. If you meet the ownership and use requirements — generally, having lived in the home as a primary residence for at least two of the last five years — you can exclude up to $250,000 of gain if single or $500,000 if married filing jointly.

This benefit can meaningfully reduce or eliminate the tax cost of selling.

That exclusion is tied to timing. Many homeowners have a limited window after moving out during which they can rent the property and still qualify for the exclusion if they sell within the applicable five-year lookback period.

This creates a viable hybrid strategy in some cases: Rent the home temporarily while preserving the option to sell tax-efficiently.

About depreciation

Once a home is converted to a rental, depreciation becomes a key factor. The IRS generally allows the building portion of a rental property to be depreciated over 27.5 years, creating annual deductions that can reduce taxable income.

While this can be a meaningful short-term tax benefit, it also introduces a future cost. When the property is ultimately sold, the portion of gain attributable to depreciation is subject to what's referred to as unrecaptured Section 1250 gain, which is taxed at rates of up to 25%.

A simple example illustrates the point. Assume that $400,000 of a home's value is attributed to the building and the property is rented for five years. Straight-line depreciation over that period would total about $72,700.

At the time of sale, that amount is generally subject to tax at a rate of up to 25%, resulting in a potential federal tax liability of roughly $18,000 on that portion alone.

Perhaps more important, this depreciation-related gain typically can't be excluded under the home-sale exclusion, even if other portions of the gain qualify. For many homeowners, this creates an unexpected tax bill that offsets some of the perceived benefits of renting.

Another misunderstood area

Rental losses are another area that's often misunderstood. While depreciation and other expenses can create tax losses on paper, rental real estate is generally considered a passive activity for tax purposes. As a result, those losses typically can't offset wages or other active income.

There is a limited exception that might allow up to $25,000 of rental losses to offset ordinary income for certain taxpayers who actively participate in the property, but this benefit phases out as income increases.

Losses that can't be used currently are generally carried forward, which means the tax benefit might be delayed rather than eliminated.

Consider the big picture

While financial and tax considerations are central to the decision, don't overlook the lifestyle component. Even with professional management, the owner remains responsible for key decisions, oversight and the financial consequences of vacancies and repairs.

Cash flow isn't guaranteed, and expenses tend to be unpredictable rather than smooth. A useful way to frame this consideration is to ask whether you're comfortable taking on what is effectively a part-time role as a property owner, particularly if you're approaching or already in retirement.

Given the range of factors involved, a structured decision framework can help bring clarity. The most important questions tend to be straightforward:

• Do you need the proceeds from a sale to fund your next financial goal, such as purchasing a new home or strengthening your balance sheet?
• Are you willing to take on the responsibilities of owning and managing a rental property, either directly or through a third party?
• What is the realistic net return after all expenses, rather than the optimistic projection based on gross rent?
• How important are simplicity and flexibility at this stage of your life?

Both renting and selling can be appropriate and financially sound decisions when aligned with broader goals.

• Renting can provide income and long-term appreciation potential, but it introduces complexity, variability and future tax considerations that are often underestimated.
• Selling offers immediate liquidity, simplicity and the opportunity to lock in favorable tax treatment, but it means giving up future real estate exposure and potential rental income.

Content in this material is for general information only and is not intended to provide individualized tax or legal advice. Discuss your specific situation with a qualified tax or legal professional.

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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.

Retiring with a traditional pension is a financial win, putting you among the lucky minority of Americans with such income. But your most important decision is still ahead of you. If your employer asks you to choose between guaranteed monthly checks and a lump-sum cash buyout, opting for the wrong payment type could cost you thousands over your lifetime.

"Everyone's situation is a little different," says Thrivent Financial Advisor Jason Rogoff. "You have to analyze the situation and look at what other assets people have, what other streams of income, their age and health."

When it comes to pension payouts, some rules may impact the decision-making process. For example, with many pensions, payouts end with the spouse, so they can't be passed on to the children. Meanwhile, the majority of private pensions don't account for inflation with a cost-of-living adjustment (COLA). Then there are tax treatments and investment choices to worry about.

Since there are so many moving parts, it's important to put yourself through the paces before selecting a payout. To help you decide, answer these three questions first.

1. Do your guaranteed income sources already cover your monthly bills?

A peaceful retirement is one where you don't have to worry about paying the bills. The rent is covered, there's food in the fridge and the lights are on. Rogoff says retirees get that peace of mind through guaranteed income, and if they don't have enough of that, annutizing a pension may be a way to create it.

"I like to have a guaranteed source of income for my clients over things like housing, utilities, healthcare and food," says Rogoff. "One of the first questions people should ask is, do I have enough guaranteed income, or do I need more? '"

To determine if you have enough guaranteed income, add up all your monthly expenses and subtract them from your guaranteed monthly income before your pension. If you face a shortfall, Rogoff said it may be better to take lifetime monthly payments to ensure your expenses are covered.

There are downsides to getting paid monthly for your lifetime, including:

• Inflation: Most private pension payments are fixed with no inflation protection. (Public plans usually do offer a COLA.)
• Liquidity: You can't pull out more money for a one-time emergency.
• Stability: Payouts depend on the plan's stability and may be reduced. The federal government's Pension Benefit Guaranty Corporation (PBGC) acts as an insurer of private pensions and will step in if a pension fails. All 50 states offer some form of protection for public pensions.
• Heritability: The benefit often ends with the spouse. You typically can't pass it on to your children.
• Tax complications: If your monthly benefit is significant, it may push you into a higher tax bracket over several years, especially if you'll have to take required minimum distributions (RMDs) at 73 or 75.
• Hybrid options: You may not have to make an all-or-nothing decision, as some pensions allow you to divide your benefit into a lump sum and monthly checks.

2. Are you comfortable managing an investment portfolio through market ups and downs?

When you take a lump sum payout from your pension, your employer pays you an amount that is typically calculated by estimating the present value of all your future monthly checks using IRS interest rates and life expectancy tables. You give up a guaranteed monthly income for life and shift all the investment risk onto yourself. But in return, you get complete control over your money and full investment flexibility.

That can be scary for some retirees and exciting for others. Knowing your level of comfort with investing and the markets is essential in making the right decision. After all, if you take the lump sum and select to roll it into an IRA, you will have to decide what to invest in and when to sell. There is also the potential for it to grow more in the markets than if you chose a fixed monthly payout over your lifetime.

"If you have financial sophistication and don't mind dealing with risk, it may be wisest to take the lump sum," said Jeffrey Smith, owner of The Retirement Smith, a financial advisory firm.

Keep in mind that if you take the lump sum and don't roll it into an IRA, it will be treated as ordinary income and subject to taxes, including a 20% withholding by your employer in certain circumstances.

3. Is leaving an inheritance important, and how is your health?

Your health and legacy goals must be considered in lockstep when deciding how to receive your pension payments. After all, your guaranteed monthly pension payments are tied to your life expectancy; for many pensions, the checks stop coming once you pass away.

If protecting your spouse is of utmost importance and there is a significant age gap, a monthly payout with a joint-and-survivor option may be the better choice. It guarantees your spouse continues to get paid after you are gone. Keep in mind that selecting that option typically reduces your monthly benefit.

Note that if a married person wants to take a lump sum or a single-life annuity (cutting out the spouse), the spouse must sign a waiver.

Installment payments may also be the better option if everyone in your family lives well into their 90s, as it guarantees you won't outlive your money. But it also means once you and your spouse are gone, your kids won't see a dime. So if legacy is more important than protecting a spouse, a lump-sum payout that you can invest and leave to your children may be the better option.

No two retirements are the same

Whether to choose a lump-sum payout or guaranteed monthly income over your lifetime will depend on your cash flow, health, legacy and financial sophistication. What makes total sense for one person may seem completely wrong for another.

Before you make a decision that you can't take back, weigh all your options, answer these three questions, and if you are still unsure, seek the help of a trusted adviser. Remember, you are among the lucky ones to still have a pension — make sure you are getting the most out of it for you and your family.

Read More "3 Questions" Stories

Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are:

• Retirement readiness
  • 3 Questions That Determine If You're Actually Ready to Retire Early
  • 3 Questions to Ask Before Unretiring
• Where to retire
  • Moving to Florida or Texas for Retirement? 3 Questions to Ask First.
  • 3 Questions That Reveal If You're Actually Ready to Age in Place
• Retirement savings and spending
  • 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You
  • 3 Questions That Help You Find Your Perfect Social Security Claiming Age
  • Go Ahead and Splurge, But Ask Yourself These 3 Questions First
  • Before You Give Money To Your Kids, Ask Yourself These 3 Questions
  • 3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof

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• Afraid to Dip Into Your Savings? 8 Guilt-Free Ways to Finally Enjoy Your Retirement
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One of the first questions many people ask after learning they’ll receive an inheritance is: "Will I owe taxes?"

It’s an understandable worry. Taxes can be confusing, especially during an already emotional time when someone has passed away. But there is some good news — receiving an inheritance doesn’t automatically mean you’ll owe taxes to the IRS.

That's because for most people, the inheritance itself isn’t a taxable event. Whether you owe anything depends on what you inherit, where you live, and whether those assets later produce income or are sold.

Still, before you decide what to do next, it helps to understand which tax rules might apply to your situation and when. Here's more to know.

Do you owe taxes on an inheritance?

When you first inherit money or property, your instinct might be to prepare for a heavy tax bill on your next federal income tax return. It's a natural concern, but the IRS actually treats inheritances with a surprising amount of grace.

As a general rule, the federal government doesn't handle inherited assets as taxable income.

Simply receiving cash, a house, a stock portfolio, or other property won't trigger an automatic tax event or change your baseline tax situation for the year. In most cases, you aren't required to report the initial inheritance on your federal return.

Where tax responsibilities tend to enter the picture is not from the gift itself. The inheritance itself is generally a "clean slate," so to speak; what you choose to do with those assets is what determines which tax rules may apply.

Different inherited assets come with different tax rules

If you inherit cash: For most people, inheriting cash doesn’t create a federal income tax bill. That's because, as mentioned, the inheritance itself isn’t taxable. But any income it earns afterward might be.

For example, if you deposit inherited money into a high-yield savings account, any interest you earn is generally taxable. The same applies if you invest the money and later receive dividends or realize capital gains.

If you inherit a house: Inheriting a home generally isn’t a taxable event. If you later sell the property, however, capital gains tax rules may apply.

That’s where the tax picture can start to change.

• Most inherited homes receive a stepped-up basis, which adjusts the property’s value to its fair market value at the time of the owner’s death.
• That can reduce the amount of taxable gain if you later sell the home.

For example, if you inherit a home worth $400,000 and later sell it for about that amount, you may owe little or no capital gains tax. If the home’s value increases after you inherit it, you may owe tax only on the appreciation that occurs after the inheritance.*

*This is a simplified example solely for educational purposes. Consult a trusted financial professional to help determine possible capital gains tax liability if you plan to sell an inherited home.

If you inherit stocks or investments: Stocks, mutual funds, and other investments generally aren’t taxable when you inherit them.

Much like inherited real estate, inherited stocks, mutual funds and other investments generally receive a stepped-up cost basis. If you sell them later, you may owe capital gains tax only on the appreciation that occurs after you inherited the assets.

If you inherit an IRA or retirement account: Inherited retirement accounts follow different tax rules than most other inherited assets.

While inheriting the account itself usually isn’t taxable, withdrawals often are. The rules depend on your relationship to the original account owner, the type of retirement account, and other factors.

• For example, distributions from an inherited traditional IRA are generally taxable, while qualified withdrawals from an inherited Roth IRA are typically tax-free.
• However, even though inherited Roth IRA distributions aren't taxed, most non-spouse beneficiaries are required under the SECURE 2.0 Act to withdraw all funds from the account within 10 years.

Because inherited retirement account rules can be complex, it’s important to understand these distribution timelines before taking money out and to consult a trusted tax advisor who knows your individual circumstances.

Common inherited assets and when taxes may apply

State inheritance taxes

Although there is no federal inheritance tax, a handful of states impose an inheritance tax paid directly by the beneficiary.

(Note: This is separate from a state estate tax, which is paid from the deceased person’s estate before assets are distributed.)

Whether you’ll owe state inheritance tax depends on where the deceased lived or owned property and your relationship to them — spouses and close relatives are often exempt.

If you’re unsure whether your state imposes an inheritance tax, our guide might help, but also consult a trusted tax professional or financial planner since every beneficiary's situation is different.

Keep in mind: Whether you’ll owe an inheritance tax largely depends on the state involved and your relationship to the deceased.

Frequently asked questions about inheritance taxes

Even though most inheritances aren’t subject to federal income tax, there are a few situations that can confuse beneficiaries.

Can you owe taxes years after receiving an inheritance?

Yes. While the inheritance itself usually isn’t taxable, you may owe taxes later if inherited assets earn interest or dividends, appreciate before you sell them, or require taxable withdrawals from a retirement account.

Does every state tax inheritances?

No. Only a handful of states impose an inheritance tax, and many exempt spouses and other close relatives. In most states, beneficiaries don’t owe a state inheritance tax.

Should you talk to a tax professional?

If you inherit a retirement account, real estate, a business, or other high-value assets, a qualified tax professional can help you understand how federal and state tax rules apply to your situation.

You can also find additional guidance in IRS Publication 559, Survivors, Executors, and Administrators, which explains the tax responsibilities of beneficiaries, executors, and estates.

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• Inherited an IRA? Key Distribution Rules to Know
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As affordability issues continue to plague the housing market, many homeowners are choosing to make changes to their home rather than their address to get the living space they need.

According to a recent survey from Citizens Financial Group, nearly half of homeowners now say that renovating their house is the most realistic financial option for their family — compared with just 13% who plan to buy a new home — and seven in 10 expect to complete a remodeling project in the next two years.

"They can’t find another place to go," says Linda Kody, a broker with Kody & Company in North Andover, Mass. "They love their neighborhood, and they want a home exactly the way that they want it."

The boom in renovations makes sense given the current state of the housing market. Home prices have jumped 54% since 2020, according to the Joint Center for Housing Studies at Harvard University.

Meanwhile, with mortgage interest rates hovering between 6% and 6.5% lately, many homeowners are reluctant to give up the 3% to 4% loans they scored before rates began climbing a few years ago. The resulting lack of inventory — there are 17% fewer homes for sale now than before the pandemic — also means there are fewer options available for those who want to move.

If you're among the many homeowners contemplating a remodeling project in the next year or two, these strategies can help you decide which projects to tackle and how to keep costs manageable.

Choose renovations strategically.

Start by thinking about your immediate maintenance needs and the functionality required for your lifestyle. If you're planning to stay in the house through retirement, for instance, consider adding design elements, such as a walk-in shower or zero-step entryway, that will make living there easier as you get older.

"The risk of having to move later can be significantly reduced if you prepare your home in advance," says Louis Tenenbaum, president and CEO of HomeRenewed Ventures, a Washington, D.C., firm that offers consulting services for homeowners to age in place.

Tenenbaum recommends completing as many necessary projects as possible simultaneously, because trying to remodel in stages as health and mobility challenges arise ends up being more expensive and stressful. Basic upgrades and repairs, such as replacing old wiring or fixing a leaky roof, also help your home retain its value and reduce maintenance costs in the future.

After that, look at high-use areas such as kitchens and bathrooms. If resale value is important to you, focus on projects that will allow you to recoup a big chunk of your costs.

Recently, that included exterior upgrades (such as replacing garage doors or upgrading siding), minor kitchen remodels and installing a backup power generator, according to Zonda, a home-building data and marketing company.

Keep spending in check.

For larger projects, Alan Archuleta, CEO and president of Archuleta Builders in Morristown, N.J., recommends starting with an architect or design firm with experience in your municipality. Rates for this type of work vary depending on scope, but the average is about $6,600, according to HomeAdvisor.

"The architects and towns dictate what you can and can't do to a home, from a zoning standpoint or an actual structural standpoint," Archuleta explains.

Get quotes from at least three contractors, and ask for itemized bids that spell out costs. Then, add an extra 20% to your budget to allow for surprise expenses, such as water damage or structural repairs, especially in older homes. "Remodeling often prompts code upgrades that would not otherwise be required," says Mari Adam, a certified financial planner in Boca Raton, Fla.

You can lower costs further by opting for midrange fixtures and materials, which balance quality and costs. If you can be flexible with your project’s timing, you may also find better contractor availability and pricing.

"The smartest approach right now is to renovate with intention, rather than rushing into a project," says Elizabeth Gomez, owner of Bridge City Contracting in Portland, Ore.

If you're planning a major renovation, comparing today's refinance rates could help you determine whether tapping your home's equity makes sense for your budget.

Use the Bankrate tool below to compare some of today's top refinance offers:

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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Many investors are struggling to find the right balancing act in the current market environment.

U.S. equity markets continue pushing to new all-time highs despite persistent inflation, elevated valuations, geopolitical uncertainty and higher interest rates.

These risks can make investors uncomfortable as markets rise and fall — sometimes in the same trading session.

But history suggests that all-time highs alone aren't a reason to step away, and new ETFs that help investors stay invested through highs and lows are growing in popularity.

Markets rise

New market highs tend to cluster together during prolonged bull markets.

From 1989 to 2000, the S&P 500 reached a new all-time high roughly every nine trading days. From 2013 to 2022, it was every eight trading days.

In 2026, it has hit a new all-time high over 20 times as of June — roughly once every five to six days.

Still, many investors have chosen the perceived safety of cash. According to the Investment Company Institute, assets in money market funds stood at $7.9 trillion as of July 22.

These investors have missed out on significant upside and may continue to do so. But at the same time, they cannot afford to ignore the downside risks markets currently present.

Markets also decline

Significant market declines can delay retirement, force spending changes or derail major goals like buying a home or affording higher education for children.

Declines can also undergo long periods: Look at the NASDAQ-100. It took nearly 15 years (March 20, 2000, to April 23, 2015) to fully recover from its prior peak after the tech bubble.

Many investors don't have that kind of recovery horizon, creating tension between participating in market growth and managing downside risk. It's a key challenge, but remaining on the sidelines doesn't have to be the answer.

This is where defined outcome ETFs, designed to help investors navigate unease and return to the market, can be one solution.

What are defined outcome ETFs?

Defined outcome ETFs seek to provide investors with equity market participation while limiting an initial level of losses over a specified outcome period, typically in exchange for reduced upside potential.

With strategies available across different underlying assets, protection levels and growth-oriented objectives, investors can choose an approach that best reflects their individual goals and time horizon.

While the market's direction will remain uncertain, having clearer parameters around potential gains and losses may provide the confidence needed to stay invested when volatility rises.

Defined outcome ETFs may be particularly relevant for investors approaching a major financial transition, such as retirement, who still need equity growth but have less capacity to recover from a significant drawdown.

Two defined outcome-oriented ETF approaches that have gained traction in today's environment are buffer ETFs and managed floor ETFs.

Buffer ETFs: Participate in market gains with a defined buffer against losses

Buffer ETFs may appeal to investors who want to maintain market exposure while seeking protection against an initial portion of losses over a specified period.

Typically tracking an underlying index like the S&P 500, Nasdaq-100 or Russell 2000, these ETFs provide participation in the index's gains up to a predetermined cap.

Common buffer levels (or standard amounts of downside protection) are 9%, 15%, 20% or 30% over a defined period, often three, six or 12 months. This means that if the index declines by less than the stated buffer over the outcome period, the ETF is designed to absorb that loss; if the decline exceeds the buffer, the investor remains exposed to losses beyond it.

The tradeoff is that buffer ETFs cap how much of an index's gains an investor can capture. For example, if the ETF has a 10% cap, and the index rises 13% over the outcome period, the investor's return would be limited to 10%, before fees and expenses.

These ETFs are often used for assets tied to shorter-term spending needs, frequently serving as an alternative for capital that may be needed within the next one to three years.

Managed floor ETFs: Stay invested with a built-in floor against declines

Managed floor ETFs, on the other hand, may appeal to investors who still need long-term equity growth potential but desire a strategy that is designed to reduce the impact of a severe market decline.

Unlike buffer ETFs, which seek to absorb an initial portion of losses over a defined period, managed floor ETFs are generally designed to tolerate shallow declines and step in with greater protection when markets begin to fall more sharply.

The strategy combines equity exposure with an options overlay intended to hedge against deeper losses while often maintaining meaningful upside potential.

The options positions are laddered across different expiration dates and renewed systematically. As a result, the fund's effective floor can change over time and may be higher or lower than its approximate target at any particular point.

Tradeoffs? Because the floor is maintained through active decisions rather than a fixed contract, protection can vary; the fund may still be repositioning when a rebound starts, missing part of the upside.

These funds also tend to carry higher costs and offer less predictability than buffer ETFs.

Don't want to pick a market movement side? Consider managing tension

Buffer ETFs provide defined protection over a set period in exchange for a capped upside. Managed floor ETFs take a different approach, seeking to limit deeper losses while often maintaining meaningful participation when markets rise.

Neither ETF eliminates risk nor replaces a financial plan created around specific goals and timelines.

But both offer a way to stay invested with more clarity about what's protected and possible rather than an all-or-nothing approach to market risk.

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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.

You’ve spent 30 or 40 years mastering the art of saving; it's now time to master the art of spending. You built the budget, made the trade-offs and watched your nest egg grow. But now that you’ve reached the finish line, turning off "saving mode" can feel surprisingly unnatural.

If the thought of spending down your hard-earned portfolio causes a pang of anxiety, you aren't alone — in fact, most retirees spend far less than they safely can, shortchanging the very lifestyle they sacrificed to build.

This 10-question quiz is designed to help you identify the subtle psychological traps that keep retirees in perpetual saving mode. Take a few minutes to test your knowledge, unpack the financial mindset holding you back, and learn how to spend with confidence. You earned this life — it’s time to enjoy it.

Follow the links below to learn more about safely spending in retirement without guilt.

More on overcoming the fear of spending:

• The Average Retirement Withdrawal Rate by Age
• Are You a Retirement Millionaire Too Afraid to Spend?
• Master the Art of Spending in Retirement
• The 'Permission to Spend' Rules of Retirement Spending
• Average IRA Balance by Age and Generation
• The 'Die With Zero' Rule of Retirement

I'll start with what you already know: Index funds, with portfolios determined by computer algorithms to reflect categories of stocks and bonds, have a much better track record than funds whose stocks and bonds are selected by human beings — so-called actively managed funds.

Over the 10 years ending December 31, 2025, research firm Morningstar calculates, only 3.6% of active large-capitalization growth funds have beaten the average index fund in the same category.

I enthusiastically endorsed index funds in the 1999 book I coauthored, Dow 36,000, and I have advocated them ever since.

Investors have caught on. In 2010, index securities held just 19% of the total assets in mutual funds and exchange-traded funds (ETFs); at the end of 2025, the figure was 52%. For funds that own U.S. stocks, index funds now hold 63% of assets.

Index funds took off after Vanguard aggressively cut fees and other fund houses followed suit. The Vanguard S&P 500 ETF (VOO), with $1.7 trillion in assets, has an expense ratio of just 0.03%, or $30 a year for a $100,000 investment. The iShares Core S&P 500 ETF (IVV) levies the same fee, and mutual fund Fidelity 500 Index (FXAIX) charges just 0.015%. That compares with about 1%, on average, for managed funds, according to the Investment Company Institute (PDF). (Prices, returns and other data are through June 30 unless otherwise noted; stocks and funds I like are in bold.)

So why not join the crowd? Is there a reason to own actively managed funds? Yes — two.

The first is that an index fund, by definition, will never beat its index after expenses. An active fund has a shot. Second, choosing an active fund and rooting it on is one of the thrills of investing.

In search of the best actively managed fund

Some mutual funds do beat the indexes. In 1996, I set out to find America's best mutual fund. I was seeking a diversified U.S. large-company stock fund with great long-term returns, comfortable risk levels, a decent expense ratio and strong prospects.

My choice then is my choice today: Fidelity Contrafund (FCNTX), which has returned an annual average of 18.2% over the past 10 years, compared with 15.5% for the S&P 500 index. Contrafund has beaten a majority of funds (including index funds) in its category for five calendar years in a row and so far in 2026.

The fund may have started with a contrarian bent, as the name implies, but it's now a large-cap growth fund. Will Danoff, who has managed or co-managed Contrafund for 36 years, has the courage of his convictions. He'll retire at the end of the year, but I'm optimistic about the two veteran Fidelity managers who will succeed him, and the firm has a deep bench of analysts.

Contrafund first added Nvidia (NVDA) to its portfolio in 2016, and it's now the fund's top asset. Danoff bought Alphabet (GOOGL) in 2004 when it went public. Lately, he has been trimming technology stocks, especially Meta Platforms (META) and Microsoft (MSFT), and the sector represents a smaller proportion of Contrafund's portfolio than it does of the S&P 500.

Contrafund has whipped the index while charging expenses of 0.74%, which is more than 20 times what Vanguard's S&P 500 ETF charges but still relatively low for an actively managed fund. (Funds with people doing the picking are more expensive to run than index funds — after all, computers don't need health insurance.)

If you believe that stocks are priced efficiently — the price of a stock being a reflection of everything that's known today about a company's future prospects — then beating the performance of a market index is undoubtedly difficult. Throw in the expense differential, and active managers would seem to have an impossible task.

Also, when a fund does beat the index, it could be luck. In an experiment, S&P Global, a major compiler of indexes, found that 336 actively managed funds were in the top half of a universe of more than 1,000 funds after a year. But after two years, just 81 of those active funds were still in the top half; after four years, 43.

A rich legacy for active funds

How do you find the favored few? I look for managers who have a long track record, a taste for bucking the market, and the bravery to buy and hold. It's true that many of the great managers of yesteryear are gone, but in some cases their funds and investing strategies live on.

Take Philip Carret, who founded the Pioneer Fund in 1928 and ran it through his retirement in 1983. Carret, a bargain hunter, died in 2003 at age 101, but his fund today, now called Victory Pioneer (PIODX), has beaten Morningstar's large-cap blend benchmark (a mix of growth and value stocks) in a majority of the past 10 years and so far in 2026. The fund comes with a sales charge, but you can find it load-free at Schwab, E*Trade and perhaps other platforms. The expense ratio is 0.92%.

The fund has lately been adding to its holdings of United Parcel Service (UPS), one of the components of my Top 30, and NRG Energy (NRG), a Houston-based fossil-fuel and renewables power company whose shares have nearly quadrupled in five years as demand for electricity has taken off.

I have always liked mutual funds named and managed by their founders. Upholding a family reputation is good discipline. Many of these are now run by family members. A good example is Davis New York Venture (NYVTX), co-managed by Christopher Cullom Davis, who took over from his founding father, Shelby, in 1995. You can find it load-free at Fidelity, Schwab and E*Trade; the expense ratio is 0.91%.

The fund has ranked in the top half of its peer group (currently large-cap value funds) in seven of the past 10 years, outpacing the S&P 500 Value Index by 1.4 percentage points annualized over the past decade.

The Davis fund is light on technology and heavy on financial services, including its top holding, Capital One Financial (COF), which specializes in credit cards, both under its own brand and that of several leading retailers. Research firm Value Line forecasts the stock's earnings will rise by an average of 13.5% annually for the next five years.

With his son Michael, founder Ron Baron still co-manages Baron Partners (BPTRX), which has had a spectacular decade, beating the S&P 500 by an annual average of more than nine points, again despite high fees. The portfolio is highly concentrated: just 23 stocks, with Tesla (TSLA) the top holding at nearly one-fourth of assets. But that kind of conviction is how a manger beats an index.

Similarly, Baron Focused Growth (BFGFX), also managed by father and son, is in the top 2% of its category (mid-cap growth), returning an annual average of 21.5% over 10 years.

Want more evidence that stock pickers can whip computers? Look to small-cap funds. Both Oberweis Small-Cap Opportunities (OBSOX), another fund managed by a member of the founding family, and T. Rowe Price Small-Cap Value (PRSVX), managed by J. David Wagner for the past 12 years, have been beating their respective target indexes.

So have three funds that are currently closed to new investors but may reopen, so keep an eye on them: Harbor Small-Cap Growth (HISGX); Invesco Discovery (OPOCX), which has returned nearly 39% so far in 2026; and Fidelity Small-Cap Growth (FCPGX), in the top half of its category for nine of the past 10 years.

Of course, you should own index funds, but owning funds managed by smart people is not as crazy as many investors think. The legendary John Bogle, the late Vanguard CEO, called such investing akin to a second marriage: the triumph of hope over experience. Actually, many second marriages do work out — and so do managed funds.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns none of the securities mentioned here. You can reach him at JKGlassman@gmail.com.

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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In July, Morningstar published a column, "These 15 Funds Cost Investors Billions Over the Last Decade." The list was revealing. Many of the biggest wealth destroyers were inverse ETFs, products designed to deliver one, two or three times the inverse daily return of a market benchmark.

Among the funds highlighted were ETFs betting against semiconductor stocks, the S&P 500 and the Nasdaq-100, often with leverage. Given the strong performance of U.S. equities over much of the past decade, these strategies proved costly for investors.

Also appearing on the list were leveraged long ETFs tied to particularly volatile non-equity assets. Products seeking to triple the daily return of long-term 20-year U.S. Treasury bonds and natural gas futures struggled as their underlying markets performed poorly, with the effects of daily leverage compounding further eroding long-term returns.

The list also included several thematic ETFs. Unlike broad market index funds, thematic ETFs focus on a narrow investment idea or emerging trend that cuts across industries. Morningstar's list included funds concentrated in Chinese internet companies, as well as two innovation-focused ETFs from ARK Invest.

While every investment carries risk, the list also highlights several characteristics that investors may wish to avoid when building long-term wealth.

Many of the funds charged relatively high fees, concentrated their holdings in a small number of stocks or sectors or relied on leverage and derivatives such as options that were designed for short-term trading rather than long-term compounding.

Finding ETFs with a greater likelihood of building wealth over time can therefore be as much about avoiding these characteristics as identifying attractive investments.

What does it mean to build wealth over the long term?

For most investors, the best chance of building wealth over the long term is by owning equities. The reason is the equity risk premium, the additional return that stocks have historically delivered over lower-risk assets such as Treasury bonds and cash.

Share prices fluctuate, recessions occur and companies can fail. Investors are compensated for accepting those risks over long periods.

More importantly, however, the stock market represents ownership in thousands of companies.

Collectively, those businesses strive to sell more products and services to more customers, expand into new markets, improve productivity and earn higher profits.

When you're a shareholder, those profits accrue to you in several ways. Companies can repurchase their own shares, and a stock buyback increases your proportional ownership.

They can distribute profits as dividends, reinvest in new projects, acquire other businesses, reduce debt or simply accumulate cash to strengthen their balance sheets for future opportunities or economic downturns.

This only works consistently, however, if you are sufficiently diversified. A well-diversified portfolio should own companies from countries around the world, represent all 11 sectors recognized by S&P Global and include large, medium and small businesses.

Diversification reduces the impact that any one company, industry or country can have on your long-term outcome.

Even so, investors should remember that the equity risk premium is not earned every year, or even every decade.

There have been extended periods, such as from 1999 through 2009, when stocks underperformed bonds and, after accounting for inflation, generated disappointing real returns.

Building wealth through equities is rarely a straight line. It's a process of compounding over many years rather than getting rich quickly.

How to use ETFs to build wealth over the long term

Simply staying invested in equities is only half of the journey. The remaining portion comes down to a handful of good investing habits.

First, keep fees as low as possible. Every dollar paid in management fees is one less dollar left to compound over time. Even seemingly small differences in expense ratios can have a meaningful impact when compounded over decades.

Second, reinvest your dividends whenever possible. Dividends have historically accounted for a significant portion of total equity returns. Reinvesting those cash payments allows you to purchase additional shares, which in turn generate future dividends of their own, creating a compounding snowball effect.

Third, pay attention to taxes. Dividend distributions received in taxable accounts generally create taxable income, and selling ETF shares can trigger capital gains taxes.

Whenever possible, investors should take advantage of tax-advantaged accounts for long-term investments. In taxable accounts, avoid unnecessary trading and allow capital gains to remain unrealized.

Finally, low costs, broad diversification, ample liquidity and disciplined portfolio construction have historically stacked the odds more favorably for investors.

Based on these factors, here are five ETFs that stand out for their ability to build wealth over the long term.

Vanguard Total World Stock ETF

• Inception date: June 2008
• Expense ratio: 0.06%
• Assets under management: $77.6 billion
• 30-day median bid-ask spread: 0.01%

If building wealth over the long term is largely about capturing global economic growth, then few ETFs accomplish that as comprehensively as the Vanguard Total World Stock ETF (VT).

Rather than attempting to identify the next winning country, sector or stock, the VT simply owns nearly the entire investable global stock market. That removes many of the active decisions investors often get wrong.

The ETF tracks the FTSE Global All Cap Index, providing exposure to more than 10,000 stocks across the U.S., developed international markets and emerging market economies.

The portfolio spans all 11 sectors and includes large-cap stocks, as well as mid caps and small-caps. Each holding is weighted by market cap, allowing the market itself to determine how much each company should represent.

Despite this enormous portfolio, VT is remarkably inexpensive. Its expense ratio is just 0.06%, meaning a $10,000 investment costs approximately $6 annually in fund expenses.

The strategy is also highly efficient. Because VT already owns virtually the entire investable global equity universe, relatively few securities need to be added or removed from the index each year. Portfolio turnover is just 3.4%, reducing unnecessary trading within the fund.

Geographic composition also evolves automatically. Approximately 62% of assets are invested in U.S. companies, reflecting the strong performance of the U.S. stock market over recent decades.

However, those allocations are not fixed. If another region, whether China, India, Europe or another market, grows to represent a larger share of global equity market capitalization, VT will naturally increase its exposure over time without requiring investors to make any tactical allocation decisions.

For long-term VT investors, the job is refreshingly simple: Contribute regularly, reinvest distributions and stay the course while the ETF continuously adapts to changes in the global economy. Over the last 10 years, VT has delivered a 12.8% annualized total return before taxes.

Learn more about VT at the Vanguard provider site.

State Street SPDR Portfolio MSCI Global Stock Market ETF

• Inception date: February 2012
• Expense ratio: 0.08%
• Assets under management: $1.7 billion
• 30-day median bid-ask spread: 0.11%

On paper, the State Street SPDR Portfolio MSCI Global Stock Market ETF (SPGM) is somewhat less compelling than VT. It has a shorter operating history, significantly fewer assets under management, a slightly higher expense ratio and a wider bid-ask spread, making it somewhat more expensive to trade.

For investors simply looking for a single global equity ETF, VT generally has the edge. That said, long-term investors, including those who already own VT, may still find SPGM worth keeping on their watch list. The primary reason is tax-loss harvesting.

During a market downturn, an investor holding VT in a taxable brokerage account may choose to sell shares at a loss, realizing a capital loss that can be used to offset capital gains and, if unused, carried forward to future tax years. proceeds can then be reinvested into SPGM without sitting 30 days on the sidelines.

This approach may also avoid the IRS wash sale rule because, despite their similar investment objectives, the two ETFs track different underlying indexes. VT follows the FTSE Global All Cap Index, while SPGM tracks the MSCI ACWI Investable Market Index.

Although the portfolios have substantial overlap, they are based on different benchmark methodologies and therefore may not be considered "substantially identical" under current IRS guidance.

Investors with questions about their specific circumstances should consult a qualified tax professional or financial adviser before implementing a tax-loss harvesting strategy.

Learn more about SPGM at the SPDR provider site.

iShares MSCI World ETF

• Inception date: January 2012
• Expense ratio: 0.24%
• Assets under management: $7.9 billion
• 30-day median bid-ask spread: 0.07%

It's important to remember that the definition of the "world stock market" depends on the benchmark an ETF tracks. Some global indexes include small-cap stocks, while others do not. Likewise, some include emerging markets, whereas others are limited exclusively to developed economies.

Over long investment horizons, these differences can produce meaningfully different results. The reason these benchmarks coexist is that investors have different preferences.

When it comes to global diversification, some investors are hesitant to own emerging markets such as China, India and Brazil. Common concerns include higher volatility, geopolitical tensions, regulatory uncertainty and currency risk.

Whether those concerns ultimately prove justified is less important than choosing an investment strategy you can stick with through both good and bad markets.

If exposure to emerging markets is likely to cause you to abandon a globally diversified portfolio during periods of underperformance, a developed-markets-only approach may be the more practical choice.

The iShares MSCI World ETF (URTH) represents one such compromise. URTH tracks the MSCI World Index, which provides exposure to the U.S., Canada and other developed economies, including Japan, the UK, France, Switzerland, Germany, Australia and the Netherlands.

Compared with VT, the portfolio is less diversified, holding roughly 1,200 large- and mid-cap stocks.

This approach has worked in investors' favor over the past decade. Maintaining a heavier allocation to U.S. equities helped generate a 10-year annualized total return of 13.4%, outperforming VT despite charging a meaningfully higher expense ratio.

Learn more about URTH at the iShares provider site.

Dimensional World Equity ETF

• Inception date: September 2023
• Expense ratio: 0.24%
• Assets under management: $1.6 billion
• 30-day median bid-ask spread: 0.11%

Index investing has earned its reputation for a reason. By tracking a benchmark rather than attempting to outguess the market, index ETFs typically offer low fees, broad diversification and excellent tax efficiency. But active ETFs have closed much of that gap.

The Dimensional World Equity ETF (DFAW) is a good example. Despite its relatively short track record, the ETF is managed by Dimensional Fund Advisors, a firm with decades of experience in factor-based investing.

Rather than weighting companies purely by market cap, factor investing systematically emphasizes characteristics that academic research has historically associated with higher expected returns. In Dimensional's case, that means tilting the portfolio toward smaller companies, value stocks and higher profitability.

DFAW is not an actively managed ETF in the traditional stock-picking sense. Dimensional uses its own quantitative models to determine which securities to own and when to rebalance them.

The firm applies its own rules-based process with the goal of retaining many of the benefits of indexing, including diversification, transparency and relatively low turnover.

Its approach seeks to avoid drawbacks of traditional indexes, such as predictable reconstitutions that can invite front-running and concentration that naturally develops in market cap-weighted benchmarks. The ETF is also competitively priced, charging a 0.24% expense ratio, identical to URTH.

While its live performance history is understandably limited following its 2023 launch, DFAW has gotten off to a strong start. For the one-year period ending June 30, the fund generated a total return of 25.3%, outperforming the MSCI All Country World Investable Market Index's return of 24.2%.

Learn more about DFAW at the Dimensional provider site.

Avantis All Equity Markets ETF

• Inception date: September 2022
• Expense ratio: 0.23%
• Assets under management: $1.1 billion
• 30-day median bid-ask spread: 0.11%

One potential risk of active management is style drift. An ETF's investment approach can gradually evolve as portfolio managers leave the firm or the quantitative models underlying the strategy are updated.

Over time, these changes can result in a portfolio that differs meaningfully from what investors originally purchased, with corresponding effects on long-term performance.

The best defense against style drift is staying informed. Investors should periodically review a fund's prospectus, manager commentaries and shareholder reports to ensure the ETF continues to follow the investment philosophy they originally intended to own.

Another practical approach is to diversify across multiple active managers rather than rely on a single firm's process. Competing directly with Dimensional in this space is Avantis Investors.

Like Dimensional, Avantis employs a transparent, quantitative active investment process designed to preserve many of the advantages of indexing, including diversification, low turnover and transparency. The strategy also tilts toward many of the same factors, notably value, size and profitability.

The Avantis All Equity Markets ETF (AVGE) is Avantis' global equity offering, and it's constructed as a fund of funds. Its expense ratio is comparable to DFAW, making it another competitively priced option for investors seeking an actively managed global portfolio.

For the three-year period ending June 30, AVGE delivered an annualized total return of 20.4%, outperforming the MSCI All Country World Investable Market Index, which returned 19.5% annualized over the same period.

Learn more about AVGE at the Avantis provider site.

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Digital payments refer to any transactions where money moves electronically rather than in cash. That means credit and debit cards, online bank transfers, e-wallets and mobile payments, such as Apple Pay and Google Pay, as well as Buy Now, Pay Later (BNPL) plans.

Charge cards emerged in the 1950s, followed by mass‑market credit cards in the 1960s and 1970s, and e-commerce in the late 1990s. But cashless payments have become standard over the past decade, since smartphones and contactless cards turned payments into taps.

Here's the problem: When the way we pay changes, the way we think about spending changes, too. And that shift can affect our budgets and long-term financial goals.

The psychology behind spending For decades, paying with cash created a natural pause. You took out your wallet, counted bills, felt them leave your hand and saw the remaining stack of cash get thinner. That small moment activated a real sense of loss and served as a natural check on spending.

Making digital payments with apps such as Venmo and Zelle smooths that friction away. Spending decisions happen faster and with far less thought.

As our spending has moved from bills and coins to cards and phones, we've lost some of those guardrails. The transaction is the same on paper, but it doesn't register in the same way in our minds.

How digital payments make spending feel less real

Cash has weight and texture. Digital money doesn't. That missing weight can quietly change our choices.

Not touching money severs a sensory link between cost and purchase. Without the visual of a thinning wallet, it's easier to misjudge how quickly small buys add up.

Online retailers' checkout flows are designed for near-zero friction. Stored cards, one-click buttons, autofill shipping and express wallets move you from want to "order placed" in seconds.

The design of digital checkouts drives impulse purchases. Convenience is deliberately engineered to keep transactions effortless.

Every tap and swipe is built to eliminate hesitation. The easier they make it to pay, the less time you spend weighing whether you actually need something. That speed is exactly what turns a passing want into a completed sale.

You can see the flip side in ecommerce data: Slow checkouts are the number-one reason shoppers bail, according to research from Baymard, with average cart abandonment hovering around 70%. Businesses remove friction because it works.

With cash, you see less money in your hand. With digital, you see a number in an app sometime later. Autopay and BNPL plans can further blur the picture, spreading the cost out and moving it away from the moment of purchase. In that way, the spending is real… but the sensation is faint.

What this means for your money

When purchases feel easier, two things often follow: Spending creeps up and awareness drifts down. That's a tough combination for any household budget.

You can see the pattern in newer payment forms, too. BNPL options split a single cost into multiple future payments, keeping the initial checkout total low.

Research from the Consumer Financial Protection Bureau (CFPB) highlights the rapid adoption of BNPL. The CFPB has also raised concerns about late fees and the risk of juggling multiple payment schedules.

The frictionless nature of digital payments can quietly erode savings. That's why consumers should reintroduce intentional pauses into their spending. The biggest danger isn't a single large purchase. It's the steady stream of small transactions that add up unnoticed.

Practical ways to make digital spending more visible:

• Turn on real‑time transaction alerts for every card and account
• Remove stored cards from browsers
• Use category caps and alerts in your budgeting app
• Adopt a 24‑hour rule for non-essential online purchases

These small moves help create a clearer picture of your spending. And they help keep your longer-term goals in focus, whether that's paying off debt or building up your emergency fund.

The role of financial institutions and tech providers

Banks and fintechs helped make spending seamless. They can just as easily help make it understandable, starting with better defaults for users, such as real‑time push notifications on your smartphone that alert you to spending, or the option to set custom spending limits by merchant or category.

Subscription management tools that spot and surface recurring charges can help keep money on autopilot without it slipping out of view. And for higher-risk features, such as tap-to-pay without strong authentication or instant credit at checkout, providers can offer opt-in speed bumps and clearer disclosures.

Ultimately, the goal isn't to add friction for the sake of it, but to give users the visibility they need to stay in control.

The bottom line

Digital payments are here to stay because they're fast and wildly convenient. However, they also make spending feel less real. Lower payment friction dulls the "pain of paying" and can nudge us toward buying more than we mean to.

As payments keep evolving, the need for personal guardrails will only grow. Take a few minutes this week to turn on smartphone alerts or add a couple of speed bumps that slow down your spending.

Small moves make digital payments feel real again. And that will help keep your financial plan on track in a world where paying gets easier every year.

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

It was another record-setting session for stocks Tuesday as Wall Street cheered the latest round of earnings reports. A big bounce for chip stocks and hope on the geopolitical front also fueled the day's upside.

At the close, the blue-chip Dow Jones Industrial Average was up 1.7% at 54,085 and the broader S&P 500 was 1.8% higher at 7,736 — new record closes — while the tech-heavy Nasdaq Composite had gained 2.6% to 26,584.

"Optimism about an imminent reopening of the Strait of Hormuz, combined with upbeat corporate earnings, has stocks soaring to fresh records," explains José Torres, senior economist at Interactive Brokers.

Torres cites comments from Treasury Secretary Scott Bessent, who told CNBC that the U.S. and Iran could reach a deal to open the strait as soon as today.

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.

This sent front-month West Texas Intermediate crude futures down 5.7% to $75.77 per barrel, while yields on 2-year (-6.2 basis points to 4.194%), 10-year (-7.3 basis points to 4.612%) and 30-year (-5.9 basis points to 5.17%) Treasuries also declined.

Bessent's remarks drove "crude prices and interest rates south as market participants adjust their oil supply outlooks upward while reducing inflation expectations and Fed rate-hike probabilities, reflecting a greater likelihood of softening cost pressures from restored traffic through the passage," says Torres.

Palantir stock soars after "otherworldly" earnings

Earnings were also a hot topic on Tuesday, with several stocks soaring in the wake of their results.

Palantir Technologies (PLTR), for one, climbed 29.5% — easily making it the day's best S&P 500 stock — after the data analytics platform said second-quarter revenue surged 93% year over year to $1.94 billion, while earnings more than doubled to 41 cents per share.

"This quarter was otherworldly," said Palantir co-founder and CEO Alex Karp. "Demand for AI sovereignty has now been unleashed."

The company also gave higher-than-expected third-quarter guidance and raised its full-year forecast.

"We view the strengthening Palantir results as a reflection of a successful AI strategy that focuses on providing the right infrastructure to maximize its customers' results," says BofA Securities analyst Mariana Perez Mora. "PLTR's sovereign AI approach levers on decades of experience working on national security and highly regulated missions to create the right control layer."

The analyst has a Buy rating and $255 price target on PLTR, almost 60% above where the AI stock is trading.

The earnings calendar stays busy, too, with Advanced Micro Devices (AMD) set to report after tonight's close. The chipmaker joined its peers in a broad rally today, climbing 7.0%.

Bezos unloads $4.1 billion in Amazon shares

One blue chip stock that sat out the day's surge was Amazon (AMZN), which fell 2.3% on news that founder and former CEO Jeff Bezos is selling 15 million shares worth roughly $4.1 billion.

A Securities and Exchange Commission (SEC) filing disclosed the sale, originally scheduled on November 14, 2025, under a Rule 10b5-1 plan that prevents insider trading.

Bezos' timing is impeccable, though. Amazon shares jumped more than 15% last Friday on strong earnings and hit a record high on Monday. They're also up 20% for the year to date.

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With economic uncertainty spreading across the country, Americans are finding it difficult to keep up.

If an unexpected expense arises, they feel even more financially vulnerable, with 29% of Americans having more credit card debt than they have in savings and nearly one in four having no savings at all.

This is why it's becoming increasingly important to have money set aside for emergencies. The peace of mind that comes with planning and being prepared for surprise expenses can't be overlooked.

While the costs of goods continue to rise and credit card debt has hit record highs, there are three things we can do to be prepared for unexpected expenses in the future.

1. Start small

Between putting money aside for retirement and making sure you have enough for everyday expenses, it might seem as if you can't afford to invest in an emergency fund.

One of the biggest mistakes people can make with their emergency funds is to start out believing they need thousands of dollars set in it. This isn't feasible or necessary.

The truth is that every emergency fund begins and is useful with that first deposit.

Financial security isn't about suddenly having thousands of dollars on hand; it's investing in the habit of slowly increasing your funds over time. Even something as simple as a few hundred dollars set aside can cover common financial expenses like a minor car repair, a broken appliance or a higher-than-normal utility bill.

If you find yourself stuck with one of these emergencies and you don't have any money to cover them, these expenses could often end up on a credit card. This leads to debt that will stay around much longer than the emergency itself.

Never underestimate the importance of the first deposit into your emergency fund. It's a crucial step in creating a financial habit that will protect your future self.

2. Automate your savings

The easiest way to save money is to not be tempted to spend it. While you're stressed about paying for everyday expenses and investing money into your retirement, saving anything extra often gets forgotten. This is why automating your savings can be such a powerful tool.

Don't start your savings habit by setting aside whatever funds you have left over at the end of each month, because many times, there is often nothing or very little left.

Making things automatic creates a set-it-and-forget-it mindset where you save first and spend what's left. When you schedule this automatic transfer every month, you are telling yourself that this emergency savings account is a priority instead of an option.

One of the most overlooked benefits of automatic transfers is that you are removing the emotional side of it. It is likely that every month will bring a temptation to buy yourself something.

Maybe you've had your eye on a new TV or a band you have been wanting to see is coming into town. If you look at your account and see "extra" funds, it appears you can afford to spend the extra money, when in reality, you can't.

If it goes into your savings accounts as soon as your paycheck hits, your spending decision has been made for you.

Many of my clients have found that once money is transferred automatically, their spending habits begin to adapt to this normal remaining balance.

3. Invest in a high-yield account

While it's best to keep your emergency fund in an easily accessible account without withdrawal penalties, that doesn't mean that you can't still earn interest on your funds.

While traditional savings accounts can be a good place to start, this might be an opportunity to research high-yield savings accounts. Look for accounts that offer high interest rates, such as a money market account or an online savings account.

Traditional savings accounts generally offer rates from 0.01% to 0.02%, while high-yield accounts pay higher than 4%, with some rates higher than 5%. That means if you deposit $10,000, you'll have an additional $500 in one year without doing anything else.

Unlike the investments that you might have for retirement, where there are taxes or penalties for early withdrawals, funds in high-yield savings accounts are generally available immediately when you need them. If there are a few months when you aren't able to actively contribute to the account, the money in it is still growing.

While the interest alone isn't going to help cover all of your emergencies right away, they provide that extra boost that requires no effort from you.

When you start your emergency fund, instead of focusing on a goal that could be years or months away, concentrate on achieving smaller objectives. Break it down into smaller amounts that don't seem too overwhelming.

• Goal No. 1: Save $200
• Goal No. 2: Save $400 more
• Goal No. 3: Save $800 more
• Long-term goal: Save three to six months' worth of expenses

While it might be easy to do, don't start comparing yourself with others. Everyone is at a different stage in their savings journey.

People who are considered in a positive financial situation didn't get there through big, dramatic changes. It often starts with small actions that quickly become common habits.

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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.

New York City’s new tax on high-value second homes is moving from the policy stage to enforcement. But the first challenge involves determining which property owners actually owe it.

The pied-à-terre tax was approved as part of the state budget signed into law in May 2026 and applies to certain non-primary residences in NYC beginning the 2026-2027 property tax year.

But as the city begins implementing the new levy, some homeowners are questioning why they received notices indicating their properties might be subject to the tax.

In response to the confusion, the Department of Finance extended the deadline to apply for a pied-a-terre tax exemption until Sept. 18, 2026. The move is designed to give property owners more time to review their notices and provide documentation showing why the tax shouldn't apply.

"We are announcing the extension of the exemption application deadline to ensure that New Yorkers who received the ‘You may be subject to...’ letters have the time and information they need," New York City Mayor Zohran Mamdani said in a statement.

The administration has said the goal is to ensure that residents who shouldn't owe the tax have an opportunity to establish their exemption eligibility.

So, how does New York City’s pied-à-terre tax work and who's actually affected?

NYC Pied-à-Terre Tax exemption deadline extended

NYC’s pied-à-terre tax is a surcharge on certain residential properties that are not used as an owner’s primary residence.

The measure is designed to raise revenue from high-value homes and apartments maintained as second residences, particularly those owned by people who live elsewhere.

Mamdani has described the tax, which is expected to generate about $500 million annually, as "an important new tool to help our city collect the revenue we need for safer streets, cleaner parks, and other critical investments across the five boroughs."

Some key points:

• The new law, which took effect July 1, 2026, applies during the 2026–27 (phase-one) and 2027–28 property tax years.
• The levy applies to certain non-primary residences. That includes one-, two- and three-family homes, condominiums and cooperative units, based on property type and market value.

• One-, two- and three-family homes are subject to the surcharge if the property has a market value of $5 million or more. Condominium and cooperative units are subject to the surcharge if the unit has a market value of $1 million or more.
• Properties used as a primary residence by the owner or an immediate family member are exempt. Properties leased for at least one year as a primary residence may also qualify for an exemption.

It's important to note that the surcharge is not part of a homeowner’s regular property tax bill. Instead, it creates an additional tax obligation for qualifying non-primary residences that meet the applicable value threshold and don't qualify for an exemption.

How much is the tax? The amount a homeowner could owe will depend on the property’s standardized fair market or assessed value and the applicable surcharge rules.

Class 1 (one-, two-, and three-family homes)

• $5 million to $15 million: 0.8%
• More than $15 million to $25 million: 1.05%
• More than $25 million: 1.3%

Condominiums and co-ops (FY 2026-27 and FY 2027-28)

• $1 million to $3 million (Phase One Market Value): 4.0%
• More than $3 million to $5 million (Phase One Market Value): 5.25%
• More than $5 million (Phase One Market Value): 6.5%

Which homeowners actually owe the tax

As the city began implementing the new levy, confusion has emerged over which properties might be subject to it.

• On July 24, the Department of Finance published a list of more than 900,000 properties, prompting some homeowners to question why their homes appeared on the list.
• The city later added a disclaimer clarifying that inclusion on that larger list didn't necessarily mean a property was subject to the pied-à-terre tax.

The city's Department of Finance has since reportedly sent notices to about 17,000 property owners who may be affected by the new surcharge. (That number was larger than the state’s earlier estimate of roughly 10,000 to 13,000 affected non-primary residences, which has raised questions about how many properties will ultimately qualify once exemptions are reviewed.)

Some homeowners are reportedly concerned about the notices they received.

For example, a Brooklyn homeowner told The Wall Street Journal that he received a notice indicating a potential $44,048 surcharge, despite stating that the property was his primary residence. The Gothamist reported on another New York resident who said she would owe close to $43,000 in tax without an exemption for a property she says has always been her primary address.

Those types of disputes highlight why implementation could prove difficult. The city is not only identifying valuable properties — it's trying to determine how those properties are actually used.

Under NYC law, the surcharge generally applies to qualifying properties that are not used as a primary residence. The Department of Finance determines primary residency based on legal factors, including whether the property is occupied for a majority of days during the calendar year by a covered owner.

But…in some cases, that determination may require more than a review of ownership records.

• A property deed may show who owns a home, but it doesn't necessarily establish how the property is used
• Properties held through trusts, limited liability companies, or other ownership structures may require additional review
• The city may request documentation related to residency, occupancy, ownership details, or other information relevant to an exemption

For homeowners who received notices, a key challenge could be showing their property doesn't meet the criteria for the surcharge.

What NYC homeowners need to know

Keep in mind: Receiving a notice does not automatically mean a homeowner owes NYC’s second-home tax. Instead, it means the property has been identified as potentially subject to the new rules and the owner may need to submit information showing why an exemption applies.

City officials have said that homeowners who believe their properties shouldn't be taxed under the measure should complete the exemption application by Sept. 18, 2026.

The documentation required will depend on each homeowner’s circumstances. The Department of Finance has a webpage that includes frequently asked questions, an eligibility tool, and instructions for submitting documentation.

And since every homeowner's situation is different, you may want to consult a trusted tax professional who can help you determine whether your property qualifies for an exemption.

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Retirement is supposed to be carefree and financially predictable, but that doesn't mean you're exempt from recurring bills. That's particularly true if you own a home. Everything from maintenance to insurance comes at a cost. How you pay those bills — all at once or over time — can have a big impact on your savings and cash flow.

The secret to saving money is timing. Some annual expenses offer discounts if you lock them in early, while others are best kept flexible so you can shop around or keep your money earning interest.

To help you figure it out, here are four everyday bills you should wait to pay to save some serious cash.

4 bills retirees should not prepay

1. Heating oil

For retirees who value predictability, locking in heating oil rates ahead of winter provides peace of mind amid volatile energy markets, but they typically pay extra for that relief.

A fixed-rate plan locks in your price for the entire season, protecting you from cold-weather price spikes. But you won't benefit if market prices drop. A capped-price plan sets a ceiling and lets you pay lower rates if prices fall, but dealers usually charge an upfront protection fee for that option.

The cheapest option, according to nonprofit consumer energy groups and state agencies, is a floating-rate plan. With that, you pay the current market rate and that's it. Over multiple years, those savings can add up.

2. Electricity

Just like heating oil, you can lock in your electricity rate for the year, but doing so can cost you if electricity rates decline.

Plus, you have to be careful of the fine print when signing up for a fixed-rate electricity contract. Some may have early termination fees, monthly recurring charges, and promotional rates that spike once the initial period expires.

3. Auto and homeowners insurance

Who doesn't love the convenience of auto-renewal for auto and homeowners insurance? It's one less thing to worry about, and doesn't loyalty always pay? It turns out it's better to shop around each year to ensure you're getting the best rates.

How much can you actually save? According to a LendingTree survey, drivers reported saving at least $100 per year simply by switching auto insurance providers.

Use the Bankrate tool below to connect with auto insurance providers and compare quotes:

4. Home warranty contracts

Home warranty contracts are supposed to protect you from expensive repairs. For a fixed annual fee, you won't have to worry if the furnace dies, a pipe bursts or the AC is on the fritz. Often, you get high service call fees, strict restrictions on what is covered and exclusions hidden deep in the fine print.

Instead of locking up money in a warranty contract that will require you to pay out of pocket anyway, put it in a high-yield savings account where your cash earns interest until it's needed for a repair.

Keep control of your retirement

Cash is king; it couldn't be truer in retirement, which is why patience pays off when it comes to some everyday expenses.

By shopping around annually and keeping your cash accessible in high-yield savings, you'll ensure your money stays liquid and under your control.

Use the Bankrate tool below to search for today's top high-yield savings account offers:

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To help you understand what's going on in business and 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…

No one knows when the Iran war will end. But some of its effects can be predicted, such as the economic effects of disrupted shipping. Here are some impacts you can factor into your own business or investment planning.

Fuel prices will remain relatively elevated, whether the fighting ends soon or goes on. Global petroleum stockpiles are too depleted for gas and diesel to drop sharply whenever exports resume in large quantities from the Persian Gulf region.

Gas prices will range from near $4 to near $5 per gallon, the former if the war winds down soon, the latter if it continues in the coming months. Some analysts warn that stockpiles will hit key levels by Labor Day if the gulf stays largely closed to tankers, which would spike oil prices and push gasoline to $5. If exports resume, we’ll see some relief at the pump, with regular unleaded averaging above $3.50/gallon into the early autumn, still painful for most drivers.

Diesel is sure to stay much higher than gas due to the extensive damage to refineries in Russia, normally a top diesel exporter. Ukraine’s drone strikes on Russian refineries will be a lasting issue for diesel users, whatever happens in Iran.

Other commodities likely to remain costly because of Middle East disruptions:

• Aluminum: 10% of global output came from the Persian Gulf prior to the war. Now, there is a large and growing supply deficit. Users are paying a premium for metal for immediate use vs. in the futures market. Restoring Middle East output will be slow.
• Plastics, namely those used in packaging and electronics: The regional loss of polyethylene exports (10 million tons) is equal to the output of 18 global-scale plants.
• Fertilizers: The prices of which are down from April peaks but above prewar levels.
• Helium: needed for many electronics applications and medical imaging gear.

All of these are materials for which output and shipping are hard to restart. War-damaged plants take time to repair. And unlike oil, which can shift from tankers to pipelines in some cases, these commodities have no quick alternate shipping routes.

These cost pressures pose a dilemma for Federal Reserve policy choices. The Fed normally treats energy-driven inflation as temporary and chooses not to raise interest rates, reasoning that it can’t do anything to ease supply problems.

This time may be different. Inflation is already too high and getting embedded in consumer and business psychology, especially with gas prices in more of a plateau than a brief spike this year. The more people expect high prices to continue, the more their behavior tends to reinforce those expectations. The Fed may feel it has no choice but to try to break that self-stoking cycle by raising rates. If it stands pat, bond traders may bid up long-term bond yields for fear that the Fed isn’t trying to put out the fire.

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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Watching your retirement portfolio take a hit is painful, but it offers an unexpected gift: a discount on your future tax bill. Converting to a Roth IRA during a down market lets you pay taxes on depressed share prices now, turning market losses into years of tax-free growth.

Kiplinger's investing experts expect the second half of 2026 to remain strong. At the same time, there are signs that some asset classes or industries (such as AI) may struggle, which could provide an opportunity for savvy investors to convert holdings that see a significant drop.

The benefits of doing a Roth conversion in a down market

Since the amount you pay in taxes on a Roth conversion is based on the dollar amount you convert, a lower account balance means you’ll pay less to the IRS.

"The tax payment on the conversion is going to be smaller since the account value is lower," says Ben Rizzuto, wealth strategist with the Specialist Consulting Group at Janus Henderson Investors.

When moving a specific position, a smaller account balance doesn't mean the number of shares you convert to a Roth will be lower. In a down market, the value of the stock, mutual fund, or exchange-traded fund (ETF) may be depressed — but you'll still be able to convert the same number of shares.

How a Roth conversion in a down market works

Let's say you planned on converting a traditional IRA balance of $100,000. But the asset you own in the retirement account, say, an AI memory chip maker, suffers a 20% drop, reducing your balance to $80,000. The big decline in the stock price means you'll be able to convert all of your shares to a Roth IRA while only recognizing $80,000 in taxable income.

The depressed shares you convert to a Roth will benefit from an eventual market recovery inside the tax-free Roth wrapper. The upside? The future growth of those converted shares benefits from a longer runway to compound without IRS taxation, compared with a traditional IRA, which is taxed as ordinary income in retirement.

The best time to do a Roth conversion is in a year when not one but two financial forces are working in your favor.

The first, as discussed above, is a market pullback (a drop of 5% to 9.99% from a high), a correction (a 10% to 19.99% drop) or a bear market (a decline of 20% or more). Or, even if the market remains strong, you may be able to take advantage of a price drop in an industry or asset class.

The second is when your taxable income is lower than normal. In years when you report less income, you can convert more dollars to a Roth at a lower tax rate.

"That's a double benefit," says Steven Conners, founder and president of Conners Wealth Management. You end up converting fewer dollars and get taxed at lower rates.

How to decide if this Roth conversion strategy makes sense for you

Financial advisers, however, stress that a big market drop isn't the only factor a retirement saver should consider before doing a Roth conversion. Timing a Roth conversion based on market conditions is akin to trying to time a stock's purchase or sale.

The biggest factor by far when deciding whether to do a Roth conversion is the overall tax impact. Saving some money on taxes by doing a conversion during a down market doesn't necessarily mean doing the conversion is a slam dunk, financial pros say. You must look at the bigger tax picture you face in any given tax year.

A Roth conversion makes the most sense if your current income tax rate is lower than it will be in retirement. The idea is to pay a lower tax rate on the conversion now and pay zero taxes on withdrawals in the future when your tax rate is expected to be higher.

So, if you think your tax rate may be lower in retirement than it is now, you may want to hold off on a conversion even if a down market makes it a more attractive option, says Rizzuto.

Another factor to consider is whether converting a larger dollar amount to a Roth in a down market could result in an income increase large enough to bump you up to a higher — and more costly — tax bracket. That's something you want to avoid, especially if the conversion amount puts you at risk of going from the 22% or 24% tax bracket to the 32% bracket.

"You need to think about how much of a traditional IRA you are going to convert, and whether that conversion will bump you up into a higher tax bracket," says Rizzuto.

One way to dodge a higher tax bracket is to convert only a portion of your traditional IRA in a single tax year. Convert just enough dollars to stay below the higher bracket's threshold, then repeat the process over time. "The conversion can be done piecemeal," says Rizzuto

Once you've determined that the tax aspect of the conversion works in your favor, taking advantage of a down market to do the conversion makes an awful lot of sense, adds Conners.

That's especially true if you own a hard-hit tech stock or other company whose business model and future growth outlook remain intact. As explained above, moving a mispriced asset that’s likely to bounce back into a tax-free Roth account is likely to benefit you over the long haul.

"With a Roth, all your withdrawals will be tax-free, so you're better off from a conversion with a starting point when tech stocks are down 15% to 25% from their highs," says Conners. "That's a much safer spot to buy into something (i.e., a Roth) that's going to give you tax-free benefits down the line."

What to watch out for when following this strategy

Avoid Roth conversions that bump you up into a higher tax bracket. "Talk to your accountant and ask, ‘How much of my traditional IRA can I convert without bumping up my tax bracket?'" says Conners.

Make sure you have free cash to pay the tax bill. You don't want to sell assets from your IRA to pay the tax bill on the conversion, as it reduces the number of shares you can convert into a Roth and benefit from tax-free withdrawals. The goal of a Roth conversion is to move as many shares as possible under the tax-free umbrella to benefit from long-term growth. Remember that using IRA funds to pay the tax bill triggers an additional 10% early withdrawal penalty if the account holder is under 59½.

Avoid generating too much income and paying a Medicare penalty. A Roth IRA conversion increases your taxable income for that year, which can raise your premium two years later due to IRMAA (Income-Related Monthly Adjustment Amount) surcharges on Parts B and D if your modified adjusted gross income (MAGI) tops an income threshold ($109,000 for single filers and $218,000 for joint filers). For this calculation, the IRS looks back at income from two years ago. So, 2026 MAGI will impact 2028 Medicare premiums.

The bottom line? A down market doesn't necessarily mean it's always a good time to do a Roth conversion. But if the tax piece works in your favor, a bear market in stocks is a great time to move traditional retirement assets into a Roth account.

Read More on Roth Conversions and Retirement Investing

• IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
• How to Turn a $1 Million Nest Egg Into a Lifetime Income Machine
• Understanding Roth Conversions: Quiz
• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You

"Kenny" needed to speak with a lawyer — any lawyer — as soon as possible. "I was in a panic, frightened out of my mind of what could happen," he told me during our phone call on a recent Friday evening.

This was the beginning of one of the strangest 30 minutes I've ever spent on the phone with someone in the category of "I need your help now — but I'm not going to give you any information about why."

He not only had a legal problem, but there was an additional reason for his call that had nothing to do with his panic. "I phoned several lawyers' offices, but all of my calls are being filtered by receptionists, who are not very nice and refuse to connect me with an attorney.

"That's why I am calling you. I read your story about the legal aid office manager who illegally placed microphones and cameras throughout the office and recorded confidential, attorney-client conversations."

A real concern

I asked Kenny, "How is that article relevant to your complaint about not being connected with an attorney?"

"They are asking me why I want to talk with the lawyer. They all want me to go into detail about what I am dealing with. That scares me! I do not want to be in the same situation as the clients in your story whose confidential conversations were recorded without their permission."

"Kenny, the receptionist has to find out if your problem is something the firm deals with."

"I don't want to tell the receptionist too much, because they are not the lawyer," he explained.

His concern is real and raises an important question: If you speak with a lawyer's receptionist or paralegal instead of the attorney, is what you tell them protected by the attorney-client privilege?

In many, but not all, instances, the answer is yes.

A cornerstone of our legal system

Everyone has heard of the attorney-client privilege, one of the oldest and most respected principles in the law. It protects confidential communications between a lawyer and their client that relate to the client's reason for seeking legal advice or services.

While there are exceptions — such as asking a lawyer how to get away with a crime — the protection applies to not only verbal discussions but also written correspondence, emails, text messages and other forms of communication.

Obviously, a lawyer cannot provide sound advice without knowing all of the facts — the good, the bad, the ugly. The privilege encourages complete honesty without fear that what the client says will be used against them.

If clients feared their conversations might later be revealed in court, they would withhold information, thereby frustrating justice.

How a law office functions

When you first call a law office, often the person answering the phone will be a receptionist. In addition to setting up appointments, their job is to discover why you are calling — your legal problem or concern — and determine if their office handles such matters.

They also provide the attorney with the information that is needed before the first consultation.

In our office, my paralegal, Anne, will say, "Tell me what's going on. What's the problem, and how can we help you?"

These open-ended questions yield a great deal of information, enabling her to brief me quickly while the caller is on hold.

I then speak with them, further refining the nature of the legal issues to determine if this is something we will handle or can refer to a colleague.

I try to talk with everyone who calls our office, even if we do not deal with their specific legal issue, because I know a lot of lawyers can't be bothered with spending a couple of minutes with someone who is at a low point in their lives.

To me, it is part of the reward and duty to the public of being a lawyer. These conversations often are the basis for my articles.

In most offices, lawyers do not work alone

While there are some solo practitioners — mostly criminal defense attorneys — law offices today are organizations that in many ways resemble teams in which receptionists, intake personnel, secretaries, paralegals, investigators, office managers and translators play vital roles in the delivery of legal services.

This is a practical reality, as no law firm could function if clients could speak only with the attorney.

For that reason, confidential communications with a lawyer's receptionist or other authorized staff member for the purpose of obtaining legal advice are, in most circumstances, protected by the attorney-client privilege.

The lawyer's employees who gather information for the attorney are legally considered agents of the lawyer, and it is as if the client were speaking directly with the attorney.

What a receptionist needs to know

The receptionist should be thought of as a screener, and yes, sometimes their questions may be a bit uncomfortable.

If you're calling about an auto accident, you would be asked to describe what happened:

• What is the name of the other driver?
• When did the accident occur?
• Have you spoken with your or their insurance company and/or another lawyer?
• Did you hire another lawyer and are unhappy with the way they are handling your case?

Answers to these questions impact whether the firm is interested or able to take your case.

A "conflicts check" must be run to see if the firm already represents the other driver. Also, are there any critical time limits, such as statutes of limitations, to worry about?

Present and potential clients are covered by the privilege

It is important to stress that the privilege is not limited to people who actually become clients of the lawyer. Even if you don't hire that firm, your conversation remains confidential.

Clearly, prospective clients deserve protection when they consult a lawyer in good faith for the purpose of getting legal advice. The confidentiality of those communications encourages obtaining advice before making seriously wrong decisions.

When privilege does not apply

These are the times when attorney-client privilege does not apply:

• Non-legal/administrative details. Routine interactions, such as providing your name, asking billing questions or scheduling appointments, are administrative facts, not confidential legal disclosures.
• Conversations in public. Speaking loudly to a receptionist in a crowded waiting room or public lobby, where others can overhear, voids the requirement for privacy.
• Unnecessary third parties. If you share details with a receptionist while unrelated strangers or outside parties are present within earshot, the privilege can be waived.
• Future crimes or fraud. Telling a staff member or attorney about your plans to commit a crime or ongoing fraud strips away confidentiality under the crime-fraud exception.
• No intention to retain. There's no protective relationship if you give casual information to a front-desk worker without any intent to seek formal legal representation or advice.

What was Kenny so worried about?

After explaining all of that to Kenny, I was itching to know what he was so worried about.

He told me, "Some people saw a few things I had on my computer that should not be there, and I am being surveilled."

"Pornography?" I asked.

"Well, I'd prefer not to answer, but you are close," he replied, thanking me for my time and fatefully concluding, "A police car just pulled into my driveway."

Then I heard, "Hands up. Turn around."

And the call was disconnected.

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.

Last month, I proclaimed short (but not ultra-short) maturities as the ideal place along the present fixed-income curve. Is there also an ideal target for yield-seeking stock investors?

This year has been swell for popular dividend funds. Through June 30, for example, the Schwab U.S. Dividend Equity ETF (SCHD) returned 18%, boosted by tech and drug winners. Based on its most recent quarterly distribution, the exchange-traded fund yields 2.7%, which lags utilities, energy partnerships, real estate investment trusts (REITs) and even a fourth of the names in the S&P 500. Perhaps the path to optimizing dividends is simply to concentrate on pipelines, REITs and utilities. But that leaves out a pile of possibilities.

When you benchmark stocks against 4% bank, Treasury and money market rates, 2.7% appears weak. I disagree, given that good stocks appreciate, dividends are not fixed, and the payouts are often tax-qualified, with a maximum 20% tax bite (23.8% for a few rich taxpayers). I would not chase the top of the stock-yield charts, where long-term returns can be awful.

Is there a dividend sweet spot? I set a goal of 10% total return that includes 2.5% (or more) from cash. Here's where I found possibilities:

1. A screen for qualifying companies with rising earnings and cash flow and a reasonable payout ratio.
2. Mutual funds and ETFs that filter dividend payers by a formula designed to provide high risk-adjusted returns.
3. Actively managed dividend funds.
4. A strategy of accumulating individual shares, building a substantial yield on their average cost.

The twist: Enter only at yields of 2.5% or above.

Thoughts on each:

1. Screening quality stocks for yield and return.

If you set a 10% five- or 10-year return target, plus a 2.5% yield hurdle, you lose high-yielding losers like Medtronic (MDT) but green-light an array of energy giants such as Exxon Mobil (XOM) and Chevron (CVX), big banks such as PNC Financial Services (PNC) and Fifth Third Bancorp (FITB), and some defense contractors. These embellish any collection of REITs and utilities without requiring you to spot long shots and turnarounds.

2. Gadget-type dividend funds.

The archetype is the WisdomTree U.S. High Dividend Fund (DHS), whose method is complicated but selects much of what I just described. The monthly dividends are lumpy, but you get more than 3% with low volatility; in the first half of 2026, the fund returned 13.7%.

The ALPS Sector Dividend Dogs ETF (SDOG) has a method utterly unlike that of the WisdomTree fund, but results are comparable; it is up 17% and change. The Fidelity High Dividend ETF (FDVV) is another option, albeit riskier as the ETF includes high-octane fuel such as Nvidia (NVDA) and Alphabet (GOOGL). I would be chary of any new or unproven dividend-filter ETF schemes, but this trio is worthy.

3. Active dividend funds.

Besides the Schwab ETF mentioned above, I suggest the Federated Hermes Strategic Value Dividend Fund A (SVAAX) and its more U.S.-focused ETF cousin, U.S. Strategic Dividend (FDV).

Whether purely active management outdoes the rules-based dividend screeners like those employed by ALPS and WisdomTree is an open question. But you get paid well and distributions per share often rise annually.

4. Buy, hold, collect and grow.

Normally, a dividend-growth plan centers on world-beaters such as Apple (AAPL) and Walmart (WMT) in their early years when they start to pay cash, because you can anticipate a lifetime of generous raises.

I propose a variation: Build fresh positions in 2.5%-and-up payers also known for robust dividend growth. This will be the subject of a future column. Hold the thought.

Jeff Kosnett is editor of Kiplinger Investing for Income. You can reach him at Jeff.Kosnett@futurenet.com.

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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A few months ago, I got a call from a dentist who had been working as an employee for three years.

She was making close to $200,000 a year, had no major complaints about her job and wanted my professional opinion on a crossroads: Should she buy a practice now, or wait a few years until she felt more confident running a small business?

I asked her a different question first. What does waiting cost you?

She didn't know. Almost nobody does, because almost nobody runs the math before they decide to wait. When smart professionals think about buying a business, they evaluate the decision entirely in terms of visible risk:

• The debt
• The staffing responsibilities
• The fear of something going sideways

What gets left out of that calculation is the compounding cost of staying put.

I work exclusively with buyers on the acquisition side of dental practice transitions. My team has advised on more than 1,500 deals across 49 states, and the most expensive mistake I see isn't a bad purchase.

It's a highly capable, well-qualified buyer who waits years longer than the financial numbers support, because waiting feels like the responsible choice.

It isn't.

What the delay costs

The American Dental Association's Health Policy Institute tracks net income for dentists who own their practices vs those who work as employees. Practice owners netted an average of $217,781 in 2024. Associates netted $160,891. That's an annual income gap of roughly $57,000, and it has held steady for years.

To see how that plays out over a career, picture three professionals who start practicing at age 36 and retire at age 65:

• The early buyer buys a practice at 38
• The hesitant buyer waits five years and buys at 43
• The career employee stays an associate for the entire 29-year career

When you model realistic income progressions, business equity and tax structures, the outcomes look very different. By retirement, the early buyer accumulates roughly $10.8 million in cumulative career earnings. The hesitant buyer accumulates $9.7 million. The career employee finishes around $6 million.

That's a $1.1 million penalty for a five-year delay, and a $4.8 million gap between buying early and never buying at all. Every year a capable buyer waits is a year of wealth compounding they can't recover.

The number most people miss in this calculation is the financial inflection point. A business owner's income jumps sharply once the initial acquisition loan is paid off.

The dentist who bought at 38 hits that milestone at 48. The one who waited until 43 doesn't get there until 53. Those extra five years, spent at a lower income level while carrying acquisition debt later in life, are where most of the seven-figure gap comes from.

It's not one bad year. It's a decade of smaller numbers that never have the time to catch up.

Why capable people still wait

The professionals I advise aren't reckless. If anything, they're the opposite. Clinical fields attract people who are cautious, detail-oriented and trained to avoid mistakes. That instinct produces excellent patient care, but it works against the same people at the negotiating table.

The hesitation I hear most often isn't about money. It's about competence.

• Will I know how to manage payroll?
• Will the staff quit on me?
• Will I make a leadership mistake I can't undo?

These are fair questions, but buyers routinely overstate the real operational risk. When my firm tracked patient retention across hundreds of transitions, the data showed that the average practice gains 4.1% more patients in the six months after a sale than it loses. The fear tends to be larger than the reality.

Student debt makes the hesitation worse, not better. Many young professionals graduate with $300,000 or more in loans and assume the safer move is to hold on to a steady paycheck until that balance feels more manageable. It's an understandable reaction, but the math runs the other way.

Ownership income is almost always the fastest path to paying down that debt, because a $57,000 annual income gap closes a six-figure loan significantly faster than a flat employee salary ever will.

A framework for anyone weighing this decision

The issues at play here aren't unique to dentistry. Any licensed professional who could own the practice they currently work in, whether that's a veterinarian, an optometrist or a physician in private practice, is working through a version of the same math.

Before deciding to wait another year, three considerations are worth addressing honestly:

What is the actual income gap in your field between owners and employees?

Do not estimate. Most professional associations publish this data the way the ADA does for dentistry. Find the real number.

What does that gap cost you over the years you consider waiting?

Multiply the annual income difference by the number of years you're thinking about delaying, then add a conservative estimate of the equity you would build in a business purchased today.

The number is almost always larger than people expect. Remember, too, that skills and experience compound just as the numbers do.

Separate the fears that are about your own competence from the fears that are about the specific deal in front of you.

Competence fears are solvable.

With the right accountant, attorney and an adviser who works only for you (not the seller), most people learn the business side faster than they think.

Deal fears, such as a practice with declining revenue or a lease with serious problems, are worth taking seriously and leaving behind.

Take heart that at this very moment, within a few miles of you, there is an owner-professional of the business you're considering buying who is operating a level below what you'd consider "competent" — and they're not going bankrupt.

The professionals who build strong lifetime wealth aren't the ones who eliminate every uncertainty before buying. They are the ones who run the numbers, build an unconflicted team around them and move when the math says they are ready.

The question is not whether you feel ready. It is what another year of waiting is already costing you.

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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.

Election season can turn even levelheaded investors into political strategists. New polls, fresh candidates, hot debates and updated predictions about which party will control Congress can all seem like reasons to make drastic portfolio changes.

Following such impulses is usually a mistake. "I regularly remind investors to save politics for Thanksgiving dinner; they have no place in an investor's portfolio," says Marta Norton, chief investment strategist at Empower.

The trouble is that it's easy to assume the political party you prefer is also the best one for markets, Norton explains, even though earnings and valuations, as well as interest rates and inflation, all have much greater influence on markets over any meaningful term.

History shows midterm years are more volatile. The data also says they tend to produce strong rebounds once results are in. According to BlackRock, the S&P 500 has posted an average gain of 14.1% in the six months following midterm elections since 1970.

So preparation does matter. But it's not about predicting a winner. It's about returning to what really determines long-term investment success: your financial plan, diversification and fundamentals.

Here are five tips from experts to help you prepare your portfolio for midterm elections.

1. Let your financial plan, not your politics, guide you

When you hit traffic on a road trip, you might take a detour. But you don't abandon your map and your destination. You can think of midterm-related market volatility the same way.

When uncertainty rears its menacing head, D.A. Davidson Vice Chairman Andrew Crowell says to "trust your financial plan. A good financial plan should be able to sustain some volatility and keep you focused on future goals, no matter the outcome."

Even with increased volatility, midterm years are generally good for market returns. Since 1937, the S&P 500 returned an average 9.2% during midterm years, according to J.P. Morgan Asset Management.

Rather than trying to predict every turn in the road, though, take the opportunity to ensure "your risk and return objectives are properly calibrated during the summer preceding the midterm election," says First Horizon Wealth Management Chief Investment Officer Eric Teal.

Review whether your goals, time horizon, risk tolerance and upcoming cash needs have changed. Then check whether your current portfolio mix is still aligned with those priorities.

2. Rebalance investments that have drifted

Staying the course doesn't mean ignoring your portfolio. Market performance over recent years may have pushed your investments away from your chosen target weights. Volatility can be an opportunity to bring them back into balance.

"If and when markets sell off, investors have a chance to reevaluate their strategy and determine whether the prevailing lower prices offer a good opportunity to increase exposure to a now-cheaper asset class," Norton says.

Rebalancing means trimming investments that have become overweight and using the proceeds to buy those that have become underweight. It doesn't always require selling. You can achieve the same effect by simply investing new cash into your underweight areas.

Rebalancing can be a smart way to scratch the "itch" to take action around election time, Crowell says. It ensures any trades you make support your long-term goals, rather than reflect short-term election noise.

3. Build resilience through diversification

Midterm elections aren't the only potential source of market turbulence. The weakest midterm-year markets also coincided with other major forces, such as Federal Reserve rate hikes and the bursting of the dot-com bubble, as J.P. Morgan Asset Management found.

Uncertainty around inflation, geopolitics and the future of the AI boom could also make for a bumpier ride this year.

Instead of trying to predict which risk will rattle the markets first, make sure your portfolio isn't dependent on a single outcome. "Diversification across asset classes, including fixed income, along with sector diversification, can play a valuable role," Norton says.

Check under your portfolio's hood to see how diversified you really are. Compare the largest holdings and sector weights. Exchange-traded funds (ETFs) and mutual funds can hold many of the same stocks or sectors and leave you more concentrated than you may realize.

Depending on your goals, diversification can include owning companies of different sizes, geographies, investment styles and asset classes, including bonds.

"In a world fretting about inflation, it's tempting for investors to lose faith in bonds," Norton says. "However, yields now price in far higher inflation, growth, and rate expectations, offering investors better cushion for potential equity market drawdowns, particularly if those drawdowns are fueled by AI concerns."

Bonds and diversification can't prevent losses, but they can help mitigate them and smooth your overall investing journey.

Different sectors also tend to hold up better than others during midterm years. As BlackRock notes, since 1990, healthcare stocks and energy stocks delivered stronger average returns, while industrial stocks and financial stocks have lagged.

That doesn't mean you should make election-based sector bets. The stronger sectors may not continue to outperform. But it does reinforce why diversified exposure across sectors matters.

4. Stay invested and focus on fundamentals

Sometimes the best move is to make no move at all. The trouble with trying to time the market around election cycles is that you need to be right twice: when to get out and when to get back in.

This is further complicated by the fact that the best days in the market often occur close to the weakest ones. According to Vanguard, $100,000 invested in the S&P 500 for the entire period from 1988 through 2024 would have grown to $4.9 million. Missing only the 10 best days cuts the ending value in half to $2.3 million.

"Markets ultimately follow fundamentals, not geopolitics," says Scott Helfstein, head of investment strategy at Global X ETFs. Corporate performance has remained strong, he says, with markets driven more by earnings expectations than political sentiment.

Elections are not irrelevant, though. Changes in tax, regulatory and/or trade policy can affect company earnings and valuations. But moves based on evaluations of those effects are different from selling based on predictions of who will win at ballot boxes.

The time to consider whether to de-risk your portfolio is if and when fundamentals deteriorate, or an asset no longer fits your financial plan, not because political headlines make you nervous.

5. Set rules for how you respond to sell-offs

Athletes know preparation is as much mental as physical. Investing is similar: It's easy to promise yourself that you'll keep your head when the markets make others lose theirs.

Following through on that promise can be another matter when you see your account balances tumble, and every headline seems to predict a worse outcome.

The best way to handle it is with a predetermined plan. Write down both the trigger and response before volatility arrives and the market's "fear index" spikes.

That might involve rebalancing when your allocation crosses a certain threshold, dollar-cost averaging into specific investments or continuing automatic contributions regardless of what the market does.

If election-season volatility does produce a significant decline, Teal says investors can "consider rebalancing and redeploying cash for the eventual rebound and recovery."

That doesn't mean you should start hoarding cash now in the hopes of timing the bottom. But it can mean having a plan for how you'll invest cash that's already earmarked for long-term investing.

You should also specify what you won't do, such as selling solely because of polling results or a sudden sell-off.

The key to surviving midterm season with your portfolio intact is to remember that "the objective is not to try to 'win' the election trade," Crowell says. "The objective is to achieve one's long-term financial goals."

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Stocks jumped out of the gate Monday after President Donald Trump on Sunday canceled planned attacks against Iran. Tumbling oil prices and Treasury yields also boosted sentiment at the start of the month, with one of the main benchmarks closing at a new record high.

In a Truth Social post, Trump said that the United States was "locked and loaded," but he decided to "cancel the attack" against Iran after "perimeters of a deal" had been agreed to.

Trump added that the agreement will include the "Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat."

Front-month West Texas Intermediate crude futures plunged more than 6% to $79.49 per barrel in response, while yields on the 2-year (-4.1 basis points to 4.25%), 10-year (-5.7 basis points to 4.686%) and 30-year (-4.2 basis points to 5.233%) Treasuries tumbled.

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.

As for equities, the blue-chip Dow Jones Industrial Average soared 1.3% to 53,178 — a new record closing high — the broader S&P 500 rose 1.5% to 7,600, and the tech-heavy Nasdaq Composite climbed 2.1% to 25,913.

The stock market got "an early boost from falling oil," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley, "but the on-again, off-again nature of U.S-Iran diplomacy could mean earnings and jobs data will have to do the heavy lifting for the bulls this week."

SpaceX highlights busy earnings calendar

Corporate earnings have been impressive so far. "Despite mixed reactions to mega-cap Tech results, underlying fundamentals remain strong," write BofA Securities strategists Savita Subramanian and Victoria Roloff. "The earnings-per-share beat rate is at its highest level since 2021, with 77% of companies exceeding consensus expectations, well above the 66% post-week 3 average."

This week's earnings calendar is a busy one, too. SpaceX (SPCX, +5.7%) is arguably the most noteworthy name reporting, with Elon Musk's mega-cap space company making its first appearance on the earnings stage as a publicly traded company.

"Revenues, EBITDA [earnings before interest, taxes, depreciation and amortization], Starlink subs, ARPU, AI pricing, Cursor ARR [annual recurring revenue], fiscal year capex guide… all of these matter," says Morgan Stanley analyst Adam Jonas.

But the bigger issue for investors, says the analyst, is that SPCX stock is currently trading 50% below its all-time high and 15% below its initial public offering (IPO) price.

Wall Street will also be watching SpaceX on Thursday, when the first of the company's lock-up period expires. This is when insiders and early investors will be allowed to sell their shares, which could create volatility in the stock.

"SpaceX used an unusually complex scheme with nine main unlock points instead of one traditional 180-day expiry," explains Bernstein analyst Douglas Harned, Ph.D. "The design staggers insider selling over roughly the first six months post-IPO, with longer lockups for some institutions and for Elon Musk personally into mid-2027."

And while Harned admits that this week's lock-up expiry creates an overhang for the tech stock, he believes "the company's messaging in its Q2 report will be important," particularly updates on "the path to full reusable Starship launches."

Boeing gets double upgraded

Boeing (BA) released its second-quarter results last week and shares rose nearly 5% in reaction to a top-line beat and positive free cash flow.

The Dow Jones stock is up again to start this week, gaining 8.0% on Monday, after the Federal Aviation Administration (FAA) cleared the aircraft manufacturer's 737 Max 7 for passenger flights after years of delays.

The blue chip stock got another boost after BNP Paribas analyst Matthew Akers double-upgraded BA to Buy from Sell. He also raised his price target to $300 from $230, representing implied upside of 28% to current levels.

"The post-COVID era of uncertainty for (Boeing) is over," says Akers. "In the next year, MAX and 777X certifications will drive inventory liquidation and operational stability."

The analyst believes this will lift free cash flow to $7 billion by 2027, roughly $1 billion more than Wall Street expects.

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When we talk about retirement, the conversation usually focuses largely on building a nest egg.

With employers moving away from offering pensions and average life expectancies increasing, saving for retirement has fallen on the employee.

As a result, industry professionals consistently encourage workers to maximize contributions to their IRAs or 401(k)s.

While asset accumulation is important, and fundamental to affording retirement, financial planning doesn't stop once you leave the workforce, because saving for retirement and living in retirement are different and require separate approaches.

New hurdles for retirees

When entering retirement, many retirees face new hurdles when it comes to tax planning, healthcare expenses, account withdrawals and making their savings last. When you're working, retirement planning is often centered around saving.

For example, financial professionals might help you identify your risk tolerance, guide you through long-term investments and many employers offer a retirement plan with a matching program as an incentive to contribute.

If savings fall behind while you're still working, it can be fixed by increasing contributions, delaying retirement or working a side gig, if your schedule allows.

In retirement, circumstances are different. Rather than actively earning income, which can come with raises and bonuses, retirees must rely largely on their savings, which are likely fixed.

This phase of life is also when federal programs, such as Social Security and Medicare, become prevalent, raising questions about when to claim benefits, what Medicare options to pick and how to withdraw money from those retirement accounts without triggering access taxes or becoming penalized.

Rather than focusing solely on growth, retirees must figure out how to turn their savings into a reliable source of income that lasts.

A big mistake

One of the biggest mistakes I see retirees make is assuming the investment strategy that helped them build their nest egg will work the same once it's time to live on it. When you're working, market volatility is easier to recover from because you're actively earning income, and you have the time to recover from downturns.

However, once your portfolio becomes your main source of income, you might need to make withdrawals regardless of where the market stands. For some, this could mean selling investments at a lower value to meet income needs.

Over time, this can strain your savings, potentially depleting your portfolio prematurely.

Generating income from your investments involves much more than taking out money when you need it. Traditional IRAs, Roth IRAs, brokerage accounts, Social Security benefits and pensions, if you have one, are all taxed differently.

Without a coordinated withdrawal strategy, you could unintentionally pay more in taxes or miss opportunities to make savings work more efficiently.

One coordinated strategy

Instead of viewing retirement accounts as separate buckets of money, a retirement income plan allows you to manage withdrawals, taxes and income needs under one coordinated strategy.

Unfortunately, many people wait until they're in retirement to start thinking about their retirement income strategy.

In addition to prioritizing growth, the time leading up to retirement can also be used to start planning for how those assets will be used.

Estimating future income needs, reviewing healthcare costs, coordinating retirement accounts and understanding how they'll work together in retirement will make the transition much easier when that time comes.

Saving for retirement is crucial, but the financial planning doesn't end once your golden years begin. The transition from earning income to living off retirement savings requires a different mindset and a new approach.

Developing a retirement income plan that addresses how income will be generated, how withdrawals will be taxed and how your savings will support future spending needs can help ensure the nest egg you've spent decades building serves you throughout retirement.

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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.

With the stock market trading near record highs, confidence is soaring, and investors are increasingly buying into the good vibes.

Many people think the bull market will continue indefinitely. They reason that President Donald Trump's pro-growth policies will create a durable expansion, with deregulation and decreasing oil prices and mortgage rates fueling the surge.

Market forecasters have no crystal ball, but history teaches us important lessons, such as: The good times don't last forever, and sometimes the warm glow of summer optimism in the market fades into a long, cold winter of harsh economic reality.

Maybe this era will defy history and the economy will have several more years of solid economic growth. But investors nearing retirement should ask a different question: What if it doesn't?

History shows that periods of confidence often create the conditions for complacency, which can be expensive.

Middle-class realities

After enduring inflation, rising interest rates, regional banking concerns and geopolitical uncertainty, markets have proven remarkably resilient. The S&P 500 has more than doubled from its October 2022 lows, rewarding investors who stayed invested through volatility.

There's a belief among many market experts that any pullbacks will be shallow, and if markets decline, many investors assume recoveries will be swift because that's largely been their recent experience — their recency bias (which we'll explore later). But they're overlooking two important realities:

• The middle class is struggling
• Debt — both personal and the national debt ($40 trillion) — keeps climbing

Those factors could help trigger a prolonged or extreme market pullback.

One challenge in interpreting today's economy is recognizing that experiences vary dramatically. The economy is stronger only for a small percentage of people.

For example, only 3.2% of American retirees have at least $1 million or more in retirement savings. But for many people, their financial situation in today's economic climate isn't so great.

• According to the Federal Reserve Bank of New York, household debt reached about $18.8 trillion in early 2026, an all-time high.
• Getting an affordable mortgage is difficult and burdensome. Mortgage balances, credit card debt, auto loans and student debt have all expanded meaningfully in the last several years.
• Consumers are increasingly relying on loans and debt to cover the rising costs of daily expenses and sustain their lifestyles.

Debt works wonderfully when times are good. But it becomes unforgiving when economic conditions deteriorate.

The danger of recency bias

Some investors and market experts believe that a market pullback will be a 20% to 30% decline at the maximum, and that the recovery will happen within a year.

They have recency bias pointing to recent pullbacks and recoveries, such as events that occurred in 2020, 2022 and 2025. But they fail to consider what happened in the 2007-2009 Great Recession and before that, in the technology crash in 2001.

They've forgotten or never experienced previous bear markets during the 1950s, 1960s, 1970s, the early 1980s and Black Monday of 1987.

This isn't even to speak of the Great Crash of 1929 and the Great Depression of the 1930s. Most people don't believe those events will ever happen again.

The scary part for many investors is that they have an investment and retirement plan that assumes economic recessions will be short-lived, market downturns will be shallow, and the recovery will be quick.

But what if that doesn't happen? Investors must contemplate that question and plan for it.

Prudent investors need to ask these uncomfortable questions:

• What if growth slows unexpectedly?
• What if inflation proves stickier?
• What if deficits eventually pressure interest rates?
• What if consumers begin pulling back?
• What if the next bear market looks more like 2000 or 2008 than 2020?

For those in retirement or nearing it, how do they prepare? They shouldn't ignore the realities of the past. As the famous maxim goes, "History doesn't repeat exactly, but it often rhymes."

Have peace of mind by creating your own economic reality

There are so many factors out of our control that will often give us reasons to worry — wars, politics, inflation, interest rates, market headlines, etc.

But financial confidence doesn't come from predicting the future correctly. It comes from preparing thoughtfully. Focus on what you can control — your spending, debt, tax-mitigation strategies, market risk exposure and income planning.

Just as in proper business planning, you should consider the worst-case scenario and develop a contingency plan. Create your own economic reality by building a retirement framework that will protect you in a market pullback, a framework that prevents you from having to adjust your lifestyle.

Because eventually, another prolonged downturn will arrive. No one knows when. But history suggests it will happen again.

Stress-test common retirement assumptions. Ask yourself:

• "If markets fell 35% and remained down for three years or more, would my plan still work?"
• "In the event of a market decline, can my lifestyle be sustained, or might I be forced to reduce spending or not travel as desired?"
• "If inflation remained elevated, would my income sustain my lifestyle?"
• "Could I maintain peace of mind regardless of market headlines?"

These questions matter — especially when retirement shifts from the accumulation stage to the distribution stage.

It's not the time for a high-risk, high-reward approach

Savings goals for many people are way ahead of schedule. Protect the harvest you enjoy now and store up for a long winter, so when the market is disrupted for a lengthy period, you have what you need and can help family members and others, too.

The most successful retirees we meet are rarely the ones who took the greatest risks. Often, they are the ones who planned thoughtfully.

• They retired earlier than expected because their conservative plans exceeded expectations
• Their spending confidence increased because reality exceeded assumptions
• They were able to travel more, give more, help family members more and enjoy life more — not because they chased the upside of the market, but because they built margin into their lives

Others implemented tax-efficient strategies that allowed more of their wealth to remain invested. Some created robust income streams that were less dependent on daily market fluctuations.

A comfortable retirement in these uncertain times requires reducing your risk and taking a conservative approach.

You've spent decades working, saving, investing, sacrificing and delaying gratification. You built wealth so that one day your money could begin working for you.

Don't leave that next chapter to chance. Plan carefully enough that if markets disappoint, your lifestyle remains intact, your confidence remains strong and your peace of mind remains unmoved.

That might ultimately be the greatest return an investment plan can provide.

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.

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: My mother suffers from MS and now needs daily help. I'm starting to look into programs that will pay me to be a caregiver. Am I allowed to keep my regular job or will I be forced to quit? I'm a freelance consultant with flexible hours, but I can't give up that income (or not easily). I assume the pay to be a caregiver isn't great. — Squeezed

Dear Squeezed: As the U.S. population ages, a growing number of Americans are finding themselves thrust into a role they may not be prepared for — caregiving.

AARP reports that one in four U.S. adults is a caregiver, with the majority caring for another adult. Additionally, one in three caregivers is under 50, which means they may be trying to balance providing care for a loved one with maintaining a career during their peak earning years and keeping up with retirement savings goals.

Here, we have a reader who wants to step in and care for her ailing mother. But every hour she spends providing care is an hour she can't earn income through her consulting business.

While there are programs that may pay her to care for her mother, the question is: Will the income be enough to cover her lost wages? Here's what our experts say someone in this situation needs to know.

You probably won't have to quit your job

For people with strict working hours, juggling a full-time job and caregiving may not be possible. For someone with flexible hours who isn't tethered to an office, it may be doable.

Faris Flournoy is the CEO at Flournoy Health Systems, a home care management company. And he says that in this situation, you definitely do not need to rush to quit your consulting job.

"One of the biggest misconceptions about family caregiving is that you have to choose between caring for your mother and keeping your career," he says. "There are programs that may allow you to do both. Some states offer programs that compensate family caregivers while they continue working another job, particularly if they have flexible schedules."

Before reducing your work hours, contact your state's Medicaid office or Area Agency on Aging to determine exactly which caregiver programs are available, how many hours are covered, whether your parent qualifies and whether family caregivers are eligible for payment. Rules differ by state, so don't assume a program available elsewhere is the same where you live.

Don't expect caregiver pay to replace your income

As our reader correctly assumes, the wages associated with caregiver programs do not tend to be overwhelmingly generous. Plus, Flournoy cautions, "Many programs cap the number of paid hours, even if you are providing significantly more care than that."

Flournoy explains that while being paid as a family caregiver can certainly help offset some of the financial burden, it's rarely enough to replace a full-time income. And even with a flexible job, it may be challenging.

"Some caregiver programs require you to provide care during approved hours or meet minimum hour requirements, which can make managing another job more challenging," Flournoy says. "Before making any financial decisions, get clear on exactly what the program expects, how many hours it will cover, and whether those requirements fit with your current work schedule."

Flournoy also emphasizes the importance of looking out for your own financial best interests while trying to help.

"The financial impact of caregiving extends well beyond today’s paycheck," he warns. "Many family caregivers reduce their work hours, pass on promotions, or leave the workforce entirely, which can affect retirement savings, Social Security benefits, and long-term financial security. Those are sacrifices families often do not anticipate until they are already making them."

Evan Farr, Certified Elder Law Attorney and retirement planner, agrees that caregiving can have more long-term financial consequences than expected.

"While the immediate costs include lost income for this calendar year, the true cost includes compounded losses from reduced savings and reduced career longevity due to interrupted employment," he insists.

Medicaid is what usually pays, but there are other solutions too

Medicaid: While getting paid to be a caregiver may be an option, there are requirements to meet. And one of those may be qualifying for Medicaid.

"Most paid family caregiver programs are funded through Medicaid, not Medicare, and each program has its own financial and medical eligibility requirements," Flournoy says.

Depending on the program, some Medicaid caregiver payments may receive favorable federal tax treatment.

Flournoy commonly sees families land in situations where they've saved too much money to qualify for Medicaid but not enough to comfortably pay for ongoing home care.

Flournoy also says that for the most part, Medicare does not have paid caregiver programs in place, nor does it pay for custodial care — the ongoing personal assistance many people need with bathing, dressing, meal preparation, and other daily living activities.

Special cases: "Some Medicare Advantage plans, veterans’ benefits, and long-term care insurance policies may provide additional support, but families should not assume Medicare alone will cover long-term daily caregiving," he says.

To be clear, some Medicare Advantage plans (Part C) cover limited in-home support services or respite benefits, but they generally do not pay family members as ongoing caregivers. They may, however, cover adult daycare.

Veterans' benefits are available only if the care recipient is an eligible veteran (or, in some cases, a qualifying spouse).

Become your parent's employee: Finally, if your mother has sufficient assets to pay you directly, you could consider setting up a personal care agreement. Your compensation must be set at a "reasonable" rate, or what you would typically pay someone else to do caretaking. The national average for non-medical in-home care was $35 per hour in 2025, according to CareScout. If you happen to be a trained nurse, you can charge more, or $90 per hour on average.

However, be aware of the "nanny tax." If your parent hires you as a household employee, payroll tax rules may apply once annual wages exceed the IRS threshold. Check current IRS rules or consult a tax professional.

The devil's in the details when it comes to Medicaid

A big reason not to rush into a caregiving arrangement is that the nuances can be complicated, Farr says. As he explains, it's important to determine whether you can legally perform the authorized care within the authorized time frame and properly keep records of that care.

"Medicaid-paid family caregiving is not merely a family-arranged situation where Medicaid sends you a check. It is a regulated form of caregiving," Farr insists.

"The mother must meet medical requirements and financial requirements to receive Medicaid-funded LTC," Farr continues. "The state must also approve a care plan. The caregiver may be required to register through an agency, fiscal intermediary, or through the consumer-directed model."

Farr says that, in addition, to become a caregiver, you'll typically need a background check and training. You'll also need to see how many hours of care Medicaid actually approves.

"One of the largest misconceptions is that the family decides what hours of care need to be performed and then expects Medicaid to pay for those hours," Farr explains. "This is not how Medicaid-paid family caregiving works."

Rather, Farr says, each state determines what hours are allowed in the approved care plan.

Flournoy says that one challenge of becoming a caregiver is that each state administers these programs differently.

"One of the biggest differences from state to state is how many caregiving hours are eligible for reimbursement. Documentation requirements also vary," Flournoy says.

Some programs, he explains, require detailed time logs and care plans, while others have a more straightforward reporting process. Eligibility rules can also differ, including which family members can be paid.

"In some cases, spouses or legal guardians may not qualify," Flournoy cautions.

Build a robust care plan for your mom — and a financial plan for yourself

While it may be possible to get paid to care for your mom, both Flournoy and Farr recommend looking beyond the caregiver paycheck and instead focusing on a holistic care plan.

"I have seen too many families spend valuable time searching for one program that will cover everything, when the better approach is combining the right services at the right time," Flournoy says. He says that in this situation, a comprehensive plan may include personal care, skilled nursing, therapy services, hospice, and palliative care.

"The sooner families can identify what level of care their loved one needs and which programs can help along the way, the more flexibility they will have to build a care plan that supports both their loved one and their own financial stability," Flournoy says.

Farr, meanwhile, recommends consulting with an experienced elder law attorney to ensure that your mother maintains eligibility for Medicaid benefits and advise on the legal side of things.

He also says it's important to protect your family's financial well-being in addition to your own.

To that end, you may want to sit down with a financial planner to discuss how your caregiving role may affect your long-term financial goals. Even if you're able to continue working as a consultant, juggling both roles may force you to forgo income that impacts your retirement savings and future plans.

It's noble to want to step in and help your mother. But it's important not to sacrifice your financial security in the process.

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.

More Wealth Wise Retirement Advice

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• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

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• How to Hire a Caregiver: Tips for Finding the Right Fit
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The past few years gave many investors exactly what they hoped for — and also set them up for some major risks.

If you bought the right stocks and held them through the volatility of the past few years, your positions have grown substantially. The problem is that "substantial" and "safe" are not the same thing.

We talk to a lot of clients who have watched a single holding climb to 20, 30 or even 40% of their net worth. Sometimes it's a tech stock they've owned for a decade, or a company stock that has accumulated through a career of compensation packages. Either way, they're sitting on significant gains.

Many investors recognize the risks of holding too much in a single stock — they just don't act.

Investors who struggle in retirement are often the ones who held for so long that the decision was eventually made for them, whether by a market correction, an estate situation or the realization that the tax bill they were trying to avoid had grown far larger than if they'd started earlier.

The position that built your wealth doesn't have to be the one that defines your retirement. Getting there is mostly a matter of being willing to ask the question.

The attachment problem

When a stock has been good to you for a long time, it starts to feel like a relationship. Clients who've held Nvidia (NVDA) or Apple (APPL) or Microsoft (MSFT) through multiple cycles have watched those stocks get them through a lot. The idea of selling feels like betrayal. It isn't rational, but human nature rarely is.

That attachment compounds over time. The longer a position has outperformed, the more convinced investors become that it will keep outperforming. We don't want the discomfort of being wrong after so many years of being right.

Consider this: If you didn't already own this stock, would you choose to put 35% of your retirement savings into it today? For most people, the honest answer is no.

At a certain point, the conversation ought to shift from maximizing returns to protecting what you've already built. Unlike institutions, individual investors don't have the benefit of perpetuity — there's a finite window to use and enjoy wealth.

The tax trap

Many advisers recommend reducing concentrated positions. The problem is, most people know that intellectually, but as soon as advisers bring it up, all the client hears is "taxes." They're not entirely wrong to do so.

Investors often let the tax tail wag the dog — prioritizing the avoidance of a tax bill over making decisions that better align with their long-term goals.

A position worth $1 million with a $100,000 cost basis carries $900,000 in embedded gains. In higher-tax states, the combined federal and state rate could reach 37.1%, meaning selling could result in a tax bill of more than $330,000.

So investors hold. They tell themselves the position is still performing. They say they'll deal with it later. But deferring a decision is still a decision, just not a conscious one.

Eventually, "later" becomes "now." The closer a client is to retirement, the more that tax liability weighs on their financial decisions. Spending decisions, income planning and even how much they let themselves enjoy retirement all get filtered through the same question: What will it cost me in taxes?

People end up taking the minimum required by their RMDs and missing the years when they actually have the energy and desire to use their wealth. The government's distribution schedule isn't designed around your travel plans.

Building a way out

The good news is that selling everything at once is rarely the right answer anyway. There are structured approaches that can gradually reduce concentration, spread tax consequences over time and preserve flexibility.

The most straightforward is staged selling across multiple tax years, which allows an investor to recognize gains in manageable increments rather than all at once.

Paired with detailed cash flow modeling in retirement, this approach can actually free people up to spend more by making the tax exposure visible and predictable.

For investors who want to build a more systematic tax strategy, they can offset their gains through tax-loss harvesting.

Direct indexing strategies have also evolved considerably. The newer long/short variation is particularly relevant for people dealing with concentrated positions.

These methods are designed to generate losses over time, which may help offset gains as a concentrated position is gradually reduced. The goal isn't to predict market direction, but to create flexibility and improve after-tax outcomes.

Another option worth serious consideration, especially in the current interest rate environment, is the charitable remainder trust.

The core appeal is simple: An investor contributes appreciated stock to the trust, and the trust sells the stock tax-free and reinvests the full proceeds.

The investor receives an income stream from the trust over their lifetime, and the tax liability on the original gain is spread across those payments rather than being due all at once.

With current interest rates, distribution rates from these trusts may exceed 10%, and the deduction generated can be paired strategically with Roth conversions in the years before RMDs begin.

None of these strategies requires perfection or a full exit. What they do require is a willingness to start. A conversation with your financial adviser is a meaningful way to get the ball rolling.

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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.