Over the past 12 months, Capital Group Dividend Value (CGDV) sports one of the best returns in the Kiplinger ETF 20, our favorite exchange-traded funds. Its 33% one-year return through May beat the S&P 500 as well as 88% of its peers (funds that focus on large-cap stocks trading at value prices).

The exchange-traded fund aims to generate an above-market-average dividend yield by focusing on high-quality U.S. companies — 90% of the portfolio holdings must be stocks of companies with investment-grade credit ratings, and 90% must pay dividends. The fund currently yields 1.3%; the S&P 500, 1.1%.

The result, says fund comanager Chris Buchbinder, is an ETF that typically participates in bullish stretches — though it may not keep up with the broad market — and outperforms during sell-offs.

"Companies that pay dividends have more consistent cash flows, a stronger financial profile and are more resilient during periods of market weakness," he says. Each of the ETF's five managers and a group of analysts independently run a piece of the fund's assets. Over the past three years, the fund's 26% annualized return beat 98% of its peers and the S&P 500.

Managers made a timely move during the 2025 tariff tantrum

During the "Liberation Day" tariff-related sell-off in April 2025, CGDV managers loaded up on semiconductor and semiconductor-related stocks that had fallen dramatically, including Nvidia (NVDA) and Applied Materials (AMAT).

Back then, Nvidia shares hit an intraday low of $87 and it now trades at more than $200. Other chip company stocks rebounded sharply, too. Over the past 12 months, the S&P 500 industry index of semiconductor and semiconductor-related stocks soared 107%.

Before last year's sell-off, the fund had a "relatively modest" exposure to the information technology sector, says Buchbinder. (The sleeve of assets he manages had 0% in tech back then, he notes.) But now, the sector makes up 34% of the portfolio. Don't expect that tilt to change much.

"There's still opportunity in some of these AI semiconductor-related companies and software companies," Buchbinder says.

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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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 68-year-old single government lawyer in Henrico, Virginia, who vows she'll never retire.

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

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

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

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

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

The Basics

How did you make your first $1 million?

I made my first million in my 401(k) in September 2024 after saving for 20 years, and I paid off my home (worth $950,000) just 17 months after I bought it with my savings and with the equity I made when I sold my prior home.

What are you doing with the money?

In 2020, I was driving home from work and looking for something to listen to on the radio and accidentally tuned in to Dave Ramsey's show. I was intrigued. At the time, I had two loans from my TSP — the federal version of a 401(k) — had credit card debt and car loans. Altogether, it was about $90,000.

I paid off all of my debt (I did not go down to $1,000 in my emergency fund, as Dave suggests) in about 24 months and increased my retirement contributions to 15% and then to the max by the time the debt was paid off.

After 32 years of marriage, my husband told me he wanted to be free. The housing market post-COVID was crazy, and I had been paying down our massive mortgage with extra money toward the principal.

After all was said and done, I had a nice down payment for a townhouse and money left over. I had two cars (paid for) and sold one.

Once I was settled into my new home, I ran the numbers to figure out how quickly I could pay off the mortgage. Without a husband (who had expensive hobbies and toys and a hefty yearly tax debt), I had so much more money to do this.

I started collecting Social Security at full retirement age, and so with all of those factors coming together (no car payments, no credit card debt, no TSP loans), I was able to pay off my mortgage in April 2025.

I'm planning to work for two to four more years (I say that every year!), sock away some money and plan to live off of my pension and Social Security without touching the TSP until I'm 73, if at all possible.

And I plan to do something new in the next chapter — maybe even write a book.

The Fun Stuff

Did you do anything to celebrate?

I bought a beautiful navy blue washer and dryer that has a steam feature (I love them!), and I bought four pairs of colorful, fun, somewhat expensive (to me, but not to most people) high-heeled shoes that people notice and compliment me on all the time.

They are as pretty as my washer and dryer!

What is the best part of making $1 million?

The incredible satisfaction I felt when I reached that milestone (years earlier than expected) that years ago seemed out of reach.

Did your life change?

Yes. Having more than a million in my retirement account and a paid-off home, savings and no debt made me realize that I am working because I love what I do, not because I have to pay a bill. In the end, that is real freedom.

Does anyone know you're a millionaire?

Only my daughter knows. I'm not comfortable telling people about my net worth (currently around $2.5 million), but I do love helping people when they come to me with their investment questions.

Do you plan to retire someday?

I will never stop working at something. I have been working since I was 14 years old, and the word "retirement" makes me cringe — it's just not in my vocabulary. And the expression "golden years" — even more cringe.

My next adventure is going to be whatever challenge I can dream up. I'm not done yet!

Looking Back

Anything you would do differently?

I would definitely have put more (a higher percentage) into my retirement account early on. Did I mention this is my second career? I quit my prior career after 16 years at age 34, went to college, then law school and became an attorney (prosecutor) at age 42 — all college and law school paid for from my savings from my prior work.

I also would have done a Roth as soon as it became available. I wasn't even aware that the federal government had a TSP Roth option until 2021 — and that's when I started putting money into a Roth.

I would have also bought fewer cars. I was a sports car junkie and wasted a lot of money on that obsession! But they were fast and fun (all convertibles).

What advice would you give to your younger self?

Start early, stay focused, have a plan and you will reach your financial goal.

Once you get there, set a new goal! Never stop dreaming or reaching.

Dream. Do. Repeat.

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

I listened to Dave Ramsey's show constantly for inspiration. I don't do what he says 100% of the time, but I do follow most of his advice.

I read a number of Dave's books at the start.

Now I subscribe to a number of financial podcasts and financial news/articles.

Did you work with a financial adviser?

No.

Did anyone help you early on?

My dad was an incredible saver. But he also had balance and enjoyed life. He retired at 62, and he and my mother were very happy.

His work ethic and financial goals were inspiring.

I think, however, that he was a much more conservative investor as compared to me.

Looking Ahead

Plans for your next $1 million?

I plan to keep building on what I have been able to achieve — and see where it goes.

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

Start early. If you can't put the max in, start with the percentage that will give you the employer match and increase it as your income increases.

Even 1% or, ideally, 2% per year will have you at 15% in just five years, and you never miss the money.

And never take money from your retirement account!! Get a second job if you need to, but that money is for your future self.

And last, don't go into credit card debt and get rid of and vow to never have a car loan! A $500 car loan that is put into investments instead of paying a car company's finance department will grow to $1 million over your working life. Stop borrowing money for a depreciating asset.

And most of all, be content and thankful for all your blessings.

Oh, and don't get married. :-)

Do you have an estate plan?

I have a will, durable power of attorney and medical power of attorney.

Also, most important, as soon as I was single, I changed my beneficiary designations in my retirement account, my bank accounts and my life insurance.

I think many people forget to do that.

What do you wish you'd known …

When you first started saving? That it's all going to unfold as it should, and it's definitely going to be worth it!

When you first started investing? To make investing for the future a priority, leave the money alone so it can grow, don't react emotionally to market swings, enjoy the ride and save as much as possible for retirement. (Whoops! Now you have me using that word!).

Anything you'd like to add?

I'm truly ecstatic with where I am in my life.

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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Imagine opening your mailbox less than seven years from now to find your monthly Social Security check chopped by nearly a quarter. That's exactly what will happen in 2032 if lawmakers fail to shore up the retirement trust fund, according to a Committee for a Responsible Federal Budget (CRFB) report.

Under current law, insolvency triggers an automatic benefit reduction. This nationwide event, in which "no state is spared," would affect roughly 63 million Americans — more than one in five people in the country. Depending on where you live, individual losses are projected to range from $459 to $556 monthly ($5,508 to $6,672 annually).

While Social Security was traditionally designed to replace 40% of pre-retirement income, 54% of American households now report having no dedicated retirement savings, according to the Federal Reserve's Survey of Consumer Finances (SCF). Any cut will undermine tens of millions of beneficiaries, but those with little to no savings will be hit hardest, potentially forcing states to cover the critical shortfall. According to the CRFB, over 40 states would lose at least 1% of their Gross Domestic Product (GDP), while 15 states stand to lose between 1.5% and 1.9%.

What you should know about the data

The Social Security trust fund is expected to face insolvency in 2032, triggering a mandatory, immediate, across-the-board benefit cut. The 2026 OASDI Trustees Report estimates that the trust fund will run out in the fourth quarter of 2032, one quarter earlier than previously projected. If this happens, benefits will be cut by 22%.

The CRFB released its report, No State Spared: Mapping the Impact of Social Security's Insolvency, on June 3, 2026, just days before the 2026 Social Security Trustees Report was issued on June 9, 2026. Because the CRFB based its calculations on the 2025 Trustees Report, its study projects a 24% reduction rather than 22%. For state-by-state benefit amounts, they used the most recent annual data from the 2024 OASDI Beneficiaries by State and Country Report.

The 2% difference is small enough that the CRFB data still provides a realistic, balanced simulation of how benefit cuts will impact retirees and state economies.

Now, let's take a look at how these potential cuts would reduce monthly retiree benefits, which states have the most/least retirees impacted and how state GDPs would shrink. You can find the full table at the end of this article.

Average monthly cut per retiree

Social Security benefits are tied to lifetime earnings and regional wage histories. As such, the dollar amount stripped from monthly checks varies depending on where a retiree lives. The average monthly cut to benefits nationally is $500 — almost the equivalent of a typical household's monthly grocery budget. Cuts would surpass $500 in 29 states. The gap between the states facing the largest and smallest cuts is $97.

Retirees in wealthy, historically high-wage states will feel the deepest cash drain in their monthly budgets. In these regions, high lifetime earnings translate to larger scheduled Social Security benefits — which means a cut to benefits shaves off a larger chunk of cash.

Connecticut leads the nation in benefit cuts with a projected average monthly loss of $556. New Jersey and New Hampshire are close behind, with projected losses of $554 and $553, respectively.

On the other end of the spectrum, states with historically lower average wages are expected to see smaller nominal cuts to their benefits. However, the impact on retirees' budgets may be more deeply felt in such states.

For example, retirees in Mississippi are projected to see the nation's smallest average monthly cut at $459. However, these retirees are more likely to rely on Social Security as their sole source of income than those in states with historically higher average wages. In states with lower per-capita incomes, a $459 monthly reduction represents a consequential loss of purchasing power.

Where the cuts will hit hardest

The states with the highest percentage of residents receiving Social Security are concentrated in the five regions/states with older demographics. In these five states, more than 20% of people will feel the financial hit of lower benefits directly in their households, changing the fabric of local communities. Maine leads the nation with 22.9% of its total population likely to be directly impacted (300,000 people); West Virginia follows closely at 22.4% of its population (400,000 people).

Conversely, the areas with the smallest percentage of affected residents tend to have younger populations or distinct local workforce demographics. The District of Columbia has the nation's lowest exposure at 10.5% of its population, accounting for 73,648 people. Texas has a relatively low percentage at 13.6%, yet because of its massive size, that "low" percentage translates to an incredible 4,258,266 people losing benefits.

Impact on state GDP and local economies

When analyzing the fallout from a potential Social Security benefit cut, a clear economic pattern emerges: lower-income states with older populations will experience a significantly larger percentage of Gross Domestic Product (GDP) loss. It sounds counterintuitive at first — after all, retirees in wealthier states lose more absolute dollars per check. Yet states including West Virginia (1.9%) and Mississippi (1.8%) face an economic hit nearly twice as severe as Connecticut (1.1%) or New York (0.8%).

Why is that? Wealthier retirees may have robust personal savings, 401(k) plans, or private pensions, allowing them to absorb a benefit cut. Retirees in lower-income states, however, generally rely on Social Security for the vast majority of their livelihood. Most of the benefits they receive are injected almost immediately into the local economy to pay for necessities — groceries, utilities, fuel, and healthcare. When those checks are cut, that spending stops instantly.

Because lower-income retirees spend their benefits locally, those dollars circulate through a compounding "multiplier effect." When a state has both a high concentration of retirees and an economy in which federal benefits make up a larger slice of the total income pie, cutting those benefits pulls the rug out from under local commerce. In states like West Virginia, Mississippi, and Vermont, the sudden disappearance of hundreds of millions of dollars in consumer spending will directly hit the state’s total economic output.

We need a fix

For decades, Social Security has served as the bedrock of financial security for millions of older Americans. But an urgent countdown is ticking. Without congressional intervention, the Social Security retirement trust fund is projected to face insolvency by 2032.

The economic ripples won't stop at individual household checkbooks. Because most retirees pour their monthly benefits straight back into local businesses, grocery stores, and healthcare providers, this looming insolvency is a direct threat to state economies. Total benefit cuts are projected to drain more than 1% of GDP from 40 different states, hitting lower-income states with older populations like West Virginia, Mississippi, and Vermont the hardest.

Ultimately, this isn't a problem safely tucked away for the next generation. The clock runs out in less than seven years, which means the upcoming legislative terms will decide whether lawmakers fortify the safety net or allow an unprecedented economic shockwave to hit their home states.

Full table

Here is the full table in alphabetical order. You can explore the CRFB's interactive map here.

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42 years ago, my grandfather, his cousins and their parents organized the first of what would become a biannual family reunion with well over 100 relatives in attendance. In those decades, our family has grown so large, it's becoming unwieldy and a little detached.

The generation that started the tradition were fairly tight-knit, and many made an effort to see each other outside of reunion years anyway. But for the younger generations to come after, we only ever see most of our distant cousins at the biannual reunion.

The biggest challenge with planning a family reunion is less about the logistics – any standard guide to event planning will cover you there. The biggest challenge is getting people to keep attending year after year.

This year, we used the reunion as an opportunity to reflect on how future generations (mine included) can keep the tradition going. I wanted to share what we talked about with others who might be struggling to get a tradition like this started in the first place for their own family.

1. Reconnect with the relatives you want to invite outside of the reunion

The "founders" of our family reunion started it in an effort to reconnect family members that had grown up together and seen each other at regular family gatherings since the 1940s. As they grew older, they moved to different states and those family gatherings grew less frequent. The first family reunion in 1984 was a replacement for those gatherings among a group of people who were already relatively close.

Today, my generation doesn't have that same history. We grew up all over the country and many of us only ever see each other at our biannual reunion. If we were starting a reunion from scratch, I might not even have the contact information for half of them, let alone a close enough relationship to invite them to a reunion.

If your family is far flung like ours has become, start by just reaching out to your relatives and finding a way to reconnect with some of them outside of a big reunion. This might not be practical to do via in-person gatherings. But if you haven't seen some of these folks for a while, find a way to connect the family in a low stakes, low effort way – a Facebook group, a family group chat, a family website.

You just want a way to get everyone on each other's radar so that when you do meet in person for a reunion, it's not a gathering of strangers. It's easier to want to go to a reunion when you feel like you know the people who will be there.

2. Start small

In the 80s, our family reunion was fairly small (for an Irish Catholic family). It was essentially the siblings who'd grown up together gathering back in their hometown with their kids and spouses in tow. It grew to the size it has because the tradition of having a reunion was already in place when the children of those siblings grew up and had kids and spouses of their own.

So you can start small, with relatives who know each other well enough that a reunion is an easy yes. Then, either try to expand your invite list each year or just give that core family time to grow on its own.

A smaller reunion to start will also be easier logistically. If you're not a professional event planner, it's nice to start with a more manageable head count.

3. Establish a family reunion planning committee

No single person should shoulder all of the responsibilities of event planning. The logistics are far more manageable if you've got a team.

In our family, the planning is done by a committee who meet up (via video chats) in the months leading up to the reunion to figure out the details. The people on that committee change depending on who is hosting. But it's never up to one person to organize accommodations, venues and catering for our 100+ head count reunion.

Don't try to do it on your own, either. When you're reaching out to reconnect with family members, try to find at least one or two others who are excited enough about the idea to plan it with you.

4. Talk about your budget and finances early

A family reunion doesn't have to be expensive, but it's unlikely to be completely free of costs. You may need to rent out a venue. You'll definitely need to provide food, either via catering or by buying enough food to cook for a large group. Just as you shouldn't shoulder all the responsibilities of planning, you shouldn't shoulder all the costs, either.

Our family handles the financial side a couple of different ways. The main one: After securing the accommodations, pricing out the catering and figuring out the other costs for the event, the planning committee comes up with a cost per person. When invites go out, so does a request for that cost per person. We also have a few generous elders who donate more than their share of the costs.

Lastly, our family runs a silent auction at each reunion to raise extra funds for the next reunion. It features family heirlooms, local specialties brought in from the various states our family members now live, handcrafted items and other things that give people something fun to take home. The auction doesn't raise enough on its own to cover the full cost of the reunion, but it's a fun way to pad the budget.

All that money raised through the auction, the donations, and the funds gathered from each family member that RSVPs goes into its own account (currently managed by one of my great-uncles).

When you're just starting out, you might have to be one of the "generous elders" donating more than your share of the costs. But don't be afraid to ask for contributions as our family does. Just make sure to fit the event to your budget rather than the other way around.

You can pad your budget a little more by making that dedicated reunion account a high-yield savings account.

Use the tool below, powered by Bankrate, to compare top savings account offers quickly:

5. Keep the itinerary simple

The most important part of a family reunion is family. You don't need an elaborate schedule of activities. You just need space and time to gather. Over the decades, our family has honed a kind of template for what each reunion will look like:

• Friday: Everyone arrives at the destination in their own time. There's an informal gathering (usually in the hotel's hospitality room) with a spread of food and drinks that people can get as they come in. We also wear name tags to avoid those awkward "I should know your name, but I don't" moments.
• Saturday: We take a big family photo, wearing our family shirts. This is the only thing that we have to be punctual for. Then, we have a picnic with some games. Later in the evening, we have dinner and a talent show (our family likes to sing). There are start times listed for these activities, but showing up late isn't a big deal.
• Sunday: The only planned activity for this day is brunch. Some relatives leave early, some stay a little longer to do their own thing.

Having a base template for what each reunion will look like can make the planning more straightforward year after year. You don't have to reinvent the wheel each time.

Above all, keep it simple. Getting dozens of people to show up at the same time in the same place isn't easy. So keep your agenda loose and minimize the number of activities that demand strict punctuality.

6. Make it a multigenerational collaboration

One of the biggest takeaways to come out of our discussion at this year's family reunion: It's time for younger generations to step up when it comes to planning. For decades, the children of the first generation have been doing a lot of the work, but they are now in their 80s.

While my mother and her generation have gotten more involved in the last 20 years or so, we realized that there needs to be a more intentional transfer of responsibilities from one generation to the next.

If you want to build a tradition strong enough to outlast you, you need to invite younger generations to participate in the planning and decision making around what your family reunion looks like.

In our case, this means making sure that the reunion planning committee includes representatives from different generations – my grandparent's generation which possess the knowledge and experience of planning these gatherings for the last few decades, my parent's generation which has gotten more involved, and my own generation which has been attending these events all our lives and are now old enough to start learning the ropes.

The goal is that by maintaining this multigenerational mix, even when my generation becomes the oldest one at the reunion, the transition of planning duties from one generation to the next will be a lot smoother.

Just go for it

If you've been thinking about starting a reunion for your family, I hope you take this as your sign to take the leap. Because instilling this tradition in your family is worth it. I have been attending these reunions since I was a baby and I hope to see them keep going even into my 90s.

One weekend isn't enough time to reconnect with every member of my family as deeply as I might like. But there's something special about taking this time every other year to gather, check in with each other and sing "Oh, Danny Boy" for the umpteenth time.

Keeping a family reunion going takes teamwork. Take our quick quiz to discover the role you could play in building a family tradition that lasts for generations.

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Recent changes in the housing market bring good news for home buyers. According to Realtor.com’s June 2026 housing trends report, asking prices are easing and buyers have more leverage than they've had in recent years.

The national median listing price was $430,000 in June, down 2.5% year-over-year. It marks the eighth consecutive month of year-over-year asking price decline.

Falling asking prices may be a sign that sellers are becoming more flexible. Rather than holding out for pandemic-era prices, they're adjusting to current market conditions, giving buyers more opportunities to negotiate and some welcome relief on price.

1. More sellers are cutting prices

An increase in price cuts is an encouraging sign for buyers. In June, about 18.8% of active listings had a price reduction, suggesting that more homes are sitting on the market longer and sellers may be becoming more willing to negotiate.

Buyers can use that information to their advantage. A home's price history, the number of days it has been on the market and any previous price reductions can all help you gauge how much negotiating power you have.

If a property has been listed for several weeks or has already seen multiple price cuts, you may have room to negotiate a lower purchase price or ask the seller to cover closing costs, pay for repairs or offer other concessions.

2. Buyers have more homes to choose from

According to the report, active home listings increased 1.9% year over year and 4.1% from May. More homes on the market give buyers more options and reduce the pressure to make rushed decisions or waive important protections, such as a home inspection.

Increased inventory can also reduce competition, making bidding wars less common and giving buyers more room to negotiate. Even so, inventory remains below pre-pandemic levels nationally, and conditions vary widely by region.

In the South and West, active listings now slightly exceed pre-pandemic levels, giving buyers considerably more choice. In contrast, the Northeast continues to face a significant housing shortage, with active listings still 47.3% below pre-pandemic levels, the largest inventory gap in the country.

3. Homes are no longer taking longer to sell

For the past 26 months, homes took longer to sell than they had a year earlier, but that trend leveled off in June. The median home spent 53 days on the market, unchanged from the same month last year. While homes aren't lingering longer than they were a year ago, time on the market remains an important indicator for buyers.

A home's listing history can provide valuable clues about a seller's motivation. Properties that have been on the market for 60 days or longer may be overpriced or attracting less buyer interest, making sellers more open to negotiating. Even homes that have been listed for 30 days without an offer may present opportunities to ask for a lower purchase price, seller-paid closing costs or other concessions.

Rather than focusing only on the asking price, look at how long the home has been listed, whether the price has been reduced and how similar homes in the area have sold. Together, these factors can help you decide how aggressive to be with your offer.

4. The summer slowdown could work in your favor

Buyers shopping this summer may have another advantage: the seasonal slowdown. Housing activity often cools in July as vacations, family schedules and the back-to-school season pull attention away from home shopping. June's increase in price reductions and slower pace of new listings suggests that seasonal shift may already be underway.

A slower market can give buyers more breathing room to compare homes, negotiate with sellers and avoid the intense competition that's common during the spring buying season.

If listings continue to linger on the market and price reductions become more common, buyers may find even more opportunities to negotiate on price, closing costs or other seller concessions.

5. Your local market matters most

While buyers have more room to negotiate in many parts of the country, market conditions still vary widely by region. Since the national price peak in June 2022, asking prices have fallen 7.3% in the West and 3.5% in the South.

In contrast, asking prices have continued to rise, increasing 10% in the Midwest and 12.6% in the Northeast.

That's why national housing headlines only tell part of the story. Before making an offer, research what's happening in your local market. Review recent comparable sales, track how long homes are staying on the market and pay attention to price reductions in the neighborhoods you're considering.

A local real estate agent can also help you understand current market conditions and advise how aggressively to negotiate.

How to use your leverage when making an offer

Knowing you have more negotiating power is only half the equation. Using that leverage strategically can help you secure a better deal without stretching your budget. Before making an offer, keep these tips in mind:

• Research comparable sales. Look at recent sales in the neighborhood, how long the home has been on the market and whether the seller has already reduced the asking price. These details can help you determine how competitive your offer needs to be.
• Lean on your real estate agent. A local agent can provide insights into market conditions, recent comparable sales and the seller's negotiating position to help you decide on a fair offer.
• Negotiate more than the price. Depending on the market, you may be able to ask the seller to cover closing costs, make repairs before closing or provide credits after the home inspection.
• Don't rush to waive contingencies. Unless you're competing in an exceptionally hot market, think carefully before giving up protections such as a home inspection just to strengthen your offer.
• Keep affordability first. More negotiating power doesn't automatically make a home affordable. Before shopping, determine how much home you can comfortably afford based on your income, expenses and long-term financial goals. If a home still stretches your budget after negotiations, it's better to walk away than overextend yourself financially.

Your mortgage interest rate plays a major role in your monthly payment.

Use the tool below, powered by Bankrate, to compare today's top mortgage offers:

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Planning a family reunion takes more than booking a venue and sending invitations. Every successful reunion needs organizers, memory keepers and people who bring everyone together. It's those different strengths that turn a single gathering into a tradition families look forward to for generations.

Take this quick quiz, inspired by our story about a family that's kept its reunion going for more than 40 years, to discover the role you could play in planning your own family's next reunion.

More on Family Gatherings:

• I'm Treating My Kids and Grandkids to a Greek Cruise, But My Son Can't Go. Do I Owe Him a Check to Keep Things Fair?
• Hosting a Family Reunion? 10 Essentials for a Lasting Legacy
• The Inheritance Your Kids Need More Than Money — and 5 Ways to Pass It On
• How to Plan a (Successful) Family Reunion
• We're 78 and Want to Use Our 2026 RMD to Treat Our Kids and Grandkids to a Vacation. How Should We Approach This?
• Use Your Next Vacation to Explore Your Roots

Mark Twain said, "Never put off till tomorrow what may be done day after tomorrow just as well." Coming from a long line of procrastinators, that sentiment rings true. It was also my approach to retirement. I put off the decision again and again.

Until now.

After spending much of my career writing about retirement, I finally decided it was time to start living it. I assumed I was prepared. I had spent years researching the topic, interviewing experts and helping others think through one of life's biggest transitions.

Then I turned in my retirement notice.

What I expected to feel was relief. What I felt seemed more like loss. The experience hit me much harder than I anticipated. In fact, I went through a brief period of sadness that caught me completely off guard.

Retirement looked very different in practice than it did in theory. For the first time, I realized that preparing financially and preparing emotionally for retirement are not the same.

When your identity changes

You can say labels don't matter, but the truth is they do. For most of my adult life, I've been an employee, a writer, a colleague and a contributor. Soon, my title will change to retiree.

Am I old enough? Yes. Have I saved enough? I think so. Am I ready to become the smiling older man walking on a sandy beach? I know too much about retirement marketing to be on the cover of that brochure.

What surprised me most was how much of my identity was connected to my work.

My office sits on the corner of a busy hallway. I only have to turn toward the door to see who is walking by. Throughout the day, colleagues stop in to share stories, kick around ideas, celebrate successes or talk through challenges. There have been plenty of laughs, more than a few crises averted and countless conversations I'll miss.

Retirement means stepping away from more than a job. It means stepping away from a community and a daily rhythm that has been part of my life for decades. Recognizing the stages of change can help make sense of the transition.

In his Bridges Transition Model, researcher William Bridges describes three transitions people go through during major life changes:

• It starts with an ending
• Then comes the neutral zone, the period between an old identity and a new one
• Finally, there is a new beginning, ideally bringing with it renewed energy and optimism for the next chapter

Replacing more than a paycheck

I'll miss getting a paycheck.

I've received one every other Friday for decades. Like an old friend, that ritual is comforting and easy to take for granted.

What surprised me is that a paycheck isn't just income. It's reassurance. Every other Friday, money quietly appears in my account and confirms that everything is working the way it's supposed to.

Retirement asks you to replace not only the income but some of that confidence as well. That's one reason many retirees build strategies around reliable sources of income.

Depending on individual circumstances, annuity products can help create a stream of guaranteed^* income that works alongside other retirement assets and withdrawals. A financial professional can help you develop a customized strategy.

Learning Medicare's lessons

I'll be on Medicare.

After years of relying on employer-sponsored health insurance, I found researching Medicare to be a maze of parts, enrollment periods, deadlines and rules. A qualified insurance agent helped me navigate the process and reminded me that Medicare is anything but free.

Fidelity estimates the average 65-year-old couple will spend roughly $12,850 on healthcare during their first year of retirement. And that doesn't include long-term care expenses.

The lesson is simple: Build room in your retirement budget for healthcare costs.

Building a new community

According to the Holmes-Rahe Life Stress Inventory, retirement ranks ninth — tied with marital reconciliation — among the 43 most stressful life events measured by the scale.

In my case, retirement is accompanied by a move, which is also on the list. While I'll be closer to extended family, I'll also be leaving behind a network of workplace relationships and social connections.

I'll be looking for some new friends, and the best remedy is to get busy. Volunteering and community involvement are how many retirees build new relationships. Ken Dychtwald, founder and CEO of Age Wave, recently suggested society could benefit from an Elder Corps — something like the Peace Corps for retirees.

My own plans include joining Toastmasters, participating in a book club, spending time at a health club, reconnecting with my college alumni association and enjoying my son-in-law's boat.

I should probably let him know about that last one.

The point is to actively seek connection and avoid isolation and loneliness.

I'll get Monday mornings off

For years, the iconic ticking stopwatch from 60 Minutes triggered my Sunday scaries, shifting my mindset from weekend relaxation to work responsibilities. While I look forward to no longer caring whether it's Sunday or Monday, maintaining a schedule can provide structure and purpose.

My father, who spent nearly 30 years in retirement, opened an antique shop after a successful engineering career. He didn't sell much, but he had a place to go every day and a community of regulars and friends.

Turning a passion into a purpose can provide a reason to get up each morning while you're still finding your footing.

Appreciating the gift

Advances in medicine, healthcare and technology are steadily increasing life expectancy. Longer lives are not simply adding years to the end of life — they are reshaping how people think about retirement and the opportunities it presents.

What I've come to realize is that retirement isn't a single event, it's a transition.

I've spent years focused on the financial side of leaving the workforce. What surprised me was how much emotional preparation was required as well.

From the moment people start saying congratulations to the realization that you're now on your own path, retirement becomes a new life story.

Retirement marks an important new chapter of my life. The trick is to turn fear into curiosity and anxiety into possibility.

Like most meaningful transitions, it isn't something you fully understand until you start experiencing it.

* Guarantees are backed by the claims-paying ability of the issuing insurance company.

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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.

A lot of financial advice treats every stage of life the same, with a checklist repeated with bigger numbers.

This guide walks through what tends to matter most in your 30s, 40s, 50s and 60s.

We'll cover which decisions carry the most weight and what deserves attention at each stage of life.

Financial priorities in your 30s

Higher income in your 30s rarely creates as much breathing room as people expect.

The extra money usually disappears into rent upgrades, childcare, weddings and student loans.

Here's what to do:

• Track what's coming in and what's going out.
• Build an emergency fund. Three to six months of essential expenses can change how a layoff, medical bill or major repair hits a person financially.
• Start retirement savings early, even if the amount feels small. Get the full 401(k) match if you have one. Without a workplace plan, consider an IRA.
• If someone depends on your income, ensure you have term life and disability insurance.
• Prioritize high-interest debt first. After that, the best payoff system is usually the one you'll stick with.

The systems you automate here tend to follow you for decades.

Jeffrey Zhou, CEO and founder of Fig Loans, works with borrowers building credit and rebuilding financial consistency over time.

"The biggest financial improvements usually come from consistency, not intensity," Zhou says. "People tend to underestimate how much automatic savings, recurring payments, and predictable routines compound over a few years."

Financial priorities in your 40s

This is the decade in which people often look financially successful while feeling stretched all the time.

Conrad Wang, managing director of EnableU, works with businesses and households navigating long-term financial and operational planning.

"The people who struggle most financially in their 40s usually aren't reckless spenders," Wang says. "They're carrying too many fixed obligations at the same time. Bigger mortgages, kids' expenses, aging parents and higher insurance costs. The pressure comes from how many things become non-negotiable at once."

David Kolodny, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"Financial complexity increases significantly in your 30s and 40s." Kolodny says. "You're managing an increasing set of personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: They stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

A few priorities start carrying more weight here:

• Retirement contributions need to increase. Aim for roughly three times your salary saved by age 40 and about six times by age 50, although real life rarely follows those benchmarks perfectly.
• Avoid stagnation. A contribution rate that stays frozen for ten years becomes difficult to recover from later.
• A 529 plan can provide tax advantages and flexibility if education funding is part of the plan. The IRS keeps a straightforward overview of qualified tuition programs and eligible expenses.
• Investment allocations deserve more attention now. A portfolio built entirely around aggressive growth at 31 might not fit the same way at 47. Rebalancing matters because markets distort risk exposure over time.
• Estate planning usually gets delayed too long here because people associate wills and powers of attorney with retirement. In reality, this is often when they become necessary.

Make sure documents reflect current life circumstances instead of the version of your life that existed 12 years ago.

Financial priorities in your 50s

Retirement starts feeling close in your 50s. That changes the weight of financial decisions very quickly.

This is usually peak earning territory, which makes the decade important.

A few strong years can materially improve retirement flexibility.

A few careless ones can create pressure later that's difficult to recover from.

Phil Santaro, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"The 40s are when financial complexity compounds faster than income does," Santoro says. "You're managing personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: they stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

In your 50s, protection starts mattering more. Pay more attention to volatility, taxes, withdrawal sequencing and how much market risk your future retirement income can realistically absorb.

A health savings account (HSA) paired with a high-deductible health plan can create meaningful tax advantages for future medical costs. Long-term care deserves attention, too; 70% of people turning 65 today will need some form of long-term care during their lives.

Mortgage decisions become more nuanced during this decade, as well.

Some people prioritize entering retirement debt-free because the psychological relief matters to them. Others prefer keeping more liquidity available and investing excess cash elsewhere. There is no universal answer.

Before retirement gets too close, it also helps to stress-test spending.

Try living for a few months on the income level you expect later, and save the difference.

Financial priorities in your 60s

One bad stretch of market withdrawals early in retirement can weaken a portfolio faster than most people expect because the account is no longer just compounding in the background.

A few decisions start carrying outsize weight:

• Delaying Social Security beyond full retirement age increases monthly payments by roughly 8% annually up to age 70, but the right timing depends on health, cash flow and household needs.
• Withdrawal order affects how much income gets exposed to taxes over time, especially once required minimum distributions (RMDs) begin.
• Medicare enrollment mistakes, coverage gaps and income-related premium surcharges can become expensive quickly.

The large family house that once made sense can start feeling expensive, empty or exhausting to maintain.

Sometimes downsizing is about unlocking equity and simplifying daily life.

Estate plans deserve another serious review here, as well. Your paperwork should reflect your current reality, not the version of your life from 15 years ago.

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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.

Financial planning used to be singularly focused on accumulation, but a paradigm shift has now pushed the focus more on intentionality. Money is a tool that can be used to build a life you can enjoy, which means planning for your ideal future.

That's not to say money isn't important. Make no mistake about it, money can make life easier. Constantly fretting about getting basic needs met is exhausting. But true wealth is about more than money and goes far beyond basic needs. It's less about getting "stuff" and more about a life well lived. Money is a tool in the pursuit of that life.

Prioritize time over things

Acquiring stuff can sometimes feel good and can certainly result in a temporary dopamine hit. But research from the University of Texas at Austin indicates that spending on experiences, such as travel, dining or cultural events, yields greater immediate and lasting happiness compared to material purchases, regardless of cost.

Some families are opting for experiences over possessions, less time commuting and more time connecting. That shift can often lead to greater happiness and lower expenses.

Money is limited, but so is time

Essentially, the question becomes, what brings people joy? The research suggests it's experiences, not stuff, that can prompt lasting happiness. Consequently, time becomes a more valuable commodity than money, in that time well spent leads to contentment.

It's a nuanced argument. Research by Killingsworth, Kahneman, and Mellers suggested that for a large percentage of people, happiness increases as income does. While that might be a byproduct of basic needs being met, the research also suggested that, instead of money increasing happiness, it might decrease unhappiness instead.

But chasing money in an effort to find happiness and disregarding the very real joy that can stem from time spent with loved ones is a mistake many people make. Instead, people should strive for balance, using money as a tool to grant them more time for the things they enjoy.

Redefine success as freedom

Whether it's working fewer hours, taking a sabbatical or saying yes to a passion project, the new dream is control over how you spend your days, not how much you can earn. True success simply isn't measured by the amount of money in your bank account. It's measured by how easily you can pursue your passions and make a difference in your community.

While it's true that money can help you achieve a lifestyle that allows you to live with purpose, far too many people have trouble making the shift from acquisition of assets to living the life made possible by those assets. A financial plan that sets the path toward a life of freedom can't be all about numbers; it also must take into consideration each individual's definition of "freedom."

For some, that might look like traveling the globe in luxury. Others might want to stay close to home, supporting their community through intentional philanthropy. Whatever freedom looks like to you, there's a path toward it.

Well-earned freedom doesn't happen accidentally. But it can happen with some careful planning.

It starts with clarity

Reimagining your ideal life begins with asking what really brings joy. If you can see a vision of your ideal life, you can set the goals necessary to obtain it.

Ask yourself this question: "What does a perfect day look like?" Take time to imagine it without putting restrictions on the vision. Focus on the perfect day without any consideration of money sitting in your bank account. Focus on what factors of your imagined perfect day bring you the most joy.

Once you have your vision, ask yourself the next question: "How do I get there?" It's not a question you have to answer alone. Share your vision for an ideal life with your financial adviser. Together, you can create a plan that sets you on the path toward your vision.

Financial plans that align with your answers will always feel more rewarding and more sustainable. Knowing what the goal is, and how to get there, can be incredibly motivating.

Leading with joy

In my practice as a financial adviser, I start conversations with clients by asking them an important question: "What did you do today that brought you joy?" It's a way to quickly learn about what's important in a person's life and, in turn, what our focus should be for them.

Joy should be at the forefront of any discussion about money and the future. Planning for a purposeful future that brings joy is a way to start setting the foundation to reach that ideal future eventually, and live the life you've dreamt of.

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

If AI is helping financial advisers save time and become more efficient, investors should be asking a simple question: Who benefits from that efficiency?

What if your financial adviser suddenly started taking on twice as many clients? A year ago, that question would have sounded hypothetical. Today, it's entirely plausible.

Artificial intelligence is rapidly changing the economics of the financial advice business. The biggest brokerage firms and financial institutions on Wall Street are openly celebrating how AI will help them cut costs, increase adviser productivity and onboard more clients without adding staff.

According to Bloomberg, JPMorgan CEO Jamie Dimon said the bank's roughly $2 billion annual investment in AI is already producing billions in benefits and cost savings.

Business Insider reported that Dimon pointed to AI-driven savings from reduced headcount, productivity gains and operational efficiencies, while describing the benefits as only "the tip of the iceberg."

What's missing

Conspicuously absent from this reporting was any meaningful discussion about how AI would improve the client experience. That's where the conversation stops being about technology and starts being about ethics.

That became clear to me during a recent podcast conversation with Jeff George, CFA and founder of TAO Financial, an independent fee-only fiduciary adviser who is a member of my Wealthramp network. Like many advisers, Jeff has begun integrating AI into his practice.

Jeff explained he's using AI to help organize research, prepare for client meetings and capture notes during conversations (without sharing personal information).

The note-taking capability, in particular, has changed how he works with clients. Instead of dividing his attention between listening and documenting, he can focus entirely on the conversation and review a detailed record afterward.

That's a meaningful improvement in the client experience because the efficiency allows him more face time with clients.

What Jeff does not do is allow AI to participate in the part of the process clients are paying him for.

"I don't allow AI to influence anything that requires independent judgment," he told me. More telling was what came next: "I believe that clients are hiring me for my advice and that they want my brain. And if I'm using AI to build financial plans, then what are they really paying for?"

Jeff's guardrails are surprisingly straightforward:

• He won't allow AI to recommend portfolio changes, determine withdrawal strategies or make planning recommendations that require professional judgment
• He won't upload client information into public AI tools
• He won't accept AI-generated conclusions without verifying the underlying sources himself
• He won't present AI-generated output to a client as if it were his own analysis

Those guardrails aren't just a reflection of Jeff's approach to AI. They highlight a much bigger issue for investors.

Too much information can overwhelm

Most people who reach out to me to find fiduciary advisers aren't suffering from a lack of information. If anything, they're overwhelmed by it. They've read articles, listened to podcasts, watched YouTube videos and increasingly experimented with AI themselves.

What they still don't know is whether they can afford to retire, whether they're taking too much risk, whether helping an adult child will jeopardize their own future or whether they're making a costly mistake they can't see.

Those are judgment problems that require decisions to be made with full context.

Two investors can have identical portfolios, identical incomes and identical account balances and still need completely different advice because they're solving different life problems. One might be caring for an aging parent.

Another could be supporting grandchildren. One might be terrified of running out of money. Another could need permission to spend more freely. The facts might be the same. The advice should not be.

This is where I think the AI conversation sometimes goes off track.

People often ask whether AI will replace financial advisers. Increasingly, I hear a different version of the question: If consumers have access to the same AI tools, why hire an adviser at all?

It's a fair question.

Consumers can absolutely use AI to become better-informed investors. They can ask smarter questions, learn unfamiliar concepts, compare strategies, explore retirement scenarios and organize information far more efficiently than ever before. Used thoughtfully, AI can be a powerful financial education tool.

But information and advice aren't the same thing.

Jeff described that tension perfectly. Used appropriately, AI can handle the blocking and tackling of running an advisory practice — organizing information, managing workflows, documenting conversations and performing preliminary research.

That frees advisers to spend more time doing work that actually requires experience, context and judgment.

But he also acknowledged the slippery slope. At some point, every adviser will face a choice between using AI to serve clients better and using AI to serve more clients. Those aren't necessarily the same thing.

That's why I believe consumers need to ask a different set of questions. Instead of asking whether an adviser uses AI, find out how you benefit from it. Ask:

• What safeguards are in place to ensure AI supports rather than replaces personalized advice?
• Is confidential information is ever entered into public AI systems?
• What decisions are never delegated to technology?
• How will the adviser's use of AI improve your experience as a client?

This should become part of your adviser vetting process, because their answers will reveal where most of the benefits of AI are flowing — to you or to their firm.

Financial advice has always been an industry where consumers had to look beyond marketing claims to understand what they were really buying. AI doesn't change that reality. If anything, it makes the distinction between outstanding fiduciary advisers and sales-driven advisers easier to see.

The advisers who stand out in the next decade won't necessarily be the ones using the most sophisticated technology. They'll be the ones who can clearly explain how they're using it, why they're using it and where they draw the line.

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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.

Luxury cars, designer handbags and sprawling homes often dominate conversations about wealth. But many people with strong finances don't fit that stereotype at all.

Instead, they're quietly building wealth behind the scenes by making intentional spending decisions, investing consistently and resisting the pressure to keep up with everyone else. This approach is commonly known as stealth wealth, and it's becoming increasingly popular among younger professionals and families who value financial independence over outward displays of success.

Rather than spending to look wealthy, stealth wealth focuses on actually becoming wealthy. If any of these habits sound familiar, you may already be practicing stealth wealth without realizing it.

What is stealth wealth?

Stealth wealth is the practice of building and maintaining wealth without advertising it through expensive possessions or lavish spending. The term has been around for decades, but it's gained renewed attention as more people pursue financial independence, embrace minimalism and question the pressure to constantly upgrade their lifestyles.

Part of the appeal comes from today's economic reality. Higher housing costs, inflation and economic uncertainty have prompted many households to prioritize long-term financial security over appearances. At the same time, social media has made it easier than ever to compare lifestyles, making the decision to quietly build wealth feel almost countercultural.

The common thread is simple: your financial success doesn't have to be visible to everyone else. Here are seven common signs that you might be practicing stealth wealth without realizing it.

1. You keep your lifestyle in check when your income grows

One of the biggest obstacles to building wealth is lifestyle inflation.

It's tempting to celebrate every raise or bonus with a nicer apartment, luxury vehicle or more expensive vacations. While there's nothing wrong with enjoying your success, automatically increasing your spending every time your income rises can leave you feeling like you're earning more without actually getting ahead.

People who practice stealth wealth often do the opposite. They continue living comfortably on their existing budget while directing much of the additional income toward retirement accounts, brokerage accounts, debt repayment or savings goals.

Even saving or investing half of every raise can dramatically increase your long-term wealth while allowing your lifestyle to improve gradually over time.

Use the tool below to connect with a financial adviser who can help you build a plan based on your financial goals:

2. You drive your car long after it's paid off

For many households, a vehicle is one of the largest monthly expenses after housing. Instead of replacing a perfectly reliable car every few years, stealth wealth practitioners often keep driving it long after the loan is paid off. They continue setting aside what would have been their monthly payment or redirect those funds toward investing.

Keeping a dependable car for several extra years can save thousands in monthly payments, depreciation, higher car insurance premiums and registration costs. Recognizing that extending the life of a paid-off car often creates far more financial flexibility than upgrading simply because you can.

3. You prioritize retirement over status symbols

Stealth wealth is often invisible because much of the money goes somewhere people can't see.

Instead of spending thousands on luxury purchases, these individuals consistently contribute to retirement accounts like a 401(k) or IRA. They may also increase contributions each year or invest additional money in taxable brokerage accounts.

The tradeoff can feel boring in the short term. Friends may notice someone else's new luxury SUV, but they won't notice an extra $10,000 invested for retirement. Over decades, however, consistent investing and compound growth typically have a much greater impact on long-term financial security than expensive purchases that quickly lose value.

4. You buy for value, not to impress

Practicing stealth wealth often means focusing on value over status as opposed to always buying the cheapest option. That could mean purchasing high-quality shoes that last for years, durable kitchen appliances with excellent warranties or classic clothing that won't go out of style next season.

Many financially successful people are willing to spend more when quality genuinely saves money over time, but they aren't interested in paying extra simply because a product carries a luxury logo.

This mindset encourages thoughtful purchases rather than emotional ones and reduces the cycle of constantly replacing lower-quality items.

5. You avoid financing discretionary purchases

Credit can be a useful financial tool, but stealth wealth practitioners are often cautious about financing wants instead of needs. Rather than putting vacations, furniture, electronics or luxury goods on long-term payment plans, they may delay the purchase until they can comfortably pay for it in cash.

Waiting has two benefits. First, it eliminates interest costs that make discretionary purchases even more expensive. Second, it creates time to determine whether the purchase is something you truly value or simply wanted in the moment.

Delaying gratification isn't always exciting, but it often leaves more money available for investing and other long-term goals. While you're saving for a major purchase, keeping that money in a high-yield savings account can help your balance grow while you wait.

Use the tool below, powered by Bankrate, to compare today's top savings account offers:

6. You don't feel the need to broadcast your spending

Social media has made it easy to showcase expensive vacations, new homes and luxury purchases. But it has also fueled comparison and the pressure to keep up.

People practicing stealth wealth often take a different approach. They don't feel compelled to post every purchase or use spending as proof of success.

That's not because they're trying to hide their finances. Rather, they understand that financial confidence comes from meeting personal goals and not from collecting likes or impressing strangers online. Ironically, many genuinely wealthy individuals live far more modestly than people assume because they aren't interested in turning their finances into public content.

7. Your net worth is growing faster than your spending

Perhaps the clearest sign you're practicing stealth wealth is that your assets are growing faster than your lifestyle. Each year, your retirement accounts, investments, home equity or savings balances increase while your spending remains relatively stable. Instead of measuring success by what you own, you're measuring progress by your financial foundation.

This implies that building wealth takes priority over constantly upgrading your lifestyle. Over time, this gap between growing assets and controlled spending can create greater financial independence and more choices about how you live and work.

The goal isn't to look poor — it's to build wealth

Stealth wealth is all about making intentional financial decisions that reflect your priorities instead of other people's expectations.

You can still enjoy vacations, buy things you love and celebrate milestones along the way. The difference is that your spending aligns with your long-term goals rather than social pressure.

In a culture that often encourages people to spend first and save later, quietly building wealth may not attract much attention. But over time, it can provide something far more valuable than appearances: financial freedom, flexibility and peace of mind.

What kind of stealth wealth builder are you? Take the quiz to find out.

Related Content:

• I'm a Financial Planner: To Beat Inflation and Build Wealth, This Is the Strategy You Need
• Seven Secrets to Building Wealth (That You Can Implement Today)
• The Smart Way to Retire: 13 Habits to Steal From the Wealthy

Building wealth isn't about your age, income or whether you drive a luxury car. It's about making intentional decisions with your money that can help set you up for long-term financial success.

Curious what your spending and saving habits say about you? Take this quick seven-question quiz to discover your stealth wealth personality and find out what kind of saver and spender you are.

Building wealth doesn't happen overnight, but having the right plan can make all the difference.

Use the tool below, powered by Bankrate, to connect with a financial adviser who can help you build a personalized strategy to reach your financial goals.

More on Building Wealth:

• The Wealth-Building Roadmap That Works at Any Age
• Passive Income: How the Ultra-Wealthy Build Wealth While They Sleep
• These 5 Rules Separate the Rich From Everyone Else
• How to Manage Money Like a Millionaire (Even If You’re Not One Yet)
• 6 Strategic Moves to Keep Growing Your Wealth After You Retire
• Average Net Worth by Age: How Do You Measure Up?

If you've ever boarded a flight hoping no one would take the middle seat next to you, United Airlines is turning that wish into a premium upgrade.

The airline announced a new Economy Plus seating option that permanently replaces the middle seat with a fixed table, giving two passengers significantly more personal space. The feature will debut on United's new Airbus A321XLR aircraft, which will begin entering the fleet later this year.

United hasn't announced pricing yet, but the new option reflects a growing trend in air travel. Rather than raising ticket prices across the board, airlines are increasingly creating premium add-ons that let travelers pay for the comforts they value most.

How United's new Economy Plus seating works

The new seating option will only be available in Economy Plus, United's extra-legroom economy cabin.

Instead of a traditional three-seat row, United has designed one specially configured row per aircraft where the middle seat is permanently replaced by a fixed shared table. The result is more personal space for both passengers seated on either side.

Along with the additional elbow room, travelers will still receive the three extra inches of legroom that come with Economy Plus seating.

The new configuration will first appear on United's Airbus A321XLR aircraft, which are expected to begin flying select domestic routes this fall before expanding to international service.

Unlike temporary blocked middle seats used during the pandemic, this is a permanent cabin design intended to create a more comfortable premium economy experience.

Why is United charging for an empty middle seat?

United's new seating option is part of a broader trend in the airline industry: giving travelers more opportunities to customize their flight for an additional fee.

Instead of raising ticket prices for everyone, airlines have increasingly introduced optional upgrades that passengers can choose based on what matters most to them. Checked bags, preferred seat assignments, extra legroom, early boarding and in-flight Wi-Fi have all become common add-ons over the past decade.

An empty middle seat is simply the latest comfort upgrade travelers can buy.

The timing also makes sense. Airlines have reported that demand for premium travel continues to outpace standard economy, with more passengers willing to pay extra for added comfort, especially on longer flights. By offering a more spacious Economy Plus experience, United can appeal to travelers who aren't ready to pay for business class but still want a more comfortable journey.

Who should actually pay for it?

Like most airline upgrades, the value depends on who's traveling and how long you'll be in the air.

It may be worth paying for if you're:

• Traveling as a couple. Two people traveling together can enjoy the extra room without sharing space with a stranger.
• Flying with a young child. The fixed center table provides a convenient place for snacks, coloring books, tablets and other travel essentials.
• Over six feet tall. The combination of extra shoulder room and additional legroom could make a noticeable difference on longer flights.
• Traveling for business. If you plan to work during the flight, having extra elbow room and a dedicated surface can make using a laptop much more comfortable.
• Taking a long-haul international flight. The longer you're seated, the more valuable additional space becomes.
• Working on a laptop. Even outside of business travel, anyone hoping to be productive during the flight may appreciate the less cramped workspace.

It may not be worth the extra cost if you're:

• Taking a flight that's less than two hours.
• Traveling solo on vacation and simply looking for the lowest fare.
• Trying to stick to a tight travel budget.

For many short domestic flights, the upgrade may not provide enough additional value to justify the added cost.

How much could it cost?

United has not announced pricing for the new seating option. However, current Economy Plus pricing provides some clues about what travelers might expect.

Today, upgrading to Economy Plus typically costs anywhere from around $20 to more than $200, depending on the route, flight length and demand. Exit-row seats and preferred seats often carry premiums ranging from roughly $20 to $100 or more, particularly on busier flights.

Because United's new option combines Economy Plus legroom with a guaranteed empty middle seat, it's reasonable to expect pricing above a standard Economy Plus upgrade. Longer international routes will likely command higher premiums than shorter domestic flights.

Until United releases official pricing, though, any estimates remain speculative.

How does it compare with other airlines?

While the concept is new for United, it's not entirely new to the airline industry.

Frontier Airlines already offers UpFront Plus, a premium seating option near the front of the aircraft that guarantees passengers an empty middle seat for an additional fee.

The idea also resembles the Eurobusiness cabins used by many European airlines. Rather than installing larger business-class seats, those carriers often create a premium cabin simply by blocking the middle seat in standard economy rows.

United has taken that concept one step further by replacing the middle seat with a permanent table instead of simply leaving it empty.

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Remember the days of blinking in-store coupon dispensers and thick, mailbox-clogging booklets full of grocery discounts? Depending on where you live, that might still be your weekly reality.

But those days are fading fast, as rising print costs and falling newspaper circulations push glossy inserts into history. Yet the need to save on food costs is stronger than ever — especially since strategic couponing can still slash roughly 17% off the average grocery run.

That's where the grocery store surprise bags come in.

If you're familiar with the mystery liquidation bundles at flea markets or online auctions, you might already know how it works: stores sell a grab bag of goods, and you reap the discounts.

Now, traditional grocery stores are getting in on the action — cutting retail prices by 50% to 75% on leftover inventory through smartphone apps.

But there's a catch: What you save in cash, you pay for in scarcity, variety, and relative value. To see if the tradeoffs are worth it, I bought a grocery store surprise bag on a popular app so you don't have to navigate these "surprise taxes" alone. Here's what I found.

This article is not a sponsorship or an endorsement of any particular product. Information is provided for educational purposes only.

What are grocery store surprise bags?

At their core, grocery surprise bags are mystery bundles of surplus produce, baked goods, and canned or boxed items sold at steep discounts. The premise is simple. You buy leftover inventory to avoid paying premium prices, and the stores successfully curb their food waste.

Here's how the process works:

1. Download the app. You install a surplus food app on your smartphone.
2. Find nearby stores. You enter your location to view nearby participating grocery stores, bakeries, and markets. I was surprised (pun intended) to find major national chains like Whole Foods and The Fresh Market alongside local independent shops.
3. Reserve and pay. When you spot an available surprise bag in your area, you reserve and pay for it directly through the app.
4. Pick up. Each store has a dedicated pickup window. You simply arrive during that timeframe, show the clerk your digital receipt, and claim your bag.

For my experiment, I chose Too Good To Go, the app that popularized the term "Surprise Bag" for grocery mystery bundles and has over 120 million registered users worldwide. The app's website also states that its bag prices are "roughly a third of the original price," which I was eager to test firsthand.

My experience buying a grocery store surprise bag

With traditional coupons, you know exactly what you're buying. With a surprise bag, you surrender all control over the contents, condition, and variety of the food.

So when I purchased a surprise grocery bag for the first time, I was somewhat skeptical about whether it would be truly "worth it."

Would I get a random collection of unusable items? Would the food be stale, expired, or overvalued by the app?

To find out, I purchased a "Bakery Surprise Bag" from The Fresh Market (one of two major grocers in the area on the Too Good To Go app). The bag promised $30 worth of food for just $10 (plus sales tax).

Then I went for pickup. I arrived during the designated 10 a.m. to 6 p.m. pickup period and showed my order to the store manager, who verified my bag type and retrieved my haul from the back.

After that, I managed a quick Q&A to see how the system worked on their end. This is roughly how the conversation went:

Me: When are the bags put together?
Store manager: Every morning. They sell out fast, usually between 7 am and 8 am (I had purchased my bag at 8:30 am that morning).

Me: How much are they worth?
Store manager: They're worth a lot. I think it's $35.

Did you catch that? The bag was supposed to be worth $30, not $35. Apparently, I was already receiving a more valuable bag than anticipated, which probably explains why the store had a 4.8-star rating (out of 5) on the app.

But, to my disappointment, the store manager couldn't tell me exactly when the items were baked. For that, I needed to inspect the items thoroughly (oh, darn…taste test time).

Here's what I got

List of what I received (from left to right):

• Peach Creme Challah
• Rustic Italian Bread
• Sweet Hawaiian Dinner Rolls (12-count)
• Blueberry Muffins (4-count)

A quick inspection at home revealed that everything was stamped with that exact day's sell-by date.

Fortunately, because baked goods don't spoil immediately, this still gave my family a comfortable two- to five-day window to enjoy the breads and pastries. Nothing was stale, and everyone agreed the selection was delicious — especially the blueberry muffins (seriously, they were incredibly moist).

In the end, the items tasted nice (and we could eat them comfortably before they expired), but questions about the value remained. What was the true worth of all these items?

Are they surprise bags worth it? The value of what you get

To verify the app's claims of $10 for $30 (or the manager's $35), I tallied up the standard retail pricing of the items I received according to their printed labels.

The verdict? The value is absolutely there. For a family of four, this bundle was perfect for quick breakfasts, easy dinner sides, and fun snacks in between meals. I also think a bag like this would work well for larger families, weekend brunches, or busy parents looking to feed their kids after school.

And because baked goods freeze well, slicing and individually packing these items for a solo saver or seniors on a budget can stretch this $10 mystery bag into weeks of high-quality baked goods. Therefore, from a strict dollar-value standpoint, the deal is bound to save shoppers money.

Why I won't do it again: The 'surprise tax'

Even though I loved the quality and value of my haul, first-time users should be aware of a few hidden logistical "taxes" — what I call the "surprise tax" of a grocery surprise bag.

These are the factors that sap time and energy, ultimately souring the deal for some shoppers (including me).

1. The scarcity tax

Grocery bundles sell out fast — like really fast. At least, that's how it went on the app that I used. If you don't happen to be looking at your phone the exact time a bag is "dropped," you might find nothing but "sold out" banners when you finally click in. This happened to me multiple times the first night I tried to snag a bag. Shoppers on Reddit have also expressed this deep frustration over missing out on bags, leading some to give up entirely.

2. The variety tax

Because you can't choose the inventory, you risk getting repetitive items. I only bought one bag, but other shoppers have reported receiving the same items multiple times in a row or even products past their expiration date. The app can also be discouraging if you have a food allergy, since few places on the app in my area offered allergy-friendly "Surprise Bags."

3. The relative value tax

The "savings" may be lower than your local grocer's prices. For example, if you're used to buying your blueberry muffins from Walmart, a 4-count might cost around $4.98. That's about $2 cheaper than the retail price of the muffins I received, and I didn't get to choose my flavor or check the expiration date. Plus, some grocery app users have reported receiving bags filled with items that were already marked down on clearance shelves, making the actual "retail value" lower than advertised.

The bottom line

Would I get it again? No.

Although grocery surplus apps are wildly popular, the industry is still growing. Even Too Good to Go, regarded as the market leader, doesn't quite have the coverage it needs yet in many suburban and rural areas.

For example, my closest participating grocery store chain was about a 25-minute drive away (mind you, there were several participating restaurants, however). Spending almost an hour by car burned gas and time, which quickly ate away at the $25 savings margin on my groceries. Combined with the "surprise tax," that tradeoff just isn't worth it to me at this time.

However, if you live in an area with closer shops and find it easier to snag a grocery surprise bag, there are definite savings.

After all, average weekly savings through couponing reaps $5 to $10 (per the Credit Union report), but if you buy multiple surprise bags, you could save $25 to $75 per week.

Either way, the next time you see a shopper flash their phone at a grocery counter and walk away with a bag, know that they aren't just picking up takeout. They could be buying a basket full of groceries very similar to your own — but at a mere fraction of the price.

Read More

• The 'Food Tax': Which States Still Tax Groceries?
• 10 States with the Lowest Sales Tax in 2026
• Places Where State Sales Taxes Are The Highest

Another down day for tech stocks weighed on the broader market Friday, with today's leg lower sparked by reports that a new artificial intelligence model from Chinese startup Moonshot AI bridges the gap with several U.S. models. Poorly received earnings results from streaming giant Netflix (NFLX) weighed on sentiment, too.

At the close, the tech-heavy Nasdaq Composite was down 1.4% at 25,520, the broader S&P 500 was off 1.0% at 7,457, and the blue-chip Dow Jones Industrial Average was 0.8% lower at 52,146.

News that Moonshot AI's Kimi K3 is powerful enough to rival models from OpenAI and Anthropic revived competition fears — and rehashed memories from early 2025, when China's DeepSeek sent stocks into a tailspin. It also pressured several AI-related names, including Nvidia (NVDA, -2.2%) and Intel (INTC, -2.0%).

Netflix stock slides after earnings

A negative reaction to Netflix's second-quarter results also weighed on the S&P 500 and Nasdaq today, with the communication services stock sliding 7.3% — its worst day since April 17.

While the company's earnings of 80 cents per share beat analysts' estimates, its revenue of $12.56 billion fell short and its third-quarter revenue forecast came in slightly below the consensus.

In addition, Netflix said it will begin reporting engagement data on an annual basis vs a bi-annual one. "The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics — revenue and operating profit," the company explained.

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Despite the top-line miss and subsequent stock sell-off, Argus Research analyst Joseph Bonner reiterated a Buy rating on Netflix. He also maintained a $120 price target, representing implied upside of 74% to current levels.

"While competition is intense amid macroeconomic uncertainty, Netflix remains the 'anchor tenant' for consumers in long-form video streaming," says Bonner. "We see the company's incremental moves into live-event sports programming as particularly directed at enhancing its advertising market as well as subscriber acquisition," adding that live events have a higher ad value than scripted content.

As for that advertising business, Bonner notes that Netflix expects ad revenue to double this year, to $3 billion, showing that this segment "continues to scale rapidly.

Travelers soars on Q2 beat

On the plus side of the ledger was The Travelers Companies (TRV), which jumped 9.2% — making it the best Dow Jones stock today — after the property and casualty insurer reported better-than-expected second-quarter results.

In addition to higher demand for insurance, Travelers also saw its catastrophe losses narrow in Q2 and its net investment income soar.

"The scale of our earnings and cash flow enable us to invest in differentiating technology, including AI, at a level that sets us apart, further strengthening the competitive advantages that power those results," said Travelers CEO Alan Schnitzer.

Ahead of earnings, Truist Securities analyst Mark Hughes initiated coverage on the blue chip stock with a Buy rating, saying it is trading at an attractive valuation. "More broadly, we believe the P&C group should be a good performer in light of its consistent topline, limited credit exposure, and moderate interest rate sensitivity."

The earnings calendar heats up next week, with Magnificent 7 stocks Alphabet (GOOGL, -2.2%) and Tesla (TSLA, -2.6%) both reporting.

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If you saved $2.5 million in your traditional 401(k) or IRA, you're probably wondering how much you'll need to withdraw due to required minimum distributions (RMDs) and the impact they'll have on your retirement benefits.

After all, they're required of everyone with a traditional 401(k) and IRA once they turn 73. It's a way for the Internal Revenue Service to get paid for all the tax-free contributions you made to your retirement account during your working years.

But those RMDs can have ramifications if they're large enough. They can push you into a higher income bracket, increase your Medicare premiums, or force you to pay taxes on a portion of your Social Security benefits. You also have to withdraw money that you may not need.

If you take out too much, it means less money to spend later or leave to your heirs. Take out too little, and you could be on the hook for as much as 25% in penalties. If that sounds like a lot, consider that penalties were as high as 50% before the passage of Secure 2.0. A penalty drops all the way down to 10% if you correct your RMD mistake within two years.

Here's a look at what RMDs you'll owe between ages 73 and 85 if you have $2.5 million saved. (We also looked at what you'll owe in RMDs when you have $1 million and $5 million saved.)

Calculating your RMDs

When it comes to calculating your RMDs, it's a straightforward formula that most financial advisers follow. Account Balance/Life Expectancy Factor = RMD

Your account balance is determined as of December 31st of the previous year, while your life expectancy factor is drawn from the IRS Uniform Lifetime Table, which is the go-to chart that the vast majority of retirees are required to use, regardless of their actual health status.

Keep in mind that your RMDs aren't static and will change as you age. The older you get, the lower your life expectancy factor is and the more you have to pay in RMDs.

Because the government assumes that as you age, you have less time left to spend your wealth, it forces you to withdraw a larger percentage of your remaining savings with each passing year.

Lower your RMDs with Roth conversions

One tax-smart way to lower your RMDs is with a Roth conversion. This involves moving money from a traditional pre-tax account — such as an IRA, 401(K), 403(b), or 457(b) — into a Roth IRA, paying taxes on the transition in exchange for tax-free growth. Roth IRAs have no RMDs and allow tax-free withdrawals after five years and age 59-1/2.

The catch? You owe ordinary income tax on the converted amount, which can push you into a higher tax bracket. To avoid this, you can spread your conversions over several years, converting only enough to reach the top of your current bracket.

If you are 73 or older, do this…

-Take your annual RMD first, as the IRS does not allow you to convert RMD funds into a Roth account.

-Convert remaining traditional IRA funds up to the top of your current tax bracket to shrink the size of your future RMD obligations. You should do this annually to shrink your RMDs.

-Pay the conversion tax bill using cash from a non-retirement account to maximize the amount of money left growing tax-free inside the Roth.

If you are under 73, do this…

-Maximize your conversions now, completing them before RMDs kick in.

-Target the low-income years between your retirement date and when your RMDs start for the conversions.

-Keep in mind that starting in 2033, if you were born in 1960 or later, your RMD age will be 75, giving you even more time for Roth conversions.

RMDs don't have to be a headache

You don't have to fear RMDs, regardless of the amount you have saved. While you can't avoid them completely, you can lower the annual amount.

The first step is knowing how much you need to withdraw. Armed with that information, you can plan strategies to lower your tax bill, such as converting money to a Roth IRA.

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What does a cutting-edge artificial intelligence data center have in common with a natural gas pipeline built decades ago?

More than most investors realize.

The race to build AI may be dominated by headlines about chips, software and trillion-dollar technology companies, but the infrastructure supporting that growth could create opportunities in a much less glamorous corner of the market.

About three years ago, I wrote my first article for Kiplinger. It focused on pipeline companies, which many investors expected would become obsolete from the global transition toward renewable energy.

I argued that the market was underestimating the durability of energy demand, particularly for natural gas, and the importance of the infrastructure required to transport and process it.

That thesis has not only held up — it may have become even more compelling.

Opportunities in the pipeline

AI is driving an enormous increase in electricity demand as data centers are built across the country. While renewable energy will undoubtedly play a critical role in meeting future needs, natural gas remains one of the most reliable and readily available sources of around-the-clock power.

As a result, many utilities have significantly increased their expectations for future natural gas power generation.

This creates an interesting opportunity for pipeline operators. Many of the companies that own the existing network of natural gas pipelines possess assets that would be incredibly difficult, expensive and time-consuming to replicate.

The AI revolution may be driven by cutting-edge technology, but it still depends on physical infrastructure built over decades.

Investors who experienced the painful collapse of the MLP sector during the last energy downturn may also be surprised to learn how much the industry has changed.

The old model of aggressively issuing debt and equity to finance growth has largely been replaced by a more disciplined approach focused on stronger balance sheets, internally funded growth, free cash flow generation and returning capital to shareholders.

This evolution is particularly important because it changes the way investors should think about the sector. Many people still associate energy investing with a simple bet on oil and natural gas prices.

However, many midstream businesses generate cash flow based on the volume of energy moving through their systems, often under long-term contracts, rather than the daily swings of commodity prices.

Investing in the age of AI

This idea is consistent with a broader framework I recently discussed in a Stansberry Asset Management webinar on investing in the age of AI: The best opportunities may not only come from the companies creating new technologies, but also from businesses with durable assets, low risk of obsolescence and an essential role in supporting the future economy.

For investors willing to roll up their sleeves, individual pipeline companies may present attractive opportunities. However, selecting the right exposure requires evaluating factors such as asset quality, growth opportunities, balance sheet strength and valuation.

Many investors may therefore prefer a diversified fund or to work with a professional investment manager such as Stansberry Asset Management (where I am the deputy chief investment officer) that can determine how best to incorporate this opportunity into a broader financial plan.

When I first wrote about pipeline companies for Kiplinger, the question was whether the world would still need them decades into the future. Today, that answer appears clearer than ever.

The AI investment nobody is talking about may not be the technology itself, but the infrastructure required to power it.

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

When I think of summertime, I think back to 17-year-old me — driving my car, windows down, not enough sunscreen on, listening to music. Summer always meant less noise, fewer worries about school and not being held hostage by alarms.

These memories have always evoked especially carefree feelings. Until now.

Today's (slightly older than 17) me is struck by the fear that for Gen Z (those born roughly between the late 1990s and early 2010s), summers aren't as insulated from the noise, especially from the echo chamber of social media. And that is causing distress.

Gen Z is inundated with content about the best clothes, the worst places to go to school, the "right" look. They are also exposed to endless financial content, almost daily, and I believe it is causing anxiety.

These young people are under extraordinary pressure to look like they have it all figured out — and it's preventing them from asking for help.

This article looks to quiet a bit of that noise and shine a light on some fundamental financial building blocks.

I'll also discuss where Gen Zers can find trusted, competent advisers to complement their knowledge and provide an appropriate level of support, and how they can create a life for themselves based on financial stability and security.

But first, a few recent examples of "noise."

Side hustles build wealth, but jobs are boring

One common narrative on social media involves downplaying the benefits that come from a traditional, 9-to-5 job. It romanticizes a version of entrepreneurship, which more closely resembles a side hustle that someone should be doing for joy and extra cash rather than to build wealth.

Entrepreneurial spirit and drive are important and can be great, but placing too much emphasis on these themes can make Gen Zers feel bad about not monetizing hobbies. Instead, I think it's more important to think about how to create wealth from your career.

Take workplace benefits, for example. These are a largely invisible form of compensation. A company matching a 401(k) contribution, access to health and disability insurance, or the ability to save into a health savings account or flexible spending account can be incredibly valuable when life takes an ugly turn.

Simply having a predictable cash flow itself is a huge benefit for someone looking to build wealth. It means you can automate savings, anticipate how much you can invest and plan for the future.

Girl/boy math and 'no-spend' months

Some catchphrases are funny — for example, using the term "girl/boy math" to justify unnecessary spending (if you return a shirt that costs $50, you made $50).

"No-spend months," on the other hand, create a restrictive mindset more akin to dieting.

Both can lead to unhealthy financial behavior because they turn budgeting into a game or punishment.

In reality, budgeting is an exercise where you look at your cash inflow and determine how much you can spend on necessary costs, such as rent or a car payment, and discretionary costs, such as dining out, taking that vacation or bulking up savings.

By creating short- and long-term goals, you can create a meaningful, attainable budget that is sustainable for your overall financial health.

Be your own financial adviser — it's easy

No. It's not. While I appreciate the spirit of independence, it's risky to think you shouldn't ask a professional for help because you should be able to do it on your own using "facts" available on the internet.

There's a big difference between being able to access financial information and being able to understand it. Having the ability to sift through what is fact or fiction and apply it to your situation can be incredibly complex — and that's where professional help is useful.

Gen Zers seem to select financial advisers with a decent amount of skepticism and due diligence — and this is a good thing.

But those who hire professionals know the good ones can help educate and coach them to make their own financial decisions, accept new ideas and keep them on track to achieve their financial goals.

Setting the right foundations

This is just a sample of the noise that Gen Z constantly hears. There are plenty more examples and some can be pretty insidious, promising dreams of getting rich quick.

If we can do one thing for our Gen Z friends and family, it's to give them a foundation that helps them feel great about their own choices now and in future. Then maybe they can get back to what young people should be doing this summer — having some fun.

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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.

Picture a family sitting around the table for Thanksgiving dinner. They chat, laugh and enjoy the thoughtfully prepared meal. As they finish, the conversation shifts to what each family member is thankful for. They talk about gratitude in the context of family values and decide which charities to support during the holiday season.

Conversations like this can engage children in charitable giving early on. And while every family's discussion will be different, taking this kind of intentional approach is an essential first step in building and maintaining a lasting charitable legacy.

This is a hot topic for many families. After a decade of buildup, most agree that the Great Wealth Transfer is underway. According to Cerulli Associates, $124 trillion will be transferred by 2048. Most of that will come from baby boomers, and an estimated $18 trillion is expected to go to charitable causes.

Those who want to use the Great Wealth Transfer to build a meaningful legacy will need to focus on two distinct priorities. The first is effectively navigating tax provisions and making the right decisions around asset transfers — an elemental part of financial planning that requires constant vigilance.

The second is building an efficient succession plan that empowers heirs and future generations to carry the legacy forward.

Passing on assets, values and processes

Younger generations stand to inherit more than money. The biggest hope might be that they inherit some of the values and priorities that helped shape how their elders gave. But they often inherit the family process for charitable giving.

For families with a private foundation, this could mean board meetings, administrative responsibilities and managing considerable overheads. These systems may have worked for older generations, but they can feel confusing and burdensome to successors.

To make matters more complicated, many families will experience multiple inheritances as money passes from one generation to another. Married couples may leave money to their spouse as well as their children, for example. In fact, research suggests that $54 trillion will be passed on to widowed spouses as part of the Great Wealth Transfer.

Older spouses must therefore discuss their priorities and plans for how money will pass down. They can then begin talks with the next generation — and advisers — about how to make the process of charitable giving as effective and impactful as possible.

Using a flexible giving vehicle

When considering different approaches to transferring wealth, look for those that offer flexibility. Some families want to empower future generations while retaining some control, for example. A donor-advised fund (DAF) can be a useful tool for this kind of cross-generational giving.

A DAF offers a powerful framework for streamlining and managing elements of inheritance and sustained charitable giving. Specifically, a DAF's structure allows families to combine two common tactics in charitable succession planning: Bestowing to others and endowing to charity.

Bestowing to others enables future generations to assume account privileges and begin making strategic philanthropic decisions. With a Vanguard Charitable DAF, for example, up to two individuals (often a spouse or a child) can be named successor advisors.

The account can then be split into multiple new accounts, allowing families to segment funds and responsibilities how they see fit.

Endowing directly to charity, on the other hand, allows older generations to retain decisions about giving, even after they pass or no longer control the account. You can do this by recommending recurring grants from the DAF. These schedule repeating grants to one or more charities based on a percentage of remaining account assets.

Another benefit of a DAF is that it can accept assets from a private foundation. This simplifies administration, which can relieve many of the burdens inheritors may resist. It also establishes a clear structure for balancing giving priorities by bestowing to others and endowing to charity.

How to navigate family dynamics

With the right plan and giving tools in place, successions and inheritances become an opportunity to pass down one's priorities and lessons alongside wealth. But what happens when families don't agree on values and struggle to create a meaningful path forward?

There is no one-size-fits-all solution, as every family has its own dynamics to navigate. However, there are some best practices to keep in mind.

Clearly communicate expectations. There should be few surprises when an inheritance occurs. Through conversations and estate planning, make sure expectations, roles and wishes for future generations are well established and understood.

Incorporate responsibilities in stages. Just as a child's introduction to finances is traditionally an allowance, then a checking account, then perhaps a credit card, charitable giving and grantmaking can be taught in incremental steps. This can include opening a smaller DAF or another charitable vehicle to help younger generations better understand the process.

Create opportunities for conversation. Charitable giving is a significant and rewarding part of life for many individuals and families. Making time for conversations around philanthropic priorities and how they may evolve over time is critical.

No two families are alike. Those Thanksgiving and dinner table talks will vary. But creating a plan with the right tools and communicating that plan with younger generations — is a powerful way to create and maintain an impactful charitable legacy.

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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.

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 on the Obamacare premium tax credit. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Changes to the premium tax credit

Question: For the past few years, I purchased my health insurance online through the government marketplace. The generous subsidies I qualified for reduced my monthly premiums. When I bought my 2026 health insurance plan, I saw my monthly premiums were much higher than in prior years and my subsidies were lower. I can't afford this cost, and I ended up dropping the coverage. Why are the premiums so much higher?

Joy Taylor: I am guessing that in prior years you qualified for the premium tax credit (PTC), the Obamacare subsidy available to eligible individuals who buy health insurance through the marketplace. Temporary enhancements to this the PTC ended after 2025, so fewer individuals now qualify for it, and the credit is lower.

Before 2021, the PTC was available to people with modified adjusted gross income (AGI) ranging from 100% to 400% of the poverty level. For 2021-25, some people with higher modified AGIs also qualified, and the credit was higher for many. Congress chose not to act on extending the enhancements, so the rules reverted to those that were in pace for pre-2021 years, beginning with 2026 plans purchased through the marketplace.

This is impacting people, such as yourself, who enrolled in coverage late last year for 2026. It's causing their monthly health insurance premiums to rise dramatically, compared with 2025. Most people who qualify for the PTC generally have the credit paid in advance to the health insurance company to lower their monthly premium payment. They elect this when they go to the marketplace to buy insurance. Many people who enrolled in 2026 coverage are experiencing sticker shock and can't pay, or don't want to pay, the higher premiums.

This has led so far to about 3 million people who have bought health insurance through an Affordable Care Act marketplace, such as healthcare.gov, during open enrollment last year to drop their coverage. Insurers and health policy experts warned that millions would end up uninsured if the temporary PTC easings weren't renewed, and the numbers are proving them right.

2. Forecasting what Congress will do

Question: I bought health insurance through a government marketplace for 2026, and my monthly premiums are much higher than last year because I qualify for a lower PTC. Will Congress act before year-end to make this better for me?

Joy Taylor: It's hard to say what Congress will do. Many Democrats want the 2021-25 expansions to the PTC made permanent. That's one of the reasons last fall's federal government shutdown lasted as long as it did (43 days). But last year's deal to reopen the government did not renew the expiring PTC easings. It only included a promise that the Senate would vote on the PTC by the end of 2025. That did not happen.

Federal lawmakers are now dragging their feet on this issue. Democrats want the pre-2026 easings cleanly extended. Republicans want to narrow the scope of the PTC. The parties appeared close to an agreement earlier this year, but talks have stalled.

Expect rising health care premiums to play a role in November's midterm elections. If Democrats win big, look for expanding Obamacare subsidies to be a legislative priority for them in Congress.

3. Paying back excess PTC

Question: For the first time, I bought health insurance through a government marketplace for 2026, and based on my estimated 2026 income, I qualified for the PTC that reduces my monthly health care premiums. What happens if my actual income for 2026 is higher than my estimated income? Will I have to repay the subsidy?

Joy Taylor: Individuals who opt to have their PTC paid in advance to health insurance companies must file Form 1040 and attach Form 8962 to reconcile the advance payments and the actual PTC they are entitled to. If the PTC is higher, they can claim the credit due on their Form 1040. If the PTC is less than the advances, starting with 2026 returns filed next year, they must repay the full amount of he excess, regardless of their reported income. This is different from pre-2026 years, in which taxpayers with incomes below 400% of the poverty level had to repay only a portion of their erroneous credit amounts.

If you experience a lifestyle or income change that could affect the PTC, I suggest notifying the marketplace of such a change. This could include changes in family size, household income and other circumstances, such as starting a job with an employer that provides health coverage to employees. For example, if you lost a job, the exchange will hike the subsidy for future months. It will lower the subsidy amount if you let it know you expect higher income in 2026.

4. The PTC is an IRS audit red flag

Question: I bought health insurance through the marketplace for 2026 and elected to have the premium tax credit reduce my monthly health insurance premiums. My 2026 income will be below the income threshold for filing a tax return. Do I still have to file a 2026 tax return next year?

Joy Taylor: Yes, if you opt to have the PTC paid in advance to your health insurance company to lower your monthly insurance premiums, you must file Form 1040 even though your income is below the normal filing threshold or you expect a refund. And you must complete Form 8962 and attach it to your return.

Note that erroneous PTC reporting is an audit red flag and is easy for the IRS to catch. Its computers flag filed tax returns showing modified AGIs that exceed the limit to take the PTC. So double-check that you qualify for it and that you accurately report it on your 2026 Form 1040.

About Ask the Editor, Tax Edition

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

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

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

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While "home is where the heart is" holds true for millions of retirees who want to age in place, whether their homes are ready is a different story. Narrow hallways, steep stairs, and tub showers are major obstacles, and smaller design flaws are easily overlooked.

Remodeling a home to age in place can be cheap or expensive depending on your safety needs. A comfortable, secure setup typically requires first-floor living quarters, wheelchair-friendly hallways, roll-in showers, a short walk from the driveway, bright lighting, and slip-resistant flooring.

Some homes only need a few tweaks, while others require a complete layout overhaul. Not sure where yours falls on the spectrum? Take our quiz to find out.

More on Retirement, from the Kiplinger team:

• 3 Questions That Reveal if You’re Actually Ready to Age in Place
• The Cost of Staying Put: Aging in the Neighborhood You Love
• The Rise of the 'Half-Back' Retiree: Why a Perfect Florida Condo Isn't Enough
• 9 Upgrades That Transform Your Family Home Into a Retirement Oasis
• What It's Really Like Living in the Margaritaville Retirement Community

Stocks were choppy Thursday as market participants took in a fresh round of earnings reports and several major developments in the healthcare space. Wall Street also watched as chip stocks continued to sell off, with one company's quarterly results spooking this once-hot corner of the market.

At the close, the blue-chip Dow Jones Industrial Average was down 0.2% at 52,552, while the broader S&P 500 was off 0.5% at 7,533 and the tech-heavy Nasdaq Composite had slumped 1.5% to 25,881.

The Dow's losses were limited thanks to a big regulatory win for drugmaker Merck & Co. (MRK), with the healthcare stock climbing 3.3% after the Food and Drug Administration (FDA) approved its daily pill to treat cholesterol.

"Merck's approval is significant because LIPFENDRA, or enlicitide, is the first FDA-approved oral PCSK9 inhibitor," explains William Soliman, Ph.D., founder and CEO of the Accreditation Council for Medical Affairs (ACMA). "It offers the LDL-lowering power associated with injectable PCSK9 medicines in a once-daily pill."

And strategically, Soliman says, "the approval demonstrates that Merck is building beyond oncology as it prepares for Keytruda's eventual loss of exclusivity."

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

The 30-stock index was also buoyed by a well-received earnings report for UnitedHealth Group (UNH, +1.2%). The country's largest health insurer by revenue and market share disclosed higher-than-expected earnings and revenue for its second quarter and raised its full-year forecast.

"Overall, this is an impressive beat-and-raise in Q2, which typically dictates the trajectory for the year, is highly encouraging," says Oppenheimer analyst Michael Wiederhorn, who has an Outperform (Buy) rating on the Dow Jones stock.

Taiwan Semi earnings send chip stocks lower

Elsewhere on the earnings calendar, Taiwan Semiconductor Manufacturing (TSM) posted impressive year-over-year growth in its second-quarter profit and revenue, thanks to strong demand for the tech giant's artificial intelligence (AI) chips.

TSM also gave upbeat third-quarter guidance and lifted its full-year capital expenditures budget to a range of $60 billion to $64 billion, up from its previous forecast for spending of $52 billion to $56 billion.

But the semiconductor stock fell 2.3% today. One reason for today's decline could be quarter-over-quarter revenue declines in several of its non-AI legacy technologies, says Needham analyst Charles Shi, Ph.D. "This is probably a warning sign that the higher memory prices may already be hurting mainstream semiconductor demand," he explains.

Whatever the reason, TSM's sell-off was enough to keep pressure on several chip stocks. Micron Technology (MU), for one, dropped 5.7% and is now down 26% since the start of July. Sandisk (SNDK) fell 12.6% today and is off 38% month to date. Still, the tech stocks remain 200% and 493% higher, respectively, for the year to date.

AtaiBeckley soars 33% on Eli Lilly bid

In non-earnings news, AtaiBeckley (ATAI) was one of the biggest gainers on Thursday, surging 33.4% after Eli Lilly (LLY, +1.2%) said it will buy the psychedelics drugmaker for $2.8 billion in cash, with another $1 billion tied to development and regulatory milestones.

"Lilly is using the financial strength generated by its obesity and diabetes franchises to diversify into neuroscience and other high-need therapeutic areas," says ACMA's Soliman. And while the risks are considerable, he believes there is a substantial opportunity "because treatment-resistant depression affects patients who have already failed multiple conventional therapies."

The potential $3.8 billion purchase price is a drop in the bucket for the blue-chip drugmaker, whose cash and cash equivalents totaled $7.3 billion at the end of 2025.

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Americans 50 and older have long been allowed "catch-up contributions" to their 401(k) plans, IRAs and other retirement accounts. The reason is straightforward: as the runway to retirement gets shorter, Uncle Sam wanted to incentivize as much saving as possible.

But under the 2022 SECURE 2.0 Act, Congress allowed for additional "super" catch-up contributions for Americans aged 60 to 63.

Today, we're going to cover how these enhanced super catch-ups work and the best ways to invest them in 2026.

What is a super catch-up contribution?

All working Americans with access to an employer 401(k) or similar plan can contribute up to $24,500 in 2026 via tax-free salary deferrals. That's a $1,000 increase over 2025 levels.

Of course, if you're 50 or older, the limits get higher. You can contribute an additional $8,000, bringing the total to a whopping $32,500.

Under the SECURE 2.0 Act, these contribution levels get even more supersized. Employees aged 60, 61, 62 or 63 can chip in an additional $11,250, rather than the standard $8,000. That brings the total amount to $35,750. Contributions from employees older than 63 are capped at $32,500 ($24,500 plus the $8,000 catch-up).

Note that none of these figures include employer matching or profit sharing. Depending on the generosity of your employer, matching can add thousands or even tens of thousands of dollars in additional tax-deferred savings.

Also note that these limits only apply to employer plans such as 401(k) plans. There is no enhanced super catch-up for traditional IRAs or Roth IRAs. Workers 50 and older can contribute an additional $1,100, but there are no special rules for those aged 60 to 63.

There's obviously no substitute for starting to save for retirement early and allowing compounding to work its magic. But regardless, the super catch-up contributions certainly allow Americans to turbocharge their retirement savings in what are often their peak earnings years.

How to invest your super catch-up contribution

Now for the fun part. You've managed to supersize your retirement contribution for the year. What's the best way to invest it?

The answer to that question will depend on a couple of factors, including how close you are to meeting your retirement goals. If you're not quite where you want to be, perhaps you still need aggressive growth. If you are near your retirement savings goal, you may be transitioning into income and distribution strategies.

You'll also need to consider where your assets are located. In other words, how is your nest egg divided across tax-free retirement accounts and good, old-fashioned taxable brokerage accounts?

Let's start with some basics, and then we can get more specific.

If you are in your early 60s and able to take advantage of the super catch-up contributions, you may still have decades left to live a quality life. But a reality check is needed here. It took you an entire working career to build your nest egg. If you were to take heavy losses in your portfolio at this stage of the game, you might not have time to make it back.

So, you want to make sure you're not taking excessive risk.

The old financial planning rule of thumb is that your stock exposure should be roughly 100 minus your age. Given that Americans are living longer today (and that returns on competing investments like bonds and cash are lower than they were in past decades), many financial planners have revised that rule to 120 minus your age. Using both as a range, a 63-year-old American should have roughly 37% to 57% in stocks.

Remember, these are rules of thumb, not iron-clad fundamental laws of the universe. You might be comfortable going higher than that, particularly if you have guaranteed income from a pension or if your portfolio is large and able to withstand a significant bear market. But for most savers, a little caution is likely warranted.

In other words, you should treat your additional catch-up contributions the way you treat the rest of your portfolio: investing them in a moderately aggressive portfolio primarily allocated to low-cost stock and bond index funds. A target-date fund that aligns with your age or expected retirement date would also be a perfectly reasonable option.

But let's say your retirement planning is on track, your portfolio is appropriately allocated for your risk tolerance, and you don't really "need" the super catch-up contributions to meet your goals. You're viewing them as a bonus … something akin to "play money."

In that case, have some fun with it. If your plan allows it, you could even consider buying individual stocks. Once your basic financial needs are met, it's perfectly fine to get aggressive with a small portion of your portfolio, such as the super catch-up contributions.

Don't forget about taxes

We briefly touched on asset allocation earlier, and that is worth revisiting here. If you are like most savers, your nest egg is spread across a mixture of traditional retirement accounts, Roth accounts and taxable brokerage accounts.

Remember, not all investments are taxed the same. Stocks or stock funds held for the long term aren't taxable until you sell them, and even then, they will generally benefit from lower long-term capital gains tax rates. Stocks paying qualified dividends also benefit from lower rates, whereas gains from short-term trading and interest tend to get taxed at higher rates.

Keep all of this in mind as you top up your 401(k) with the additional catch-up contributions. To the extent you can, try to put tax-inefficient investments such as bonds or actively-managed stock funds into your retirement account and save the tax-efficient investments, including stock index funds and qualified dividend stocks, for your taxable accounts.

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Alabama shoppers have something to look forward to this weekend: Back-to-school savings. Savvy shoppers can purchase school supplies, computers, and clothing free from the state’s sales tax. This is a big deal since Alabama has one of the highest sales tax rates in the U.S.

And this year, the sales tax holiday is bigger than ever.

State lawmakers enacted legislation to raise the qualifying exemption amounts on select clothing, school supplies, computers, books, and more. This means that you can spend more per item without paying state sales tax.

"The expanded exemption limits make this year’s tax holiday even more valuable for Alabama families," Rick Brown, president of the Alabama Retail Association, stated in a release. "These changes help consumers purchase the items they need for the new school year while also supporting Alabama retailers in their local communities."

Here’s what you need to know about the Alabama tax-free weekend to make the most of your shopping trip.

When is the sales tax holiday in Alabama?

The annual back-to-school Alabama sales tax holiday runs from 12:01 AM on Friday, July 17, until midnight on Sunday, July 19.

During this time, many types of school supplies (including computers and tablets) and clothing are exempt from Alabama’s usual 4% sales tax rate. This saves shoppers $4 for every $100 spent.

What's included (and the price limits)

To qualify for the Alabama sales tax exemption, your purchases must fall under specific categories (like clothing, school supplies, books, electronics, etc.) and stay beneath certain price thresholds.

But this year, each category has seen an inflation-adjusted pay bump due to a newly enacted state law. These amounts are indexed for inflation and will increase every five years.

For instance, qualifying clothing is tax-free during the Alabama sales tax holiday as long as each piece does not exceed $156 (up from $100). Computers and software have a newly raised price threshold of $1,173 per single purchase (up from $750).

Here's a quick-reference table of other qualifying items and their increased price limits to help plan your shopping list:

Note: For a complete list of what's included in the 2026 Alabama sales tax holiday, check out the state's Division of Revenue website.

Here's what's not included

Not all items in the above categories are fair game. Here are a few examples of items you still have to pay tax on during the Alabama tax-free weekend:

• Athletic gear (shin guards, shoulder pads, roller skates, athletic shoes, or sports gloves).
• Jewelry, watches, and hair accessories.
• Handbags and briefcases.
• Cosmetics (including makeup).
• Sunglasses, eyeglasses, and contacts (prescription or nonprescription).
• Belt buckles, wallets, and umbrellas.

Additionally, non-educational video games (those solely for recreation) and computer parts that were sold separately do not qualify.

Items used for "clean room apparel and equipment" are also not tax-free, including cleaning supplies, paper towels, and hand sanitizer.

Rules on online shopping & layaway

Fortunately, you don't exactly have to brave the store crowds to take part advantage of Alabama's tax-free weekend.

• Online purchases. Eligible items purchased online qualify for the tax exemption if they're ordered and paid for during the holiday window, even if the actual delivery occurs after the weekend ends.
• Layaway payments. To qualify for the tax exemption, you must either complete a new layaway purchase (including final payment and delivery) before the holiday window closes, or make the final payment on an existing layaway item during the window.

The local tax catch

While Alabama waives its 4% state sales tax during the holiday, local city and county sales taxes may still apply. Alabama municipalities are not required to participate; they must vote annually to opt in. Thus, be sure to check the Alabama Department of Revenue's list of participating municipalities to see whether your city participates.

Happy shopping!

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Many investors know to expect to pay federal capital gains tax when they sell appreciated stocks, mutual funds, cryptocurrency, investment property, or other assets. But state taxes are often an afterthought, even though those levies can significantly impact your total tax bill.

Most states tax capital gains as ordinary income, while others have special rules, exemptions, or separate capital gains taxes. So, depending on where you live and how much you earn, your gains may escape state tax altogether or be taxed at rates as high as 10% or more.

Here's more to know about state capital gains tax rates and how they could impact your total tax burden for 2026

How capital gains tax works

A capital gain occurs when you sell a capital asset for more than you paid for it. (Common examples include stocks, bonds, mutual funds, exchange-traded funds (ETFs), investment real estate, and certain business interests.)

The amount subject to tax is generally the difference between your purchase price (your cost basis) and the sale price.

Whether you owe tax, and how much, depends in part on how long you owned the asset.

• Short-term capital gains apply to assets held for one year or less and are generally taxed as ordinary income.
• Long-term capital gains apply to assets held for more than one year and typically qualify for lower federal tax rates.

While the federal government provides preferential tax rates for most long-term capital gains, many states don't.

Instead, they generally include capital gains in taxable income and apply the state's regular income tax rates. But…other states have their own rules or exemptions that are important to know.

State capital gains taxes

Bottom line first? Where you live can make a meaningful difference in your overall tax bill.

For example, investors in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming, and New Hampshire generally pay no state tax on capital gains because those states don't impose a broad individual income tax.

Missouri also now provides a 100% deduction for qualifying capital gains, effectively eliminating the state tax on those gains.

At the other end of the spectrum, taxpayers in states like California, Hawaii, New York, Oregon, Minnesota, and the District of Columbia may face some of the nation's highest state tax rates on investment gains.

Washington also imposes a separate capital gains tax on certain high-dollar long-term gains rather than a traditional income tax.

Still, as mentioned, in most states, capital gains are taxed as ordinary income. As a result, the rates below generally represent the highest state income tax rate that could apply to capital gains for individuals in 2026.

Also, keep in mind:

• This table is based on the most recent 2026 state tax data from the Tax Foundation and state revenue department publications available as of mid‑2026.
• State tax rates and rules can change with new legislation or inflation adjustments that are filed late or implemented mid‑year.
• Some states have special capital gains deductions, tiered rates, or local taxes that are not captured by a single number or have unique rules or exemptions that may apply.

Capital Gains Tax Rates by State

States with special capital gains rules

Note: Not every state with a special capital gains tax rule is listed here.

Under Arkansas state tax law, 50% of long-term capital gains are tax-exempt. Because Arkansas taxes the remaining half at ordinary income rates, the state's maximum effective capital gains tax rate is 1.85%. Arkansas also has a unique "super-exclusion" where any net capital gains exceeding $10 million in a single tax year are 100% tax-free.

Massachusetts taxes capital gains at a 5% base rate, but high-income investors may pay more. A 4% “millionaire’s surtax” applies to income above $1,107,750 in 2026 and can affect certain gains, pushing the effective rate above 5% for some taxpayers.

Montana’s top ordinary income tax rate is 5.65%, but long-term capital gains are taxed at lower rates ranging from 3.0% to 4.1%.

New Mexico’s capital gains deductions can reduce the effective rate below its 5.9% top ordinary income tax rate.

South Carolina allows a 44% deduction on qualifying long-term capital gains.

As Kiplinger has reported, Washington imposes a separate capital gains tax, with taxable gains taxed at 7% up to $1 million and 9.9% above that threshold after applicable deductions.

Wisconsin offers a 30% exclusion for net long-term capital gains (60% for qualifying farm assets), and up to a 100% exclusion for long-term investments in qualified Wisconsin businesses.

In some states, local taxes can raise the overall burden. Maryland counties impose additional income taxes, while many Ohio residents pay municipal income taxes that can increase the total tax bill. Other jurisdictions, including the District of Columbia, may also impose local taxes.

What about states with no capital gains tax? Nine states do not impose a state capital gains tax: Alaska, Florida, Missouri, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.

Missouri is a newer exception when it comes to capital gains taxes. As of last year, individuals can subtract 100% of federally reported capital gains from Missouri taxable income, effectively eliminating the state tax on qualifying capital gains.

Federal Capital Gains Tax Rates for 2026

As mentioned, state taxes are only part of the picture when it comes to navigating capital gains taxes. For federal taxes, most long-term capital gains qualify for one of three tax rates:

• 0%
• 15%
• 20%

The rate you pay depends on your taxable income and filing status.

Taxpayers with higher incomes may also owe the 3.8% Net Investment Income Tax (NIIT) on top of their regular capital gains tax.

Short-term capital gains, meanwhile, are generally taxed at ordinary federal income tax rates rather than the preferential long-term rates.

Ways to reduce capital gains tax

While paying some tax on investment profits is often unavoidable, there are strategies you might consider to help reduce or potentially defer capital gains taxes.

Remember that every investor's situation is different, so you may want to consult with a trusted financial planner or tax professional for strategies tailored to your circumstances.

Holding investments for more than one year. Long-term capital gains generally qualify for lower federal tax rates than short-term gains. Depending on your income, that difference can significantly reduce the tax owed on a sale.

Leveraging tax-advantaged accounts. Investments held in traditional IRAs, Roth IRAs, and many employer-sponsored retirement plans generally are not subject to annual capital gains taxes while the money remains in the account. Qualified Roth withdrawals can be taken tax-free.

Offsetting gains with investment losses. If you sell investments at a loss, those losses can be used to offset capital gains. "Tax loss harvesting" can reduce the amount of gain subject to tax and, in some cases, allow taxpayers to deduct up to $3,000 of excess losses against ordinary income each year. But don't forget about the wash sale rule.

Considering the timing of a sale. Selling an asset in December instead of January — or vice versa — can affect which tax year the gain falls into. Taxpayers expecting a significant change in income might benefit from carefully planning when gains are realized.

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If something happened to you tomorrow, would your family know exactly what to do … or would they be left guessing?

Without a plan, your estate might go through probate, a process that can take months (or longer), incur legal costs and make your personal financial matters part of the public record.

According to Caring.com's 2025 Wills and Estate Planning Survey, less than 50% of respondents said they had estate planning documents drawn up to ensure their wishes were known. Only 24% said they had a will (a significant decrease compared with past years).

As a longtime financial adviser, I have to admit I wasn't surprised when I saw those survey results. Through the years, I've learned that even the most diligent and caring families underestimate the importance of legacy planning as part of their overall financial plan.

Some just don't want to think about it, or they haven't gotten around to it. Many simply can't imagine that they have enough assets to justify the time, effort and cost that goes into documenting their preferences.

But having a legacy plan is one of the most thoughtful things you can do for your loved ones. If you can make these consequential decisions now — and get it all down in writing — your family and friends can help avoid the anxiety of having to guess, fight for or fight over what you might have wanted.

What are some legacy planning basics?

A legacy plan can range from a few basic documents meant to help ensure that your medical, financial, and other wishes are clear to a more detailed plan that can help shield your estate and your beneficiaries from taxes and the probate process.

(Note: The following information is provided for educational purposes only and is not intended as legal advice.)

Because estate planning documents must be drafted based on your individual circumstances and state laws, you should consult a qualified attorney to create or complete the components of your estate plan.

Some common components include:

A basic will

A will is a legal document that outlines who you want to inherit your assets after your death. Because it can be relatively easy and inexpensive to create, it's the foundation of most estate plans.

A will allows you to:

• Name your beneficiaries
• Appoint an executor who will be responsible for carrying out your wishes
• Choose the guardians who will care for your children
• Leave charitable gifts to the causes you care about

Contrary to what many people believe, a will usually won't exempt your estate from going through probate, a court-supervised process that includes ensuring that your debts are paid and that your assets are properly distributed.

But a will provides guidance and more control. If you die intestate (without a will), the court will follow state laws to decide how to distribute your estate.

A living will

You can use a living will to inform your family and doctors about the medical treatment you want to receive if you're no longer able to communicate or make decisions.

It's a legal document that must meet state requirements, and it won't take effect until doctors determine you can no longer convey your wishes about things such as pain management, resuscitation or end-of-life care.

A healthcare power of attorney (POA)

A healthcare POA, also known as a durable POA for healthcare or medical POA, differs a bit from a living will in that it appoints a proxy or agent to make healthcare decisions for you if you become incapacitated.

With this document, a chosen representative whom you trust can communicate with healthcare providers and access medical records to make informed decisions.

A financial POA

A durable POA allows you to name the person (or persons) you want to make financial and legal decisions on your behalf. This means that person can manage your affairs without having a guardian or conservator appointed by the court.

The document can be tailored to grant specific powers or provide broader powers based on your preferences. Unlike a regular POA, a durable POA remains in effect if you become incapacitated and can no longer make your own decisions.

Other must-dos to help avoid probate

Along with these documents, legacy planning moves can also help your heirs avoid the stress and expense of the probate process:

• Name your beneficiaries. Never assume your money and other assets will make it to the people and places you have in mind. Make sure your beneficiaries are noted (and regularly updated) on all your accounts, property deeds, insurance policies, etc.
• Set up payable-on-death (POD) designations. Taking the time to fill out a POD designation form with your bank can keep your loved ones from having to wait months or longer to access the money in your accounts. Instead of going through probate, the funds in your checking, savings and other accounts can be automatically transferred to the named beneficiary when you die.
• Preparing transfer-on-death (TOD) designations. A TOD designation is another legacy-planning tool that typically allows assets to pass directly to beneficiaries without having to go through the probate process. The main difference is that a TOD account typically applies to investment accounts or individual holdings rather than bank accounts, and there are usually more steps involved in accessing the account(s).

With a TOD (vs just including an inheritor's name on a property deed or an account), the asset's basis will be automatically adjusted, or "stepped up," to its fair market value on the date of the transferer's death, which can help mitigate capital gains tax.

Let's talk about trusts

You might have heard that a trust is a must when it comes to legacy planning. Setting up a trust can make sense for many people.

Besides potentially offering significant estate tax benefits, a trust can provide other protections. The assets in your trust won't be part of any probate proceedings, which means your beneficiaries should be able to receive them faster.

trusts don't become part of the public record, so it's a good way to help protect your family's privacy.

There are two broad categories of trusts, and each has its pros and cons:

A revocable trust allows you, as the grantor, to make changes to your trust or revoke it if you should choose to do so at some point. You can remove beneficiaries, add new ones or modify how assets within the trust are managed.

However, because you'll retain control of the assets in a revocable trust while you're alive, those assets will still be considered part of your estate for tax purposes.

Unlike an irrevocable trust, a revocable trust isn't a sure thing when it comes to shielding your assets from creditors.

With an irrevocable trust, you, as the grantor, give up the right to amend or revoke the trust without your beneficiaries' consent, which means giving up some control.

But it also means that any asset transferred to the trust during your lifetime will be removed from your estate for estate tax purposes if the trust is properly drawn up and administered. Those assets will also be protected from your creditors and your beneficiaries' creditors.

Do you really need a trust?

Not everyone needs a trust, but many families benefit more than they realize, especially as their financial lives become more complex.

If you need help figuring out which strategies and documents might be the right fit for you and your family, I recommend reaching out to your financial adviser and/or an estate attorney.

If retirement planning is about creating income for your life, legacy planning is about creating clarity for the people you leave behind.

If you're worried about costs, you might find that getting help and putting the proper documentation in place can help save you money in the long run.

The sooner you get started, the better.

Kim Franke-Folstad contributed to this article.

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

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

For many Americans, recent market swings have been emotionally draining. These volatile moments in the market can create uncertainty and may influence how people feel about their financial future in retirement. As markets go down, financial stress can often go up.

In the 2026 Annual Retirement Study* from the Allianz Center for the Future of Retirement®, two in three Americans (67%) said they worry more about running out of money than death.

That concern has climbed steadily over the past five years, up 10 percentage points since 2022. This worry is driven by rising costs, healthcare concerns and market volatility.

Market drops trigger anxiety

Many Americans are tuned in to how the market is performing each day. The majority of Americans (57%)* said they feel anxious about their future financial well-being when their retirement accounts suffer losses due to a market drop. Half say they immediately check their retirement accounts after a dip.

Watching the balance fall in your retirement accounts can feel like watching years of hard work disappear. But it's important to keep in mind that over the long term, the market has historically provided positive returns.

Reacting to short-term volatility can leave a lasting, and likely negative, impact on retirement security.

Still, more than one in three Americans (34%)* say they typically withdraw money from investments to avoid further losses when the market experiences a significant decline.

While cutting your losses may feel proactive, selling during a downturn locks in those losses and may derail a long-term financial strategy. For those who still have decades before retiring, time is on their side for recovery.

This makes it concerning that 46% of Millennials* said they pull money out of the market during a downturn. If young investors continue to accumulate assets in a down market, the volatility can even work to their advantage by buying when prices are lower.

If young investors stay in the market, then history has shown the market could rebound before they intend to touch those accounts.

For those approaching retirement or who have recently retired, a down market can have a big impact on outcomes. They don't have the time to ride out a market downturn.

The years just before and after retirement are referred to as a "fragile decade," because withdrawals taken during market downturns can reduce the longevity of a portfolio, which can cause anxiety around market volatility during this period.

Losses early in retirement can be harder to recover from because you are withdrawing money at the same time the portfolio is trying to rebound. In this case, short-term declines can have a material effect on retirement income.

The role of risk management in a retirement strategy

Many may have these reactions to market volatility because it exposes their lack of planning for retirement. Nearly half of Americans (48%)* said they do not have a written financial plan.

Without a road map, Americans don't know how to navigate through a detour or bumps in the road.

While we cannot predict when market volatility will happen, history shows that it has occurred over time. A strong retirement plan incorporates strategies to manage the risk posed by market volatility.

Avoiding the market altogether isn't advised to address the risk — market participation can be critical to manage other risks such as inflation.

Incorporating risk management within a retirement strategy can help align risk appetite with desired retirement outcomes. If risk is not accounted for, then it could signal the need to consult a financial professional.

A financial professional can create a written financial plan that can help create structure and confidence around risk and controllable factors.

A written financial plan provides a guide when volatility strikes. It will identify your retirement income sources and assign roles to the different assets in your portfolio.

It can document how a scenario was anticipated and what strategies are in place to address it. Without that guide, it can be easy to react emotionally rather than stay the course.

Building a reliable strategy for uncertain markets

Market volatility isn't new, and it isn't going away. What changes is how prepared people feel when it arrives. A retirement strategy isn't about avoiding uncertainty. It's about planning for it.

It is important to incorporate a level of protection from market volatility into your strategy while accumulating assets and when drawing down on those assets for retirement income.

Some financial products, like defined outcome exchange-traded funds (ETFs), have a buffer that can help limit losses in a down market.

As you move from accumulation into retirement, you may plan to shift how your assets are spread across asset classes to diversify and allocate more toward financially conservative approaches.

It also helps to ensure your essential expenses are covered. One strategy designed to address market risk is to have reliable, stable, secure sources of income to cover essential expenses such as housing, food, utilities and healthcare.

That way, you will not have to withdraw from your more variable assets when the values are down just to pay bills.

Social Security is an important source of reliable, increasing income for many Americans, but it is not enough to be the sole source of retirement income for many. So there is often a gap between essential expenses and Social Security benefits.

Other sources of guaranteed income like annuities can help fill in that gap and provide safe guaranteed income** that cannot be outlived*** and, in some cases, can increase, complementing Social Security.

Knowing that you have strategies in place can help make it easier to go through periods of market volatility. By addressing risks head on and incorporating risk-management strategies alongside growth, Americans can feel more prepared to weather market turbulence without losing sight of the long term.

Volatility may test your nerves. But a well-built strategy helps ensure it doesn't derail your financial future.

* Allianz Center for the Future of Retirement® conducted the 2026 Annual Retirement Study in January 2026 with a nationally representative sample of 1,000 respondents age 25+ with an annual household income of $50k+/$75K (single/married) OR investable assets of $150k+. The Allianz Center for the Future of Retirement® produces insights and research as a part of Allianz Life Insurance Company of North America.

^** Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company.

^*** Assumes all terms of the contract are followed.

Annuities can help meet long-term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.

Investment strategies, such as diversification and strategic asset allocation, do not ensure a profit or protect against loss.

Defined outcome ETFs are subject to investment risk, including loss of all principal invested.

Related Content

• These 5 Steps Can Help You Keep Your Head When Market Volatility Causes Others to Lose Theirs
• When Markets Are Jumpy: A Financial Planner Explains How to Stay Grounded
• A Simple Trick for Better Investing: Stop Timing the Market
• Is Your Retirement Plan Based on Social Security Fact or Fiction?
• Are You Putting Yourself Last? The Cost Could Be Your Retirement Security

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

If you're getting financial advice from someone who is paid based on the products you buy, you're not getting objective financial advice. You're being sold.

That may sound harsh, but it's the reality of how much of the financial services industry still operates.

One of the least understood drivers of this problem is something called revenue sharing. And if you don't know how it works, there's a good chance it's influencing your portfolio.

The incentive you're not supposed to notice

Revenue sharing is simple:

• Investment management companies charge fees on the products you own
• They send a portion of those management fees back to the financial advisory firms that recommend their product
• The more client money in those financial products, the more money flows back to the financial advisors

In the aggregate, these payments can total hundreds of millions of dollars over time.

Let's call it what it is: A financial incentive for a financial advisor to steer you toward certain investments.

This isn't advice — it's financial product distribution

Think about the grocery store "shelf space" analogy.

The brands at eye level didn't earn that spot by being better. They paid for it.

Now apply that to your portfolio:

• Some funds are easier for your financial advisor to recommend
• Some product providers happen to get preferred placement
• Some options may not even be shown to you

That's not objective advice. That's product distribution dressed up as financial planning.

The cost to you: Hidden fees and compounding costs

Revenue sharing doesn't come out of thin air. It comes out of your investment returns and is layered on top of (or sometimes baked into) your:

• Advisory fees
• Fund expenses
• Platform costs

So you end up paying what many insiders call "the fee on the fee on the fee."

Even small differences in cost compound into massive differences in long-term wealth.

Why most investors never see it

Revenue sharing is technically disclosed.

But in practice?

• It's buried in the fine print of your client agreements or mutual fund prospectuses
• It's rarely quantified
• It's almost never explained clearly (or even brought up)

So investors continue to believe they're receiving objective advice when they're often sitting in a system designed to reward the financial advisor for product placement.

Here's the truth most investors miss

The problem isn't just bad actors. It's the system.

Even well-intentioned financial advisors operate within compensation structures that:

• Reward certain financial product recommendations
• Encourage "approved lists" of products
• Make some investments more profitable than others — for the advisor

You can't fix that with better questions alone. You fix it by changing the type of advisor you work with.

The clean break: Fee-only financial advice

If you want to eliminate these conflicts, there is a straightforward solution: Work with a fee-only financial advisor. Better yet, work with one affiliated with the National Association of Personal Financial Advisors (NAPFA).

NAPFA advisors operate under a strict standard:

• Client payments only
• No sales commissions
• No hidden revenue sharing agreements
• No third-party compensation tied to recommendations

Read that again. NAPFA financial advisors do not get paid more based on what you buy. That's a completely different business model.

Why this matters even more than credentials

Many investors focus on designations, titles and branding.

But here's the uncomfortable truth:

• A profession designation or credential does not eliminate conflicts of interest
• A polished sales presentation does not eliminate financial incentives
• A big financial firm does not eliminate biased advice

Compensation structure does. And if your advisor is part of a system that profits from product placement, you need to assume that influence exists — whether it's visible or not.

A simple process of elimination

If you want better financial advice, start here:

• Avoid financial advisors who have some (or all) of their compensation tied to product sales: That includes financial advisors working at product-driven financial institutions such as large banks, investment securities brokerage firms and insurance companies.
• Ask financial advisors one key question: "Do you receive any compensation from the investments you recommend?"
• Eliminate all financial advisors from your search who earn a living based on conflicted financial advisor compensation models: If the financial compensation model includes sales commissions, sales incentives or revenue sharing, move on to other firms.
• Focus on fee-only advisors: Use "find an advisor" directories at fee-only trade associations, such as NAPFA, to find the fee-only financial advisors in your area.

This process is not complicated. But it does require discipline.

The bottom line

You have two choices when it comes to financial advice:

• Work with someone who is paid to sell products
• Or work with someone who is paid to give advice

Revenue sharing is just one example of how the lines get blurred. But if you want to cut through the noise, remember this: The easiest way to avoid biased financial advice is to avoid the product distribution system that creates it.

For many investors, that means one thing:

Stop taking financial advice from a product salesperson and start working with a fee-only financial advisor who is paid only by you.

Related Content

• Overpaying for Financial Advice? A Financial Planner's Guide to Fees
• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth
• 'Fee-Only' and 'Fiduciary' Are Not the Same: A Financial Pro Sets the Record Straight
• I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial Advice
• The Truth About 'Top Producers': What You Should Know Before You Choose a Financial Professional

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

For decades, the classic 60/40 portfolio of stocks and bonds was considered the gold standard for balanced investing.

Much of its success, however, coincided with an extraordinary macroeconomic backdrop: a more than 40-year period of generally falling interest rates that began in the early 1980s.

That dynamic made bonds an effective hedge for much of the past four decades. During recessions, central banks typically cut interest rates to stimulate economic activity.

As stocks declined, bond prices often rallied, allowing balanced portfolio investors to rebalance by selling appreciated bonds and purchasing cheaper equities.

That negative correlation broke down in 2022. To combat the highest inflation in decades, the Fed raised the federal funds rate at one of the fastest paces in modern history. Rising rates caused bond prices to fall sharply at the same time equities entered a bear market.

For many retirees relying on a supposedly diversified 60/40 portfolio, bonds offered far less protection than expected as both major asset classes declined together.

Investors today face the possibility of a higher-for-longer interest rate environment. Inflation remains above the Fed's long-run 2% objective, while tariffs, fiscal deficits and geopolitical conflict continue to create inflationary pressures that may limit how aggressively central banks can cut rates.

One alternative is to reduce portfolio risk through ETFs that incorporate built-in hedging strategies.

A hedge is simply an investment designed to offset part of another investment's risk. Like buying insurance, a hedge typically comes with a cost, but in exchange it may reduce losses.

Just like any insurance policy, whether a hedge ultimately proves worthwhile depends on the premiums paid, prevailing market conditions and a measure of luck.

Ultimately, the objective of most hedged ETFs is not necessarily to maximize returns.

It's to reduce the severity of large drawdowns so investors are more likely to remain invested through periods of market stress, instead of abandoning their long-term investment plan after a sudden decline.

Hedged ETFs are considerably more sophisticated than traditional index funds. So it's important to understand how the options and other derivatives they employ work.

How do hedged ETFs work?

A hedge is designed to provide ongoing protection for part of your portfolio, helping limit losses when markets fall.

ETFs can employ several different hedging techniques. One of the most common is to purchase put options. A put option gives its buyer the right, but not the obligation, to sell an underlying asset at a predetermined price before expiration.

The underlying asset may be an individual stock or, more commonly for hedged ETFs, a broad market index such as the S&P 500.

Obtaining that protection isn't free. The buyer must pay an upfront premium. Much like insurance, that payment compensates the seller for assuming downside risk.

If the market never declines enough for the hedge to become valuable, the option loses value as time passes. This process is known as "theta," or time decay.

Eventually, the option also expires, requiring the purchase of another put option to maintain protection. As a result, an ongoing hedging program creates a persistent performance drag during strong bull markets.

The trade-off is what happens during a major market decline. Put options can exhibit "convexity," which means their value doesn't increase in a straight line.

Instead, gains can accelerate as markets decline further below the strike price. Ideally, this nonlinear payoff allows relatively small premium payments to offset a meaningful portion of large portfolio losses.

Individual investors sometimes purchase puts tactically when they believe markets are particularly vulnerable. Most hedged ETFs maintain protection on an evergreen basis, continuously rolling their option positions as existing contracts approach expiration.

How we picked the best hedged ETFs

First, we narrowed the universe by excluding standalone hedging ETFs, which are designed to be paired with an existing stock portfolio and allow investors to add or remove protection by adjusting a separate allocation.

We also excluded buffer ETFs. These products provide point-to-point downside protection over a predefined outcome period. But they require considerably more timing than many investors realize.

Instead, we focused on evergreen hedged ETFs. These funds can generally be purchased at any time.

They don't offer the precise point-to-point protection of a buffer ETF. But they do maintain an ongoing downside hedge that continuously cushions portfolio risk without requiring investors to monitor outcome periods or repeatedly reposition their holdings.

Just as importantly, every ETF we selected is an all-in-one solution. Each combines a long portfolio designed to participate in long-term market appreciation with an integrated hedging strategy that seeks to reduce downside risk.

These funds aren't direct replacements for traditional 60/40 portfolios, but they may serve as useful complements if you're concerned that stocks and bonds could once again become highly correlated during periods of rising interest rates.

Traditional diversification relies on the expectation that correlations between asset classes remain favorable. Hedged ETFs instead incorporate derivatives whose payoff structures are mathematically defined.

Hedging already creates an inherent performance drag through option premiums, so we established an expense ratio ceiling of 0.55%.

Finally, we required every ETF to have at least $100 million in assets under management.

JPMorgan Hedged Equity Laddered Overlay ETF

• Assets under management: $3.9 billion
• Expense ratio: 0.50%
• 30-day SEC yield: 0.5%

The JPMorgan Hedged Equity Laddered Overlay ETF (HELO) is essentially the ETF version of the long-running JPMorgan Hedged Equity Fund Class I (JHEQX).

That mutual fund has attracted attention over the years because of its size. Whenever it adjusts its options positions, the resulting trades are often large enough to be watched by market participants.

According to Morningstar, the strategy has been consistently executed. At its core is an actively managed equity portfolio designed to resemble the S&P 500, paired with what is known as a put spread collar.

Portfolio manager Hamilton Reiner begins by purchasing a put option approximately 5% out of the money on the S&P 500. This establishes downside protection should the market decline.

To reduce the cost of purchasing that protection, the strategy simultaneously sells a second put option approximately 20% out of the money. The premium received helps offset the cost of the purchased put, but it also means investors begin participating in losses again if the market declines beyond roughly 20%.

Finally, to largely finance the remaining cost of the hedge, the strategy sells covered call options typically between 3.5% and 5.5% out of the money. Those call premiums substantially reduce the net cost of the hedge, although they also cap a portion of the portfolio's upside during strong market rallies.

Each individual options overlay for this strategy is established with roughly three months remaining until expiration. Rather than replacing the entire hedge at once, the ETF resets approximately one-third of its options portfolio each month.

The result is a disciplined options overlay that seeks to reduce downside volatility while sacrificing some upside participation. According to Morningstar, the strategy has historically been effective at lowering risk relative to both the S&P 500 and a traditional 60/40 balanced portfolio.

Choosing HELO instead of JHEQX also makes the strategy far more accessible. Investors no longer need to meet the mutual fund's $1 million minimum investment requirement, while also benefiting from a slightly lower expense ratio.

Morningstar currently assigns HELO a gold medalist rating, reflecting its highest level of conviction that the fund is positioned to outperform its category peers on a risk-adjusted basis over a full market cycle.

Learn more about HELO at the JPMorgan provider site.

Simplify Hedged Equity ETF

• Assets under management: $299.9 million
• Expense ratio: 0.43%
• 30-day SEC yield: 0.7%

The Simplify Hedged Equity ETF (HEQT) is a direct competitor to HELO, employing a similar put spread collar strategy to reduce downside risk while maintaining broad equity exposure.

Like HELO, the strategy begins by purchasing a put option approximately 5% out of the money on the S&P 500. It then offsets part of that cost by selling a second put roughly 20% out of the money. The remaining hedge cost is financed by selling covered calls, with the exact strike adjusted dynamically based on market conditions and balancing premium generation against upside retention.

Rather than establishing all of its positions at a single point in time, HEQT ladders the options across three consecutive monthly expirations. This helps reduce timing risk, making the ETF investable throughout the year without investors needing to worry about entering at a particular date.

The underlying equity exposure comes from the iShares Core S&P 500 ETF (IVV), while the hedge itself is constructed using cash-settled European-style S&P 500 options. These options eliminate the possibility of early exercise and can offer favorable tax treatment.

Unlike a typical buffer ETF, which generally derives its exposure almost entirely from options, HEQT physically owns its underlying equity ETF.

As a result, investors continue receiving dividend income from the underlying stock portfolio, contributing to a modest 0.7% 30-day SEC yield.

Learn more about HEQT at the Simplify provider site.

iShares Large Cap Deep Buffer ETF

• Assets under management: $126.7 million
• Expense ratio: 0.51%
• 30-day SEC yield: 0.7%

The 5%/20% put spread collar is one of the more common hedging structures because it strikes a practical balance between protection and cost.

While an options portfolio can theoretically be constructed using any combination of strike prices, purchasing a put only 5% below the market protects against meaningful corrections without making the hedge prohibitively expensive.

Selling a put 20% below the market generates premium to help finance that protection while still covering the majority of historical market pullbacks, which have generally been shallower than prolonged bear markets.

The covered call completes the strategy by financing much of the remaining hedge cost, albeit in exchange for capping upside participation.

Unsurprisingly, BlackRock's lineup offers its own implementation through the iShares Large Cap Deep Buffer ETF (IVVB), which competes directly with HELO and HEQT.

The foundation of the portfolio is IVV, providing investors with exposure to the S&P 500. On top of this equity allocation, IVVB deploys a laddered portfolio of FLEX options using the familiar 5%/20% put spread collar structure.

Like HELO and HEQT, IVVB's options portfolio maturities are staggered and actively managed, allowing portions to be refreshed throughout the year.

This reduces the timing risk associated with entering the strategy immediately before a major options reset.

Learn more about IVVB at the iShares provider site.

Parametric Hedged Equity ETF

• Assets under management: $140.1 million
• Expense ratio: 0.29%
• 30-day SEC yield: 0.9%

The 5%/20% put spread collar is also popular because it's systematic and relatively easy to implement. Once established, the strategy can largely run on autopilot as the ETF provider periodically rolls the options.

The trade-off is that it can also be somewhat rigid, as not every market correction unfolds within a 5% to 20% decline. Investors seeking a more dynamic implementation may find the Parametric Hedged Equity ETF (PHEQ) appealing.

According to Parametric, PHEQ features an actively managed portfolio of stocks with less than 70% overlap with the S&P 500 index, while relying on a laddered put spread collar strategy that's rolled on a quarterly basis.

There are familiar building blocks: a long put financed by selling a lower strike put, with a covered call helping offset the remaining hedge cost. Implementation, however, is more flexible.

The fund maintains four overlapping one-year hedges, with approximately 25% of the options portfolio expiring each quarter. Each hedge is designed to provide roughly a 20% downside protection range from between 10% to 30% below the S&P 500.

The covered call component is also more dynamic. Rather than consistently selling calls at predetermined strike prices, managers adjust the "moneyness" of the covered calls according to prevailing market conditions, giving the strategy potentially better upside capture.

Despite its more hands-on portfolio management, PHEQ is also the least expensive hedged ETF featured in this roundup, charging an expense ratio of just 0.29%.

Learn more about PHEQ at the Parametric provider site.

Fidelity Hedged Equity ETF

• Assets under management: $915.3 million
• Expense ratio: 0.48%
• 30-day SEC yield: 0.6%

The put spread collar represents a practical compromise between cost and protection. By financing part of a purchased put with a sold put and covered calls, these strategies substantially reduce the ongoing drag associated with buying downside insurance.

The trade-off is that upside becomes capped, and if markets decline far enough, investors begin participating in losses again once the short put moves into the money.

In other words, a put spread collar provides moderate protection against moderate declines in exchange for lower hedging costs.

Investors seeking stronger protection against severe bear markets may find the Fidelity Hedged Equity ETF (FHEQ) to be a compelling alternative. Rather than using a put spread collar, FHEQ employs a much simpler approach.

The majority of the portfolio consists of an actively managed basket of just over 150 stocks with characteristics broadly similar to the Russell 1000 Index and the S&P 500. The hedge is then constructed by purchasing a ladder of out-of-the-money S&P 500 put options with varying strike prices.

Unlike a put spread collar, there are no covered calls sold to finance the hedge and no short puts that reintroduce downside exposure after a certain point. The cost of maintaining the protection is instead paid directly from the portfolio through dividends and available cash.

This creates a different payoff profile. During relatively calm markets or shallow pullbacks, FHEQ's fully purchased puts may produce greater performance drag than a put spread collar because the fund continuously pays option premiums without offsetting them through option sales.

However, in a prolonged and severe bear market, such as 2008, the strategy has the potential to provide substantially greater convexity.

Since there is no short put limiting the hedge, the value of the purchased puts can continue increasing as markets fall, allowing the downside protection to become progressively more valuable during deep drawdowns.

Learn more about FHEQ at the Fidelity Investments provider site.

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The processing fee that almost doubles your concert ticket or the subscription you have to jump through endless hoops to cancel — these aren't accidents. They're tactics designed to drain your wallet.

Thankfully, the tide is finally turning. New York City Mayor Zohran Mamdani recently announced a proposed major crackdown on these practices. New rules would require companies to provide up-front pricing and a "one-click" cancellation rule. And New York isn't the only place putting in restrictions.

Here is what you should know about these protections — and how to spot the traps still eating away at your budget.

What are subscription traps?

Signing up for services, from streaming to gym memberships, is super easy. However, when it comes to cancelling those services, you might have to jump through multiple hoops.

Some websites or apps redirect you to multiple pages with confusing language as part of their deliberate retention strategy. Or, they won't supply a link on their website, instead asking you to call their customer service number, where automated messages and customer service reps trained to help you avoid cancelling services await.

This is why I recommend trying out streaming and shopping subscriptions during their free trials. Use a one-time virtual card (some credit card companies offer this feature, including Capital One and Citi). That way, if you have trouble cancelling the service when it's time to pay, you won't have to jump through all the hoops.

The other thing sapping your hard-earned money is junk fees.

The price you didn't agree to: Junk fees

Another policy New York will implement is to eliminate junk and hidden fees. Junk fees are hidden extra charges tacked onto purchases.

Every year, Americans pay billions of dollars in these fees. You'll often find them imposed by ticket brokers, hotels and subscription-based services.

For example, a concert ticket may be listed at $250, but you end up paying around $400 due to "processing" and other fees. New York aims to combat this by forcing companies to disclose the total costs up front. While that won't eliminate the fees themselves, it alerts you to your total costs upfront, so there are no surprises.

The good news is that New York isn't the only area fighting back against these tactics.

The regulatory wave: Are other places following?

Yes, more than 30 states either have or are in the process of passing legislation to protect customers from hidden fees.

Here are several examples of what states are doing:

• California: Banned junk fees by requiring businesses to display all prices up front.
• Florida: Passed a transparency law forcing restaurants to disclose all fees (including mandatory gratuity) up front.
• Illinois: Starting on January 1, 2027, the state will ban hidden resort fees by hotels, unlisted tips imposed by restaurants and hidden processing fees for sports or concert tickets.
• Colorado: Requires fee transparency from businesses, such as landlords disclosing all mandatory monthly fees, restaurants including mandatory gratuity and travel providers including resort fees up front.

Beyond the statewide bans, some other cities are taking action too. Seattle is exploring legislation to ban junk fees.

Their measure specifically targets fees in rental agreements, capping how much landlords charge for pet damage and banning charges for tenants who pay rent by check, use mail service or have in-unit appliances.

There are also ways to protect yourself from incurring these hidden costs.

Here's how to protect your cash from hidden charges

To ensure you aren't paying more than you should:

• Always use a credit card: It makes disputing hidden fees much easier.
• Challenge hidden fees: If a company charges a fee they didn't disclose upfront, contact them directly to dispute it.
• Know your local laws: Review your state's or city's laws to see which consumer protections you have, such as price transparency for services.
• Report deceptive practices: If you encounter a company that won't budge on hidden fees, consider filing a report with the Federal Trade Commission.
• Track your subscriptions: Use a budgeting app like Quicken Simplifi or Tiller to review all of your recurring subscriptions.
• Review your credit regularly: Services like myFico or LifeLock by Norton alert you to credit changes and can help detect fraud early.

Ultimately, keeping yourself protected from these tactics is an ongoing thing. But doing so is well worth the work, as it can save you more of your hard-earned money.

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• The 30-Minute Subscription Audit That Could Save You Hundreds This Year
• What to Know About Dynamic Pricing — and How to Beat It

With inflation accelerating, affordability remains Americans’ top financial concern these days, according to a Gallup survey. Adding insult to injury is the recent proliferation of mysterious or hidden fees, complicated cancellation policies, spam calls, and service inconveniences that collectively make up the "annoyance economy."

That’s the term some experts now use for the "steady grind of small hassles that eat away at our time, patience, and wallets," as a recent report from the research group Groundwork Collective describes it.

The annoyances include hours spent waiting on hold with customer service, dealing with insurance paperwork, fielding robo calls or navigating AI chatbots, and paying mysterious service, handling and administrative fees, often imposed at checkout.

The annual cost to consumers, the researchers found: $165 billion in wasted time and money. The biggest chunk of that cost — $90 billion, or an average of $650 per household — comes from out-of-pocket spending on so-called junk fees, such as those tacked on to transactions for everything from travel and banking to concert tickets and food delivery.

"Everyday interactions that should be simple too often turn into fraught ordeals, leaving people feeling overwhelmed, ignored, or jerked around," the researchers say.

There is one positive development in the fight against the annoyance economy: Opposition to junk fees is becoming a rare example of bi-partisan cooperation, says Susan Weinstock, CEO of the Consumer Federation of America. "Everybody hates junk fees," she says.

The Trump administration, for instance, has enacted bans, originally proposed by the Biden administration, on deceptive and late disclosure of fees for event tickets as well as surprise hotel resort fees.

It has also joined a bipartisan group of state attorneys general in a suit against Uber, alleging the company has misled customers by claiming it is easy to cancel its Uber One service ($9.99 a month), which promises free food delivery from certain restaurants and other discounts.

This spring, the Federal Trade Commission solicited comments on proposals that might bar unfair or hidden fees on grocery-delivery services and housing rentals and make it easier to cancel subscriptions.

"It is piecemeal," Weinstock says. "But we are making progress."

Unfortunately, such fees are so profitable for the companies that levy them that when one gets banned another often pops up, whack-a-mole style. So you still need to shop smart and fight back strategically.

Here’s what consumer experts suggest.

Know your rights.

Federal law generally forbids deceptive advertising. And starting in May 2025, the federal government has specifically required two industries to provide total costs for purchases up front: event-ticket brokers and short-term lodging providers and platforms. Six states also have junk-fee bans and requirements for total up-front pricing.

But that leaves many loopholes. So consumers need to read ads, bills and contract terms carefully to catch common junk-fee strategies, such as advertising a low base price and then springing fees on you just as you’re about to pay, or dripping them in piecemeal through the shopping process.

Red flags include prices advertised with asterisks or terms such as "starting at" or "as low as."

"Surprise fees, by definition, are a surprise," notes Neale Mahoney, a Stanford economist and coauthor of the annoyance economy report.

Cancel strategically.

More gotchas: automated subscription charges that begin after a free trial period ends and auto renewals. Both practices are allowable by law, as long as the company has notified you about them.

To reduce the subscription creep that can result, Pijus Bulvinas, a Houston-based certified financial planner, suggests you set up an alert on your phone whenever you sign up for a free trial to remind yourself to cancel three days before a charge is scheduled. He also recommends looking through your monthly bank and credit card statements to identify recurring charges for services you may no longer use.

Don’t want to spend time canceling those services? For a fee, some budgeting apps and bill-negotiation services will do it for you, such as Rocket Money ($7 to $14 a month for premium) and Experian’s Bill Fixer ($24.99 a month).

Shop around in advance.

Another tactic companies employ to slip additional fees by you is to use up your time so that you're in a rush when you finally settle the bill, hoping you either won’t notice the extra charges or will eat the cost just to get on your way.

John W. Van Alst, a senior attorney for the National Consumer Law Center, notes that some car dealers, for example, use a strategy called de-horse the consumer. "They say, ‘We’ve got to send your trade-in back to the mechanic,’ then they keep it there for three to four hours" to prevent you from driving to another dealership to compare prices.

The antidote is researching ahead of time by, say, calling several dealerships to get all-in prices for your preferred model. Car buyers can also save thousands by lining up financing at their bank and exploring options with their insurance company rather than relying on a car dealer for the entire package.

Fight back.

You’re most likely to successfully challenge an add-on charge and get a refund if the fee appears to violate recent bans or deceptive-advertising laws. If that’s the case, filing complaints with your state attorney general and the FTC could bring prosecutors to your aid.

If the fee isn’t illegal but seems unfair, Weinstock suggests telling the provider you "are disappointed with the company for not being transparent and you won’t use their services again." If that doesn’t net you a refund, try disputing the charge on your credit card.

You can also post on review or social media sites. Because junk fees are so unpopular, such public pressure may enable you to turn caveat emptor (Latin for "buyer beware") into caveat junk-tor: Junk-fee chargers beware!

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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Another encouraging inflation reading and a positive session for several mega-cap stocks lifted the broad market Wednesday. A solid round of earnings reports also boosted sentiment, though gains were capped by a down day for chip stocks.

Ahead of the open, the Bureau of Labor Statistics (BLS) said the Producer Price Index (PPI), which measures what businesses pay suppliers for goods, fell 0.3% from May to June. Year over year, wholesale prices were up 5.5%.

"Nearly two-thirds of the June decline in the index for final demand goods can be traced to prices for gasoline, which dropped 12.0 percent," the BLS said.

Core PPI, which excludes volatile food and energy prices, rose 0.2% month over month and 5.1% year over year.

The inflation readings came in better than economists expected, while Wall Street also welcomed downward revisions to the PPI for both April and May.

"The PPI report's largest new piece of information is its downward revisions to inflation in the last few months," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank.

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.

While Adams believes the cool inflation readings, also seen in the June CPI report, will keep the Federal Reserve on hold when it meets in two weeks, he notes that "it's hard to feel too excited about last month's drop in producer prices, which largely reflected lower energy prices — prices which rebounded in the first half of July as energy traffic through the Strait of Hormuz slowed."

Nevertheless, the blue-chip Dow Jones Industrial Average added 0.3% to 52,658 today, while the broader S&P 500 (+0.4% at 7,572) and tech-heavy Nasdaq Composite (+0.6% at 26,269) closed higher too.

Mega caps rise, but chip stocks struggle

Big gains in several mega-cap stocks helped buoy the main indexes today, with Amazon.com (AMZN, +3.0%), Apple (AAPL, +4.0%), Microsoft (MSFT, +2.8%) and Alphabet (GOOGL, +3.2%) all closing higher.

But the day's upside was contained by another negative session for several semiconductor stocks. Micron Technology (MU), for one, dropped 8.0% and is now down 22% since the start of July. Sandisk (SNDK) fell 8.1% today and is off 29% month to date.

BlackRock pops on earnings, Conagra falls on dividend cut

Over on the earnings calendar, BlackRock (BLK) jumped 6.6% after the asset management firm reported better-than-expected second-quarter earnings. Additionally, BLK became the first investment company to have assets under management top $15 trillion.

Conagra Brands (CAG), on the other hand, fell 0.4% after the Duncan Hines parent swung to a net loss in its second quarter. On an adjusted basis, CAG beat analysts' per-share earnings estimate, though revenue fell short.

The company also halved its dividend. "Resetting our dividend to an annualized rate of $0.70 per share proactively realigns our capital allocation, accelerates progress toward our leverage target, supports critical investments, and strengthens our financial flexibility, including the ability to shape the portfolio over time," said CEO John Brase, who stepped into the position in early June.

Today's decline is only more of the same for the struggling consumer staples stock, which is down 30% since mid-February.

PayPal has its best day ever

PayPal Holdings (PYPL) was also in focus Wednesday, with shares jumping 17.2% — their biggest one-day gain since the payments processor was spun off from eBay (EBAY, +0.2%) in 2015.

Boosting the financial stock were reports that financial services platform Stripe and private equity firm Advent International offered to buy PayPal for $53 billion, or $60.50 per PYPL share — a nearly 28% premium to its July 14 close.

PYPL has struggled in recent years and is down more than 80% from its all-time high near $310 in 2021.

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The third-place match of the men's World Cup is hardly a consolation prize. In fact, it's usually among the most exciting matches of the tournament, as teams play with nothing to lose, leading to higher-scoring matches.

This makes the match in Miami a must-attend experience for any soccer fan, not only because of the excitement of the World Cup, but also the diverse array of things to do and see in Miami.

The match kicks off at 5 p.m. EST in Miami Stadium in Miami Gardens on Saturday, July 18. I'll show you some of the best Hilton hotels to consider for your trip, depending on what you want to get into, along with a few suggested attractions to make your stay memorable.

Make Miami part of your World Cup vacation

Miami is one of my favorite cities. Each neighborhood has its own unique flavor and feel.

Little Havana is the perfect destination for Cuban culture, art and amazing food; Brickell is a downtown hotspot where locals hang out, and Wynwood is an artistic gem known for jaw-dropping street murals, art museums and some of the city's best breweries.

The one thing I recommend when visiting is to take your time while traveling, as traffic is a beehive, even on the weekends. The other thing to keep in mind is that Miami Stadium isn't in downtown Miami; it's north of the city, about a 20- to 25-minute drive.

Thankfully, Miami is offering free shuttles for the event with proof of ticket. Here are the shuttle pickup locations:

• Golden Glades Multimodal Transit Station: 15890 NW 7th Ave, Miami.
• Aventura Brightline Station: 19796 W Dixie Highway, Miami.
• Dr. Martin Luther King Jr. Plaza Metrorail Station: 6205 NW 27th Ave, Miami. No on-site parking is available.
• Seminole Hard Rock Hotel & Casino: 1 Seminole Way, Hollywood.

Knowing where to stay can help you plan a trip that includes the World Cup match and other attractions. Here are some suggestions based on different locales:

Close to the stadium recommendations

If you're looking for a quick trip where you get to the match quickly while enjoying time in your hotel, here are a few options to consider:

• Hilton Miami Aventura: The hotel is the perfect choice for convenience and relaxation. It features an upscale rooftop pool and quick access to Sunny Isles Beach via the afternoon shuttle.
• SERENA Hotel Aventura Miami, Tapestry Collection by Hilton: This charming boutique hotel offers a buffet breakfast, breathtaking views of the Miami skyline and is roughly 6 miles from the stadium.

Live the coastal life, Jimmy Buffet style

Meanwhile, if you're in town not only for soccer, but also want to relax and take in some rays on a beach, where you stay will matter a lot. There's Fort Lauderdale, the sleepy yet affluent suburb to the north of Miami, offering exceptional beach views, great restaurants and a quieter neighborhood vibe.

And it's the better overall beach experience compared to Miami. Here are the top stays on the coast:

• Hotel Maren Fort Lauderdale Beach, Curio Collection by Hilton - This stunning hotel offers amazing beachfront views, and you can walk to shops and restaurants. There is also a hotel shuttle to Fort Lauderdale Airport (for a fee).
• Beach House Fort Lauderdale, a Hilton Resort - If you're searching for the ultimate beach experience, look no further than this hotel. It features a wraparound deck, spa and condo-style rooms for the ultimate escape from the bustle.

Experience the local Miami vibes

If you want to experience the vibrant downtown core, here are a few places to consider:

• Hampton Inn & Suites Miami Brickell-Downtown: This hotel, nestled in downtown, has a rooftop pool, easy access to restaurants and shops and a daily hot breakfast.
• Hampton Inn & Suites Wynwood Design District: The hotel's design is a tribute to Wynwood's exceptional art culture. The hotel is among the highest-ranked in the area, with walkability to Wynwood Walls and downtown Miami.

Extend your trip with these ideas

One of the perks of Miami is being so close to unique attractions, such as:

• Take the train to Orlando: Known as the theme park capital of the world, this is a perfect family-friendly day trip, easily accessible via the Brightline high-speed rail service that connects Miami directly to Orlando.
• Head to Key Largo: A slower-paced, oceanic oasis about 60 miles from Miami. It's an ideal spot for snorkeling, scuba diving, glass-bottom boat tours and kayaking for a relaxing post-match escape.
• Explore the Everglades: Taking an airboat through the Everglades is a surreal experience, allowing you to explore and learn about the wildlife and the area.

How to choose the right hotel for your World Cup trip

As you plan your stay, it's important to consider the full cost of the trip, including transportation, parking, resort fees and meals, rather than room rates alone. Also be mindful of your hotel's cancellation policies and transportation plans, as traffic the day of the match will be very busy around the stadium.

The third-place match can be more than a one-day event: With the right home base, it can become the starting point for a family vacation, beach getaway or Florida Keys escape.

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If you're a frequent flyer, you likely have a preferred airline — and a credit card to match. These cards offer significant value, from free checked bags and intro bonuses to points that add up to free flights.

To identify the best airline credit card reward program, we asked you to rank them in an online survey for the 2026 Kiplinger's Readers' Choice awards conducted over the winter. Over 4,000 readers participated in the survey, ranking airline credit card reward programs on three factors: Customer service, most recommended and overall satisfaction.

For the third consecutive year, Southwest Airlines won the best overall award for airline credit card programs. Here are three reasons our readers recommend them, along with some recent changes Southwest made that impact your travel.

1. Tailored rewards: A Southwest card for every traveler

You can get three different Southwest credit cards. The Rapid Rewards Plus card gives you 3,000 points on your cardmember anniversary. The Southwest Rapid Rewards Premier card has a 6,000-point anniversary bonus, and the Southwest Rapid Rewards Priority Card offers a 7,500-point anniversary bonus.

On top of that, each card offers cash-back incentives (in the form of points) for purchases made with Southwest. The Priority card earns you the most, with four points per dollar spent on Southwest purchases.

It is also the quickest way to obtain A-List status. A-List status is Southwest's tier-based loyalty program that offers perks such as priority boarding, a dedicated check-in line and bonus points on flights.

To earn A-List status, fly 20 one-way routes or earn 35,000 qualifying points in a year. Cardholders earn 2,500 Tier Qualifying Points toward A-List status for every $5,000 spent.

2. The fastest route for free travel for two

The Companion Pass is among the most valuable travel benefits, as it allows you to bring a companion on your flights for free, excluding taxes and fees. Each Southwest card offers you a 10,000-point bonus every year.

One reader said, "By timing the bonus offer correctly, you can get a companion pass for almost two years - well worth the effort to concentrate spending on this card!"

This bonus is a major reason why readers cite these cards as the fastest route to free travel for two. By maximizing your Southwest purchases and using these annual boosts, you'll reach the 135,000 points needed for the pass. You can also qualify with 100 one-way flights in one calendar year.

3. Responsive service and tech that makes travel easy

One reader summed up their experience perfectly: "I have called customer service many times, and they are VERY helpful." This also correlates with a recent J.D Power airline satisfaction survey that ranked Southwest highest in customer satisfaction in the economy/basic economy section for the fifth consecutive year.

Along with customer service, having an easy-to-use app is integral if you encounter delays or cancellations. I've flown a few times with Southwest this year, and even with delays, I find changing my flights through the app a quick way to get travel back on schedule without standing in a theme park-sized line to speak with customer service.

Keep in mind too that Southwest made some pretty significant policy changes. Now, you have assigned seating like any other airline. Also gone are free checked bags. Southwest charges $35 for your first checked bag and $45 for your second. However, if you have a Southwest credit card, your first checked bag remains free.

While our readers ranked Southwest the highest airline, other airlines also made our rankings:

• Alaska Airlines
• Delta Air Line credit cards
• JetBlue credit cards

Overall, Kiplinger readers favor Southwest for its responsive customer service, diverse card offerings and bonuses that make it easier to obtain a Companion Pass. While some of the recent changes (doing away with free luggage and assigned seating) might perturb some passengers, if you have a Southwest card, your first bag will still fly for free, making the card's perks even more valuable.

Want to see how our readers ranked your favorite airline? Visit our Kiplinger Readers' Choice best airline credit card rewards programs to see our full ranking and what our readers liked about each one.

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Roth conversions have recently become one of the most popular retirement tax planning strategies. Financial headlines often promote them as a way to create tax-free income, reduce future required minimum distributions (RMDs) and leave a more tax-efficient legacy to heirs.

For many retirees, those benefits are real.

But Roth conversions aren't a one-size-fits-all solution. In fact, as a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that converting retirement assets at the wrong time can result in paying more taxes than necessary and reduce your long-term wealth.

The key question isn't whether Roth conversions are good or bad; it's whether paying taxes today will save you on taxes in the future (I wrote a bestselling book all about taxes — you can request a free copy here).

Below are six situations where retirees may want to think twice before converting.

1. You don't have a pension

One of the biggest factors in determining whether a Roth conversion makes sense is your expected future tax bracket. For retirees without a pension, their future taxable income is often lower than it was during their working years, as many rely primarily on Social Security and modest withdrawals from retirement accounts.

As a result, they could remain in relatively low tax brackets throughout retirement.

Today's tax code also includes a generous standard deduction (up to $32,200 for 2026). For some retirees, that deduction might shelter most or even all of their taxable income.

If you expect to stay in a lower tax bracket for life, voluntarily accelerating taxes through a Roth conversion might not provide as much benefit.

By contrast, retirees with substantial pensions often face a different reality. Pension income can create a permanent tax floor that follows them throughout retirement, making Roth conversions far more attractive in certain cases.

2. You have less than $500,000 in tax-deferred accounts

Your account size matters. When evaluating Roth conversions, it's important to consider future RMDs. Starting at age 73 (or 75 for many younger retirees), the IRS requires withdrawals from traditional IRAs and other tax-deferred retirement accounts.

However, smaller account balances produce smaller RMDs.

For example, a retiree with $500,000 in a traditional IRA might have an initial RMD of roughly $20,000. Combined with the standard deduction and other available tax benefits, that withdrawal could have little impact on their overall tax situation.

If your retirement savings aren't large enough to create a meaningful future tax burden, converting assets today could mean paying taxes earlier than necessary without generating significant long-term savings.

3. Your tax rate today is higher than it will be in retirement

At its core, a Roth conversion is a tax-rate arbitrage decision. You're choosing to pay taxes now because you believe you'll pay the same or even a higher rate later. This strategy falls apart if the opposite is true.

Consider someone in their peak earning years who is currently in the 32% federal tax bracket. If they have no pension and moderate retirement savings, they may eventually find themselves in the 12%, 22% or even lower brackets after they retire.

In that scenario, converting assets while working could mean prepaying taxes at a significantly higher rate than what would have been owed later.

Before converting, retirees should estimate their likely retirement income rather than assuming their future tax rate will automatically be higher.

4. You're planning to retire early

One reason not to do Roth conversions today is that you could have a better opportunity later. Early retirement often creates what planners call a "tax window": A period after earned income stops but before Social Security, pensions and RMDs begin.

For example, someone retiring at age 58 might have several years when taxable income drops dramatically. During those years, they can often perform Roth conversions in much lower tax brackets than they could while working.

This window can be particularly valuable because it could allow retirees to:

• Convert assets before Social Security becomes taxable
• Avoid increasing Medicare premiums tied to higher income
• Fill lower tax brackets more efficiently
• Reduce future RMDs

Rather than converting aggressively during high-income working years, some retirees may benefit from waiting until these lower-income years arrive.

5. Your children might be in lower tax brackets than you

Many Roth conversion discussions focus on leaving tax-free assets to heirs. This can be an advantageous legacy planning strategy, but it isn't always the right answer.

Today's inherited IRA rules generally require most non-spouse beneficiaries to empty inherited retirement accounts within 10 years. Because of this rule, many parents assume they should convert everything to Roth accounts, but there are considerations to think about.

The better question is: What tax bracket will your children be in when they inherit the money?

If your children have higher incomes than you, significant retirement savings of their own or expect to remain employed during those 10 years, Roth conversions may make more sense because each of these could result in your children paying more taxes down the road than you would have paid.

But if they're likely to be in lower tax brackets than you, allowing them to inherit traditional IRA assets could result in a lower tax bill being paid across generations.

Legacy planning shouldn't focus only on your tax rate, but should also account for the tax situation of the people who will ultimately receive the assets.

6. You're single today but expect to marry

Tax brackets are not static. A single retiree who expects to get married in the near future could gain access to larger tax brackets and a higher standard deduction through married-filing-jointly status.

In some situations, waiting until after marriage to perform Roth conversions can create additional flexibility and allow larger conversions at lower effective tax rates.

This isn't a common planning strategy, but it's one that can be overlooked when evaluating conversion opportunities.

Bonus consideration: You're moving to a lower-tax state

State taxes can significantly influence the math behind a Roth conversion. Someone working in a high-tax state, such as California, may pay an additional 7% to 10% or more in state income taxes on converted dollars.

If that same person plans to retire in Florida, Tennessee or another state with no income tax, waiting would likely generate sizable tax savings.

In some cases, the difference between converting before and after a move can amount to tens of thousands of dollars.

The bottom line

Roth conversions can be an incredibly effective tool, especially for retirees with pensions, large tax-deferred balances and concerns about future taxes. But the goal isn't to convert simply because Roth accounts sound attractive. The goal is to minimize your lifetime taxes.

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• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You

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 feel like we'll never actually retire."

"We make good money. But what retirement? It keeps moving further away."

"I don't want to abandon my kids. But I also don't want to work until I'm 67 to make sure they're OK."

These aren't quotes from struggling households. They're what I hear regularly from Gen X professionals, dual-income earners in their late 40s and early 50s with real portfolios and real incomes.

They're high earners with strong intentions — and a quiet but growing line item that almost none of them budgeted for: The Bank of Mom and Dad.

Picture this household: Both spouses are 49 with a combined income of $400,000 and an investment portfolio of $1.5 million. They want to retire at 60 to live on $175,000 a year in retirement, but feel as if they've finally earned the life they've been building.

Yet, $50,000 a year is quietly flowing out of that household to support two adult children, $25,000 each.

• One is 22, in her final year of college and living on campus but relying on her parents for tuition, a car, insurance and everyday expenses.
• The other is 27, recently engaged, living at home, needing help with a wedding and, eventually, a home down payment.

Neither child is a failure. Both parents are generous. But without a plan, that $50,000 is on its way to $70,000. In the 11 years before this couple wants to retire, that unstructured support will cost them far more than money.

People in these circumstances feel behind because they are. It's not because they failed, but because no one helped them plan for this.

The situation is fixable, but only if it changes before the window closes.

The Gen X retirement squeeze is real and getting worse

Research by the Alliance Retirement Income Institute found that Gen X is the least financially prepared generation for retirement by nearly every measure. While Baby Boomers dominate the headlines, Generation X faces an even greater retirement crisis.

In 2025, the eldest Gen Xers entered their 60s, with multiple studies highlighting their lack of retirement preparedness, compounded by their status as a sandwich generation simultaneously caring for aging parents and supporting young adult children.

Meanwhile, roughly one in three adults ages 18 to 34 in the U.S. live with a parent, according to 2025 Census data, up slightly from the year before. A growing share aren't just living at home; they're financially dependent, sometimes deeply so.

For the theoretical household described above, the $50,000 in annual support isn't the only problem. It's what that number becomes. If support continues growing with life events, the wedding, the down payment, extended college costs, ongoing lifestyle needs, that figure reaches $70,000 per year with no defined exit point.

Over the 11 years before their target retirement at 60, unchecked support will have redirected hundreds of thousands of dollars that could have been compounding in retirement accounts, brokerage investments, and tax-advantaged savings.

That's not a small gap. That's a retirement.

One question before we run the numbers

I want to start where I start with every client, with a question I've asked clients for years: "Are you content with the financial and emotional investments you have placed into your adult children thus far?"

If the answer is yes, that doesn't mean you continue indefinitely. It gives you permission to transition from guilt to intention, moving from reactive support to aligned support.

If the answer is no, that doesn't mean you've failed. It means you have clarity.

This question is the foundation of my work on boomerang parenting and what it costs Gen X families, and I've explored it in depth in my Bank of Mom and Dad planning guide.

What I've found across thousands of conversations is that most parents aren't irresponsible. They're unresolved. They haven't yet asked the question that turns support from a reflex into a plan.

What the numbers show

To fund $175,000 annually in retirement, using a 4% withdrawal rate as a planning baseline, this couple need about $4.375 million at age 60. They have $1.5 million today. That leaves a gap of roughly $2.875 million to build in 11 years, achievable with disciplined savings and compounding, but only if their dollars are pointed in the right direction.

Currently, $50,000 per year is flowing to adult children. If the 22-year-old transitions to financial independence after graduation but the 27-year-old's needs continue to grow through wedding costs, a down payment, ongoing lifestyle support after marriage, that figure reaches $70,000 or more per year with no defined end.

Ameriprise Financial found that working parents contribute 2.3 times more to their adult children than to their own retirement accounts each month. For this household, that ratio is quietly becoming true.

Just as the structure of an adviser's fee can quietly compound against retirement outcomes over time, so can unstructured household outflows. The Bank of Mom and Dad is one of the largest untracked line items in a Gen X financial plan.

The compounding cost of that drift is measurable. Here's the planning illustration:

That $510,000 to $625,000 difference is not a rounding error. It's the gap between retiring at 60 and working until 63 or 64. It is the gap between retiring with confidence and retiring with the same anxiety that followed this household through its peak earning years.

"We don't want to abandon them. We just don't know how to stop."

That's a conversation worth having before the numbers get worse.

The catch-up window: Use it or lose it

What makes the next decade specifically critical for this Gen X household is that the tax code is actively rewarding people in their situation, if they act.

For 2026, participants in most 401(k), 403(b), governmental 457 plans and the federal government's Thrift Savings Plan who are 50 and older can generally contribute up to $32,500 each year. That's a $24,500 base contribution plus an $8,000 catch-up for those 50 and older.

The SECURE 2.0 Act introduced super catch-up contributions for those ages 60 to 63. For 2026, the super catch-up limit is $11,250, higher than the standard $8,000 catch-up available to those 50 and older, and designed to help those closest to retirement maximize their savings in the final stretch.

For a dual-income household, this is significant. If both spouses contribute maximally in their 50s and into their early 60s, the combined annual contribution capacity in employer-sponsored plans alone exceeds $65,000 per year, before IRA contributions and brokerage investments.

One note for high earners: Starting in 2026, if you earned more than $150,000 in FICA wages in the prior year, catch-up contributions in employer-sponsored plans must be made on a Roth after-tax, basis.

For a $400,000 dual-income household, this almost certainly applies. This isn't a penalty. Roth contributions build tax-free retirement wealth, but it requires coordination with your plan and your adviser.

Every dollar redirected from unstructured adult-child support into catch-up contributions is a dollar that compounds tax-advantaged for 10 or more years and avoids taxation in retirement. For high earners in peak earning years, this is one of the most direct financial moves available.

The five-step plan for Gen X parents running the bank

Step 1: Get aligned with your spouse or partner first.

Before any conversation with your adult children, get aligned emotionally and financially with each other. Conflicting messages, one parent holding firm while the other quietly supplements, destroy planning integrity and create resentment in both directions.

This alignment conversation covers three questions:

• How much can we afford annually without compromising our retirement security?
• What are we willing to support?
• What's the exit strategy?

Unity is not about being harsh. It's about being honest with each other before you can be honest with your children.

Step 2: Audit the real numbers.

Many parents are genuinely surprised when they total what they're spending on adult children annually. Housing, food, cellphone plans, car insurance, credit card transfers, tuition extensions, medical costs and emergency payments that recur like clockwork all add up to a real line item. For this example household, $50,000 is only the beginning of an honest audit.

Compare that number with current retirement contribution rates, brokerage account contributions, debt-reduction acceleration and lifestyle goals that have been postponed. Seeing trade-offs clearly, in actual dollars, removes guilt and restores agency.

Step 3: Distinguish between support types and set a timeline.

Not all support is equal. A 22-year-old in her final year of college has a clear exit point. A 27-year-old recently engaged and still living at home, needing wedding funds and a down payment, represents a much longer and more open-ended financial commitment if left unstructured.

Ask explicitly: Is this support a bridge or a baseline?

• Time-limited essentials cover final semester costs, a specific medical event or a relocation deposit. These have natural endpoints. Fund them clearly and close the chapter.
• Intra-life transfers are intentional gifts toward wealth-building milestones such as a home down payment or an emergency fund. These can be profoundly impactful and might carry more meaning than a post-death inheritance. They should be deliberate, budgeted and non-recurring.
• Lifestyle subsidies include ongoing rent, car payments, credit card transfers and recurring lifestyle support. These are the most consequential category because they rarely have a defined exit and tend to grow, not shrink, over time.

For the 27-year-old in this household, a one-time, clearly bounded contribution toward a wedding or down payment with a specific ceiling is fundamentally different from continuing open-ended household support into the couple's first years of marriage. Define it now, before the number drifts.

Step 4: Redirect with intention.

If this household redirects $20,000 annually of unstructured support into retirement and after-tax accounts, starting in year three when the 22-year-old finishes college and becomes self-supporting, the compounding difference in the following eight years is substantial.

If both spouses max out 401(k) contributions including catch-up provisions starting at age 50, the annual retirement contribution capacity climbs well above $60,000 per year, enough to put the $4.375 million retirement target within reach.

An after-tax brokerage account deserves focused attention. Unlike retirement accounts, brokerage accounts provide liquidity before age 59½, flexible withdrawal options and the ability to fund retirement expenses from ages 60 to 72 before required minimum distributions begin. For a household targeting retirement at 60, this account isn't optional; it's essential.

Step 5: Have a compassionate, adult conversation.

The financial plan is only as effective as the conversation that introduces it.

With the 22-year-old, the conversation is relatively direct: There is a clear graduation date, and with graduation comes a transition to financial independence. You're there for genuine emergencies, a health crisis or an unexpected job loss, not ongoing lifestyle support. This is not rejection; it's the clearest expression of belief in her capability.

With the 27-year-old, the conversation requires more care. He's newly engaged, wants to build a life, and has been living inside the support structure of his parents' home. Be clear about what you can offer — perhaps a defined contribution toward a wedding or down payment with a specific amount and a specific end date — and equally clear that ongoing housing and lifestyle support has a sunset.

Frame it as preparation, not withdrawal. The boundaries you set today protect both your retirement and his long-term resilience.

Support without structure breeds resentment. Structure without compassion breeds distance. The goal is neither.

What intra-life transfers can do that inheritances can't

The most meaningful financial gifts you can give your adult children might be the ones you give while they're in their 20s and 30s, when a down payment helps them build equity for 30 years, or when early retirement account seeding gives compound growth decades to run.

In my experience, both parents and their adult children often say the same thing when this comes up: They would rather the money have meaning now, when it can change the trajectory of a young family's life, than arrive later as part of an estate settlement.

The key is intentionality. An intra-life transfer that is bounded, purposeful and budgeted into your financial plan is fundamentally different from ongoing support that grows without definition or consent.

For the 27-year-old preparing to buy a home, a structured gift of $20,000 to $25,000 toward a down payment, planned, finite and clearly communicated, might do more lifetime good than a far larger sum left in an estate. It also carries more meaning to both the giver and the receiver when it's given with intention rather than obligation.

Aligned generosity and aligned retirement savings are not in conflict. Your financial decisions should reflect how you actually want to live, not just how you feel in the moment.

Related Content

• How to Help Your Adult Kids Without Hurting Your Retirement
• The Real Cost of Funding Adult Children: Postponing Retirement
• Before You Give Money To Your Kids, Ask Yourself These 3 Questions
• High-Income But Low Confidence? This 5-Point Plan From a Financial Planner Can Fix That
• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth

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.

Long-term care can become one of the biggest expenses in retirement. Yet, traditional long-term care insurance doesn't fit everyone's budget or needs.

Rising premiums and stricter underwriting have pushed many people to seek more flexible ways to protect their savings and future care choices.

We'll cover what you need to know about long-term care insurance alternatives with modern strategies for wealth protection.

What long-term care policies cover

Long-term care insurance (LTCI) helps pay for the kind of support many people need as they age. Think of assistance with daily activities such as bathing, dressing, eating, walking and buying groceries.

Policies typically reimburse a daily or monthly amount for such services as in-home aides, adult day care, memory care and skilled nursing. The goal Is to preserve assets and give families options when health needs change.

Bryan Henry, president of PeterMD, recommends looking beyond conventional insurance and finding alternatives for long-term care.

"Traditional LTCI has become harder to buy and harder to keep," Henry says. "Premiums run high, which can be unpredictable. Policy language is dense. Benefits can be limited or exclude certain situations.

"Many insurers have left the market over the past decade, and those remaining often require strict medical underwriting. That's why more people are now looking for flexible alternatives."

Here are some strategies to consider.

Long-term care insurance

Hybrid insurance products

Hybrid insurance policies combine life insurance or annuities with long-term care benefits. If you need care, the policy accelerates benefits to cover it. If you don't, your heirs receive a death benefit, or you can access the cash value.

These policies typically come with guaranteed premiums or at least more predictable funding than stand-alone LTCI.

On the tax front, many hybrid benefits are treated as tax-free when used for qualified long-term care under federal rules. See IRS guidance related to qualified LTC benefits and Form 1099-LTC.

Some policyholders use a tax-free 1035 exchange from an existing life insurance policy or annuity to fund a new hybrid contract. Check FINRA's overview of 1035 exchanges.

Annuities with long-term care riders

Annuities can be customized with riders that boost income, or they can provide extra benefits if you become chronically ill. You're essentially building a baseline retirement paycheck with an added layer that helps cover care if needed.

Some riders multiply your monthly benefit for a set period if you need assistance with the activities of daily living. Others waive certain fees during a qualifying care event.

These designs vary widely by carrier, so, you need to understand the contract language, such as how benefits trigger and what counts as covered care.

Health savings accounts (HSAs)

If you're covered by a high-deductible health plan, an HSA can be surprisingly powerful for future care.

HSAs come with a rare triple-tax advantage:

• Contributions might be deductible or pretax
• Funds can be invested and grow tax-free
• Withdrawals for qualified medical expenses are tax-free

Long-term care services and a portion of LTC insurance premiums might qualify as deductible under IRS rules. See IRS Publication 969 and Publication 502.

As contribution limits change each year, check the current numbers before you automate deposits.

Alternative investment strategies

Self-funding and portfolio diversification

Some households prefer to self-fund care. That doesn't mean ignoring the risk; it means creating a dedicated long-term care reserve in your financial plan and investing it thoughtfully.

You might segment a portion of your portfolio as a long-term care reserve sized to your goals and family health history. Match some of that reserve to inflation-protected assets or short-duration bonds to reduce sequence risk.

A TIPS ladder or a balanced mix of stocks and bonds can help keep pace with rising care costs. Keep cash for the first six to 12 months of potential care, then invest the rest for growth and resilience.

You can also add stopgaps (such as a smaller hybrid policy) to cap worst-case scenarios while still relying on investments to cover the bulk of expenses.

Real estate investment

Real estate can serve two purposes: An income source now and a fallback for care later. Here are some potential investments:

• Rental properties can generate predictable cash flow
• Real estate investment trusts (REITs) offer a simpler way to access the sector without being a landlord
• A reverse mortgage can turn home equity into tax-free loan proceeds to pay for in-home help or facility care, but you need to understand interest accrual and repayment rules before signing

Jeffrey Zhou, CEO and founder of Fig Loans, notes that alternative investment strategies work best when real estate and self-funding are integrated into a broader retirement plan. He emphasizes that both portfolio-based funding and property assets can complement each other in managing long-term care costs.

"A well-structured approach that combines diversified self-funding strategies with real estate can provide steady cash flow in retirement," Zhou explains. "This helps offset rising care costs while preserving the underlying assets as part of long-term wealth."

This perspective highlights how a balanced mix of liquid investments and property income can improve financial resilience. It ensures retirees are not overly dependent on any single source of funding for healthcare and long-term care needs.

Government programs and community resources

Medicare and Medicaid

This is where confusion often creeps in. When it comes to government programs, there's a line drawn between the two:

• Medicare covers medical care, not custodial long-term care. It might pay for limited, short-term skilled nursing or rehab after a qualifying hospital stay. However, it's not going to help with activities of daily living that most people eventually need.
• Medicaid does cover long-term care, but only for people who meet strict income and asset rules, which often means spending down savings first. There's also a five-year look-back period on asset transfers in most states, plus complex spousal protections to navigate.

Proper planning helps you qualify for benefits when needed while protecting your life savings and your home. The key is understanding these programs' rules well before you need care.

Local and community resources

Don't overlook your local support network:

• Area agencies on aging can connect you with home-delivered meals, transportation, caregiver respite and benefits counseling. Eldercare Locator is a perfect example of this alternative access for older people.
• Nonprofits and faith-based groups often offer volunteer services. They provide older people with long-term care.
• Large organizations, such as AARP Caregiving, maintain extensive caregiver guides and checklists you can use right away.

There are more choices than there used to be

Traditional long-term care insurance isn't your only option. With rising longevity and rising costs, planning ahead makes sense, and you have more choices than you used to.

That's why you should consider hybrid life policies, annuities with care riders, HSAs, a thoughtful investment reserve and even targeted real estate. They can work together to protect both your care choices and legacy.

The sooner you prepare for future care costs, the more financial stability you're likely to have later.

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• How to Negotiate to Lower Your Medical Bills: These Strategies Can Help Reduce Your Costs

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

When our children were little, we taught them how to cross the street, brush their teeth and say "please" and "thank you." Many people started the kids doing chores and earning an allowance. We understood that those conversations were part of raising responsible adults.

Then they turned 18.

Somewhere along the way, many parents assumed that talking about money should stop because their children were now adults. Nothing could be further from the truth.

In fact, adulthood is when the most important financial conversations begin.

The American Dream has changed

Today's young adults are navigating a financial landscape unlike any previous generation. Student loan debt, soaring housing costs, rising insurance premiums, inflation, volatile markets and an uncertain job market have changed the traditional path to financial independence.

Many are delaying marriage, homeownership and having children — not because they lack ambition, but because the economics are dramatically different.

What does this all mean? Almost 80% of baby boomers own homes vs only 26% of Generation Zers being able to or choosing that path of homeownership.

And baby boomers are trying to ease their kids' pain (and perhaps creating more pain for themselves) — about 50% of these parents are helping to offset money pressures for their adult children.

Things aren't rosy for any generation

Meanwhile, older parents are facing their own financial realities. Many are working longer than expected, caring for aging parents while helping adult children and worrying whether their retirement savings will last 30 years or more.

In fact, among Americans 65 and older, about one in five is still in the labor force. And many more have odd jobs or are gig workers.

That creates a generation caught in the middle — and a lot of silence.

Silence is not golden

Silence is expensive.

I elevated the topic of teaching kids about money in the 1980s. I have taught families the lessons of finance for decades, and one truth remains constant: Families who talk openly about finances make better decisions together. Those who avoid the subject often create misunderstandings, unrealistic expectations and emotional landmines.

The goal isn't to lecture your adult children. It's to have a conversation between equals.

Start with your own story

Many parents hide financial struggles because they want to protect their children. Others hide financial success because they don't want to create entitlement. Others carry the baggage from when they grew up that the biggest secrets in the household related to money issues.

None of these approaches helps. Adult children benefit from understanding how their parents made financial decisions, overcame setbacks and learned from mistakes.

Tell your offspring about the first house you couldn't afford. The investment that didn't work. The credit card debt you finally paid off. The promotion that changed everything. How you had to take your Social Security early to make ends meet later in life.

Money stories teach lessons that spreadsheets never can.

Be honest about your retirement

One of the biggest misconceptions adult children have is assuming Mom and Dad will always be financially available. They may quietly assume you'll help with a home down payment, pay for grandchildren's education or leave a substantial inheritance.

Those assumptions can create disappointment —or, worse, poor financial decisions — based on deceit.

A healthier conversation sounds like this: "We've worked hard to secure our retirement because we don't ever want to become a financial burden to you."

That's one of the greatest gifts parents can give.

If you plan to help your children financially, explain what that help looks like. Is it a loan? A gift? A one-time opportunity?

What are the expectations? Clarity prevents conflict.

Discuss inheritance before it's necessary

No family enjoys talking about death. But avoiding estate conversations doesn't protect anyone.

Adult children should know:

• Where important documents are located
• Who has financial and healthcare powers of attorney
• Whether there is a will or trust
• Who the executors are
• The family's overall wishes — not necessarily for every dollar, but the overall plan

Surprises after a death rarely strengthen families. Money issues and unclear expectations can tear a family apart. Do you really want that to be your legacy?

Set boundaries without guilt

Many parents continue financially rescuing adult children well into their 30s and 40s. Sometimes that help is appropriate. Sometimes it delays independence.

Before doling out the next pot of money, ask yourself: "Am I solving a temporary problem or creating a permanent dependency?"

Financial assistance should come with conversations, not conditions. Explain why you're helping, how often you're willing to help and what success looks like. Healthy boundaries strengthen relationships.

Respect your kids' financial choices

Your adult children grew up in a different economy. They may prioritize experiences over possessions, rent instead of buy or work remotely instead of climbing a traditional corporate ladder. That doesn't mean they are being financially irresponsible.

Instead of criticizing, ask questions:

• "What made you choose that?"
• "How does that fit into your long-term goals?"

Curiosity builds trust. Judgment shuts conversations down.

The best financial conversations happen long before anyone needs money. Don't wait until there's a medical emergency, job loss, divorce or estate settlement.

Instead, create a family tradition. Have a semiannual "money dinner," where you:

• Review major life changes
• Discuss family goals
• Celebrate financial wins
• Update important documents

Make money as normal to discuss as your vacation plans.

The greatest inheritance

Many parents focus on leaving wealth. I believe our greatest inheritance is wisdom. Money can be spent. But values compound.

If your children inherit confidence, sound judgment, healthy financial habits and the ability to have honest conversations about money, you've already given them something priceless.

The question isn't whether your family should talk about money.

It's whether you'll begin the conversation before life forces you to. Because the families who talk together today are often the families who stay together tomorrow.

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 people have never heard of a "mega backdoor Roth" — and that could prove costly, as it can allow some retirement savers with strong cash flow to save more money each year in a tax-free Roth account.

The mega backdoor Roth is a retirement savings strategy that lets some workers — typically high earners who can save more — contribute more to a Roth account than the normal annual Roth IRA or Roth 401(k) deferral limits allow. "It's a way to put tens of thousands of dollars into a Roth account that you wouldn't otherwise be eligible to do," says Tim Steffen, director of advanced planning at Baird.

This strategy is only available to savers in employer-sponsored retirement plans that include key features that permit it. The catch? Not all 401(k) plans are set up to enable savers to take advantage of a mega backdoor Roth.

A mega backdoor Roth is a two-step process

Whether you are eligible for a mega backdoor Roth depends on the specifics of your workplace retirement plan.

"To do a mega backdoor Roth, an employer has to offer two things to their employees," says Steffen.

First, they must allow the saver to make after-tax contributions to the 401(k) plan. This type of contribution allows you to save more than your plan's annual contribution limit for pre-tax or Roth 401(k) contributions.

Second, the employer must have a Roth 401(k) option that allows the saver to make an in-plan Roth conversion or to take in-service withdrawals to facilitate a rollover to a Roth IRA.

"If your employer doesn't allow both of those things, it's a moot point — you're not allowed to do a mega backdoor Roth," says Christian DiRusso, senior financial adviser at Altfest Personal Wealth Management.

Just one in four (24.1%) workplace 401(k) plans administered by Fidelity Investments give savers the ability to make after-tax contributions to the plan, according to the 1Q26 Fidelity retirement analysis. And only half (50.7%) of plans offer in-plan Roth conversions.

Know the contribution limits

So how does the strategy work? Savers in 401(k) and 403(b) plans who have already maxed out their regular contributions can make additional "after-tax" non-Roth contributions to their employer plan and then move, or convert, those dollars into a Roth 401(k) account offered by the employer via an in-plan Roth rollover or a Roth IRA rollover.

While most savers know their basic annual 401(k) contribution limits, many don't realize that the IRS allows far higher total limits when employer matches and after-tax contributions are factored in. Here is a summary of those 2026 limits:

• Under 50: $24,500 regular limit and $72,000 total limit
• Ages 50–59: $32,500 regular limit (with $8,000 catch-up) and $80,000 total limit
• Ages 60–63: $35,750 regular limit (with $11,250 catch-up) and $83,250 total limit

In 2026, for example, the total an individual under 50 can sock away in a workplace plan is $72,000, according to the IRS 415 annual limit rule. Savers 50 and up can contribute up to $80,000, and those 60, 61, 62 or 63 have a total limit of $83,250.

How a mega backdoor Roth works in practice

Here's a simple example of how the strategy works. Say a worker under 50 maxes out her $24,500 401(k) contribution limit and receives a $5,500 matching contribution from her employer. Her total contribution is $30,000, which allows her to contribute an additional $42,000 in after-tax pay to her 401(k), bringing her total contributions to the allowable limit of $72,000. That extra $42,000 in after-tax savings would then be either moved to the employer's Roth 401(k) plan or rolled over into a Roth IRA.

Wall Street dubs it a "mega" backdoor Roth because a regular backdoor Roth, which starts with making a nondeductible traditional IRA contribution and ends with a Roth conversion, has much lower contribution limits than the mega backdoor Roth. The 2026 max for standard IRAs is $7,500 for savers younger than 50 and $8,600 for those 50 and older, which pales in comparison to the $72,000 and $80,000 respective maximum contributions for a mega backdoor Roth.

Keep an eye out for taxes

Be aware of taxes on the conversion, however. "Whether you convert to a Roth IRA or Roth 401(k), you will need to pay taxes on any earnings included in the conversion (you will not generally need to pay taxes on after-tax contributions you convert, as those amounts have already been taxed)," according to Fidelity Investments.

To avoid taxes, convert after-tax contributions to a Roth account as quickly as possible.

Once those after-tax dollars are moved into a Roth account, they accrue all the benefits of a Roth: tax-free growth, tax-free withdrawals, and no required minimum distributions (RMDs), says Tara Lawson, wealth strategist at U.S. Bank Private Wealth Management.

Who should consider a mega backdoor Roth

High earners. This strategy heavily favors high earners who are locked out of regular Roth IRAs due to income limits but who still want to maximize their tax-free savings. It also works for those who have maxed out their ordinary workplace plan, or who simply want to save more in a Roth. "It's a good strategy for people who have extra money to save," says Lawson. "If you're going to do these after-tax contributions, it's going to be over and above your normal contributions to your 401(k)."

Executives. It's a commonly used strategy for corporate executives, CEOs, and small business owners whose 401(k) plans allow for it, personal finance pros say.

Windfall recipients. The mega backdoor Roth strategy could also be a useful tool if you receive a large bonus or a cash windfall outside of work, such as an inheritance, that allows you to forgo a larger portion of your salary and instead put it toward retirement.

Future high-tax retirees. Getting more retirement savings into the tax-free Roth bucket is particularly beneficial for savers who expect to be in a higher tax bracket in retirement than they are now.

Pros and cons of a mega backdoor Roth

Tax diversification. Executing a mega backdoor Roth boosts the tax diversification of retirement accounts, which gives retirees more flexibility when making withdrawals. It's good to have a bucket of Roth money you can tap tax-free, a bucket of traditional 401(k) dollars that gives you a tax deduction in your peak earnings years, and a bucket of taxable brokerage account funds that are taxed at lower long-term capital gains rates ranging from 0% to 20%.

"Tax diversification is certainly an added benefit of the mega backdoor Roth," says DiRusso.

Cash flow issues. However, DiRusso says the strategy is less attractive for lower earners who may run into cash flow problems by committing too much of their pay to fund retirement savings or people who need access to their money in a few years for, say, a down payment on a home, and don't want their money tied up in a tax-deferred retirement account.

"I recommend the strategy to anyone operating with a big cash flow surplus," says DiRusso. "As long [as a mega backdoor Roth] aligns with their long-term goals and they have the cash to support it, it's something we would advise on doing."

Complexity. You may face hefty tax penalties if you fail to follow the proper steps of a mega backdoor. Work with a financial planner or tax expert to avoid pitfalls.

Should you consider a mega backdoor Roth?

If you're interested in doing a mega backdoor Roth, step one is to check whether it is allowed under your 401(k) plan, financial advisers say.

Remember, this powerful tool is only available to people whose 401(k) plans allow it. But if you get the green light and have extra cash to put to work in a Roth account, it's a winning retirement savings strategy.

Read More About Roth Conversions

• Should You Convert a Traditional IRA to a Roth after 60?
• IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
• Quiz: Understanding Roth Conversions

President Donald Trump rolled back his 20% toll on Strait of Hormuz shipping, though an off-and-on ceasefire in the Middle East continues to roil energy markets and interest rates. But consumer inflation was a lot cooler than expected in June, big banks beat Wall Street forecasts and even conflicting headlines suggest interest in the AI trade remains high.

The West Texas Intermediate crude oil futures contract traded above $80 per barrel for the first time since June 17 and was higher by 2.0% at $79.68 on Tuesday. The 2-year Treasury yield ticked down to 4.189% after reaching a new 52-week high and closing at 4.263% on Monday.

The Bureau of Labor Statistics (BLS) said before the opening bell that the Consumer Price Index (CPI) showed its biggest month-over-month decline since 2020 last month. The June CPI report attributed the move to the steepest slide for gasoline prices since 2022.

Bloomberg, relying on "people familiar with the matter," said South Korea-based Samsung Electronics plans to seek some of the same fortune SK Hynix (SKHY, -9.3%) found last Friday when it completed one of the biggest IPOs in U.S. history.

But Reuters quoted a company spokesperson: "Samsung Electronics is not reviewing ​the possibility of issuing American Depositary ​Receipts." Samsung was up 3.4% on its local exchange, and the Korea Composite Stock Price Index was up 0.7% on Tuesday.

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.

Meanwhile, facing an array of challenges to his authority, new Fed Chair Kevin Warsh is testifying to Congress for the first time since taking his oath of office in May.

Warsh appeared before the House Financial Services Committee today and will testify to the Senate Banking Committee tomorrow about inflation and interest rates.

As Louis Navellier of Navellier & Associates notes, the BLS will release the Producer Price Index (PPI) before the opening bell on Wednesday. "Economists are expecting the overall PPI to decline 0.2% in June," Navellier writes, "so it is widely expected that inflation will also be cooling on the wholesale level."

At the closing bell on Tuesday, the tech-heavy Nasdaq Composite was up 0.9% to 26,107, the broad-based S&P 500 had climbed 0.4% to 7,543, and the blue-chip Dow Jones Industrial Average was higher by 0.02% to 52,508.

GS gets the biggest earnings bounce

Goldman Sachs (GS, +9.1%) was the top-performing Dow Jones stock on Tuesday after management of the heaviest component in the price-weighted index reported expectations-beating second-quarter revenue and earnings.

JPMorgan Chase (JPM, +2.5%) and Bank of America (BAC, +1.9%) also beat Wall Street forecasts and rose.

But Citigroup (C, -5.3%) and Wells Fargo (WFC, -2.5%) exceeded estimates and fell.

C opened higher, but CEO Jane Fraser said during the company's intraday conference call that management is planning additional investments, as well as accelerated job cuts, that could lead to higher costs in the short term.

Wells Fargo, meanwhile, continues to recover after the removal of regulatory restrictions on its asset growth.

Another Black Tuesday for Big Blue

International Business Machines (IBM, -25.2%), which was founded in June 1911 and completed its initial public offering (IPO) in January 1962, had its worst trading day since at least 1968 on Tuesday.

IBM closed with its biggest single-day loss on record, exceeding the 23.7% decline on Black Tuesday, October 19, 1987, after CEO Arvind Krishna said in a letter to shareholders that Big Blue would miss its second-quarter revenue and earnings guidance.

Susquehanna analyst Jamie Friedman reiterated his Neutral (Hold) rating and his $303 12-month target price, citing IBM's quantum computing option. "At the same time," the analyst added, "the other dimensions of the business that comprise the vast majority of revenue are meeting headwinds."

IBM is scheduled to report earnings on July 23.

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Kevin Warsh is making his first official trip to Capitol Hill since he was sworn in as the 17th chair of the Board of Governors of the Federal Reserve System in May.

The Fed chair will tell Congress the central bank has "no tolerance" for high inflation, and cool June Consumer Price Index (CPI) data offers some momentary relief.

But the ceasefire between the U.S. and Iran is over.

And, less than a month after the June Fed meeting and two weeks before the Federal Open Market Committee (FOMC) gathers for a second time under his leadership, Warsh is being challenged by battles on multiple fronts.

What happens at the Strait of Hormuz is well beyond his control. And he's unlikely to say much about attacks on his authority from both the executive branch and the judicial branch.

But it's probably good for all of us if Warsh is seen to be working with FOMC dissidents to establish credibility with central bank colleagues and other financial market participants and stakeholders.

Those markets had been aggressively pricing in higher interest rates ahead of Warsh's two-day testimony, while even President Donald Trump would say, loudly, that he put his man there to cut the federal funds rate, and fast.

In the long run, Warsh will have to consider how far he'll go to meet White House demands. He already must account for other policy choices, such as using tariffs as a tool of foreign affairs and opting for war in the Middle East.

In the longer run, Warsh will be Fed chair after the expiration of President Trump's second term on January 20, 2029.

At the same time, though the Supreme Court has already said the president can't fire Fed governors "at will," the central bank's power as we currently understand it is under active review.

Things are in the saddle, to borrow from Ralph Waldo Emerson, and they're riding Kevin Warsh.

Let's talk about five conflicts, both literal and figurative, driving the narrative around the not-so-new-anymore Fed chair right now and what they mean for the most important central bank in the world for the long term.

1. Warsh v. Greenspan

Warsh wants to be measured by his ability to manage inflation, and he plans to achieve price stability via the fed funds rate. He reiterated that explicit commitment in remarks prepared for his testimony on July 14.

A "monetarist" at heart, his role model appears to be Alan Greenspan. We'll see what happens, though, when Warsh tries to shrink the Fed's balance sheet.

Reversing what started as "quantitative easing" when Warsh was former Fed Chair Ben Bernanke's right-hand man during the global financial crisis/Great Recession will impact bond prices and interest rates.

The thing to remember about Greenspan is not so much the policy details as the mere presence. He was there when markets required assurance about their continuing ability to function, which is really saying a lot if you think about it.

He also gave cover for policymakers on the fiscal side as their processes grew more and more sclerotic, even if they had no idea what he was talking about.

Bernanke, his immediate successor, understood the ultimate assignment, even if he had to clean up messes Greenspan allowed. So, too, did Janet Yellen, then Jerome Powell.

They also made mistakes along the way, each of them. But the up-and-to-the-right trend continues.

See what I mean?

2. Warsh v. Powell

Warsh's immediate predecessor, Powell, is still a member of the Fed board. The former Fed chair is committed to staying in place until legal threats to the central bank's independence are resolved.

He voted in favor of holding rates steady in June. Monetary policy is still important, but Powell is working for a bigger-picture objective at the same time.

This is about independence, the long term, as Powell said in late April, referring to Trump's lengthy campaign to remove him.

"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policies without taking into consideration political factors," he said. "It is so important for our economy, for the people that we serve, that they can depend, over time, on a central bank that operates that way, free of political influence."

Powell said he wouldn't leave the Fed until an investigation into cost overruns for a project to renovate the central bank's headquarters "is well and truly over with transparency and finality," noting that his decisions "will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve."

3. Warsh v. Waller

This is about inflation and interest rates, the short term, as well as Warsh's wish to limit Fed communications. And Christopher Waller, who was considered a potential successor to Powell, is staking out less totemic territory than the ex-chair.

Indeed, as Neil Dutta of Renaissance Macro writes, remarks Waller delivered on the eve of Warsh's congressional testimony suggest this Fed governor "is laying the groundwork for a hike as soon as the July FOMC meeting."

Waller and his colleagues will certainly welcome cooler-than-forecast June CPI data. But that data is subject to what happens in the Middle East.

So maybe July is not a "live" meeting, during which the FOMC will consider raising the fed funds rate. Dutta says Waller understands something else about central banking in this 21st-century moment:

"Let Waller's speech serve as a reminder that while Warsh might be circumspect around his own views, Waller has no problem letting his views be known," the economist observes. "The information void gets filled by the rest of the committee."

4. U.S. v. Iran

Fiscal policymakers make choices, too.

As long as Iran controls the tempo of the war in the Middle East and to the extent the Islamic Republic manages the Strait of Hormuz come peacetime, the effects of the 2026 energy shock will linger.

Uncertainty about oil and gas prices will undermine the economy, simple as that, the Warsh Fed acknowledged in its brief policy statement in June.

The month-over-month data will be noisy. But softness in year-over-year core inflation data suggests the energy shock is relatively contained, and that's definitely comforting for those who'd like to see lower interest rates.

What's discomfiting is that Iran seems to be able to attack critical energy infrastructure targets whenever it feels the need to assert its will, and the Trump administration's Truth Social diplomacy is not working.

5. Trump v. Cook (and Trump v. Barr)

All three branches are in on this play: On June 29, the Supreme Court said President Trump couldn't fire Fed Governor Lisa Cook, yet.

Writing for the majority in Trump v. Cook (pdf), Chief Justice John Roberts said the Trump administration's interpretation of the law would transform the Fed's for-cause protection into at-will employment.

According to Roberts, that's "an interpretive leap out of step with the statute Congress enacted and our Nation's tradition of central banking protected from political interference."

But Roberts left open the possibility that Trump can remove Cook, pending the Fed governor's case against the president in a lower federal court. "To be clear," the chief justice explained, "the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts."

The same day the Court dropped that decision, Trump promised to "take appropriate action immediately" to remove Cook.

And the Roberts majority opinion includes a footnote that opens up the Fed's regulatory function as an avenue of attack. Two dissents focused on this issue, questioning whether and how this oversight fits within the central bank's monetary policymaking.

Associate Justice Amy Coney Barrett asked, “Do all the Federal Reserve's existing regulatory powers have the requisite connection to monetary policy? If not, are they grandfathered in? And is the Federal Reserve unique, or might history sanction other exceptions too? The court does not say."

So, the question becomes, what is central banking? It's not an active case on the federal docket, but the case to test it could very well be Trump v. Barr.

Former Vice Chair for Supervision Michael Barr led the 2023 Federal Reserve Review into the collapse of Silicon Valley Bank (SVB). His report is currently subject to an independent review.

Though current Vice Chair for Supervision Miki Bowman has said it's not about assigning blame, Barr and other former Fed officials are concerned about the purpose and intent of the independent review, as are Senate Democrats.

Barr's term on the Fed board is set to expire on January 31, 2032.

As Capital Account co-writer Ryan Tracy suggests, the Fed's regulatory powers "seem to be a liability to those concerned about monetary policy independence."

Indeed, Associate Justice Clarence Thomas observed in his dissent that the first two U.S. central banks had no executive authority, but the Fed regulates most of the banking economy.

"The president, therefore, may remove Cook for any reason that he wants and by any procedure that he wants," Thomas concludes.

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Tax planning for executives can look very different from standard financial advice. The reason? Your compensation package likely includes a complex mix of salary, bonuses, company stock and deferred compensation — all of which involve tax considerations.

Last year's One Big Beautiful Bill Act (OBBBA) introduced new "tax traps" specifically targeting the executive suite.

In 2026, a $75,000 bonus could lower your net take-home pay if it triggers the wrong phase-out. At this level, what matters isn't what you earn, but what you keep.

The good news from the OBBBA

The OBBBA resolved much of the uncertainty surrounding the expiration of the Tax Cuts and Jobs Act. For high-income earners, there are a few permanent victories:

• Top-rate stability. The 37% top tax rate is now permanent. Without this legislation, the rate was set to revert to 39.6% in 2026.
• QBI deduction. The 20% qualified business income deduction for pass-through entities (S corps, LLCs, partnerships) no longer has an expiration date.
• Estate exemption. The exemption is $15 million per person ($30 million for married couples) in 2026 and is locked in through 2033.
• Bonus depreciation. 100% first-year bonus depreciation has been restored permanently, allowing for the immediate deduction of business equipment costs.

The tax traps to watch out for

While the wins are significant, several new provisions act as a "stealth tax" on executive income.

1. The SALT phase-out.

The OBBBA raised the state and local tax (SALT) cap to $40,400 for joint filers, but it comes with a catch: It only applies to those with a modified adjusted gross income (MAGI) under $505,000.

Above that, the benefit phases out entirely, reverting to the old $10,000 cap by the time you reach $600,000.

Pro tip: Participation in deferred compensation can reduce current-year taxable income.

2. The 2026 AMT reset.

The alternative minimum tax (AMT) is set to kick in harder this year. For married filers, the exemption resets to $140,000 (down from 2025 levels), and the phase-out rate doubles from 25% to 50%.

If you plan to exercise incentive stock options (ISOs) in 2026, you should run an AMT projection first to avoid an unpleasant tax surprise next April.

3. The charitable "cover charge."

Starting in 2026, charitable contributions face a new floor: You can only deduct gifts that exceed 0.5% of your AGI. On income of $800,000, your first $4,000 in donations provides zero tax benefit.

Strategy: Use bunching. Instead of annual gifts, contribute a larger sum (e.g., $50,000) to a donor-advised fund (DAF) in a single high-income year to clear the floor for a meaningful deduction.

4. The 2/37ths deduction limit.

If you're in the 37% bracket, the OBBBA now caps the value of your itemized deductions at 35 cents on the dollar.

This 2% gap makes above-the-line deductions — such as 401(k) contributions and health savings account (HSA) funding — far more valuable because they reduce your income before this cap is applied.

Equity compensation: Where strategy makes the biggest impact

Company stock is often the largest component of executive pay and the primary source of complexity:

Restricted stock units. RSUs are taxed as ordinary income at vesting. If you have the cash to cover the taxes, holding the shares allows future growth to be taxed at lower long-term capital gains rates.

Stock options. Nonqualified stock options (NQSOs) generate ordinary income at exercise. Incentive stock options (ISOs) offer potential capital gains treatment, but the lower 2026 AMT thresholds make them "riskier" than in years past.

Too often, executives, especially those deemed control persons subject to Section 16 reporting, overconcentrate their wealth in company stock.

In addition, there's often internal pressure from the C-suite for high-level executives of publicly traded companies to retain their stock. This can create difficulties in adequately diversifying one's wealth while still indicating confidence in the company.

Advanced executive moves

To maximize efficiency, executives should look beyond the basic 401(k) limits:

The mega backdoor Roth. If your plan allows for after-tax contributions, you can potentially funnel an additional $47,500 into a Roth 401(k) for 2026 (up to the total $72,000 IRS limit), where it grows tax-free.

The PTET workaround. If you're a small-business owner or have consulting income, the pass-through entity tax (PTET) election allows your business to pay state taxes at the entity level. This bypasses SALT income thresholds and remains a key tax strategy under the OBBB.

Deferred compensation (nonqualified deferred compensation or NQDC). These plans allow you to delay income — and the 37% tax hit — until retirement, when you might be in a lower bracket.

However, they're governed by strict Section 409A rules. One wrong move can trigger a 20% excise tax penalty.

Distribution elections under deferred compensation are critical — it makes sense to consult with an adviser to determine how much to defer and what distribution election is most advantageous.

The bottom line

Most executives leave money on the table because their equity, retirement and charitable strategies aren't managed in concert with one another.

In the OBBBA era, these elements are interconnected. Success requires a coordinated look at how a move in one area changes the math in another.

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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 the saying goes, "You're only as happy as your least-happy child." Any parent or grandparent knows how true that feels.

We may spend a lifetime building financial security, saving for retirement, buying insurance and drafting detailed estate plans. Some families even create spreadsheets spelling out who gets the wedding ring, the family home, the brokerage account, the antique table or the emerald earrings.

All of that planning matters.

But deep down, we do not simply want our children to inherit our assets. We want them to be happy, capable and grounded. That desire is not just emotional — it is deeply human. We are wired not merely to pass on our DNA, but to protect, nurture and help our children thrive.

That is why the greatest legacy we leave may not be financial wealth. It may be what I call "wisdom wealth" — the judgment, values, self-knowledge and purpose that help the next generation use money well and live well.

Financial wealth is what you own. Wisdom wealth is what you have learned.

Financial wealth includes your home, portfolio, retirement accounts, business interests, insurance proceeds and personal property.

Wisdom wealth includes your values, judgment, resilience, faith, gratitude, mistakes, life lessons, decision-making habits and your understanding of what money is actually for.

One can be transferred with documents. The other must be transmitted through lived experience, conversations, examples and intention.

And that is where many families fall short.

The most ignored inheritance

The coming decades will bring one of the largest transfers of wealth in history. Much of that discussion focuses on dollars: Who will inherit, how much they will receive and how taxes can be minimized.

These are important planning questions, but they are not the whole story.

Many families are prepared to transfer assets, but not wisdom.

• Parents may leave behind a well-funded trust, but no explanation of the values that shaped it
• They may leave a brokerage account but never explain how they handled fear during market declines
• They may leave real estate, but never talk about the sacrifice, discipline and patience that made ownership possible

The result is that children may inherit the money without inheriting the mindset that created it. That gap can turn a generous inheritance into confusion, conflict or missed opportunity.

Here are five ways to transfer wisdom wealth while you are still living.

1. Turn family time into wisdom time

In the age of TikTok, Instagram and constant distraction, wisdom is rarely transferred through formal "sit-down talks." It is transferred in ordinary moments, a long walk, a family dinner, a car ride, a vacation, a holiday gathering or a conversation after everyone else has left the room.

One of the most practical things parents and grandparents can do is create recurring time with their adult children and grandchildren. This may mean a combination of weekly dinner, Sunday breakfast, a monthly family gathering or an annual vacation.

Occasions such as birthdays, anniversaries, graduations and promotions are valuable opportunities to get together and celebrate. The tradition matters more than the venue.

Longer trips can be especially powerful. When families travel together, they are removed from daily distractions. Conversations become deeper. Grandchildren see how grandparents make decisions, handle inconvenience, express gratitude, treat strangers and spend money. These experiences often teach more than any planned speech.

If you have the resources, helping pay for these gatherings can bring joy to the entire family and support the transfer of wisdom wealth.

2. Share the stories behind the money

Many children know what their parents own, but not what their parents endured. They may see the house, the portfolio, the business or the retirement account, but not the years of discipline, risk, sacrifice, delayed gratification, mistakes and recovery that created them.

Parents should share the stories behind the wealth. Talk about the first job, the bad investment, the business risk that failed or almost failed, the home you stretched to buy, and the market decline that tested your nerves. Share memories about the period when money was tight, the career decision that changed your life, the opportunity you missed, the mistake you would not repeat.

These stories are not self-promotion. They help the next generation understand that wealth is not magic. It is usually built through compounding, patience, work, judgment, resilience and sometimes luck.

Do not share only victories. Share failures, heartbreaks and the difficulty of accepting what you could not control. In many families, children inherit a sanitized and polished version of their parents' lives. But wisdom often comes from the real and unpolished chapters — the moments of fear, regret, humility and growth.

A child who understands how you stood back up after a mistake is far better prepared to stand back up after their own.

3. Create a family investment conversation

One practical way to transfer wisdom wealth is to involve children in real financial decisions early, long before they inherit significant assets.

Parents can help children fund investment accounts and discuss the difference between saving and investing. They can explain why diversification matters, review basic asset allocation and talk about how emotions affect decisions during market declines.

These investments can open the door to important life and money lessons. Why did the portfolio rise or fall? Why avoid panic selling? How do taxes and risk affect long-term returns? How do you balance enjoying life today with preparing for tomorrow? How much to save and how much to give?

The purpose is not to make children investment experts. It is to deepen relationships, enhance financial literacy and help them build a calm, informed relationship with money before they are responsible for larger sums.

4. Help them build real-life capability

Financial help can be generous, but it is most powerful when it builds capability.

Helping an adult child buy a first home can be more than a gift. It can become a lesson in budgeting, mortgage payments, property taxes, insurance, maintenance, neighborhood selection and the discipline of ownership.

Helping with education can include conversations about career choice, debt, income potential and purpose. Helping with a business idea can include discussion of risk, cash flow, customers, failure and persistence.

The key is to pair financial support with financial education and a deeper relationship. Instead of simply writing a check, explain the thinking behind the help. What is the purpose? What responsibility comes with it?

The goal is not dependency. The goal is capability, the confidence to make good decisions long after your help is no longer needed.

5. Explain how and why your beliefs and values have evolved

Most of us do not see the world at 60 the same way we saw it at 30. Our views about success, money, marriage, parenting, faith, health, ambition, status, generosity and happiness often change through experience, but many parents never explain that evolution to their children.

Tell them what you once believed and what life taught you.

• Maybe you once thought success meant income, but later realized it also required health and relationships
• Maybe you once chased status, but now value peace
• Maybe you once feared risk, but learned that some risks are necessary
• Or perhaps your faith, gratitude or sense of purpose has shifted or deepened through hardship

These conversations give children something more valuable than advice. They give them perspective.

Wisdom wealth is not the claim that parents have all the answers. It is the humility to say: "Here is what I learned. Here is where I was wrong. Here is what mattered more than I expected. Here is what I hope you discover earlier than I did."

The best legacy is more than money

A good estate plan can transfer assets efficiently. A good family legacy can transfer values, judgment and purpose. Both matter.

But if we leave our children money without wisdom, we may leave them resources without direction.

Financial wealth can change a child's balance sheet. Wisdom wealth can help guide them toward a joyful, meaningful life supported by financial security.

Your children may inherit your financial wealth. The deeper question is whether they will also inherit your wisdom wealth.

To learn more about legacy, personal transformation and other related topics, you can order my new book (out today!), The Wisdom and Wealth Solution.

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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.

Millions of taxpayers who make certain tax filing or payment mistakes could get a break from IRS penalties without having to ask.

Starting this summer, the IRS will automatically review taxpayers for First-Time Abatement relief, a program that can waive certain failure-to-file, failure-to-pay, and failure-to-deposit penalties for taxpayers with a clean compliance history.

The agency estimates the change could eventually help more than 1.5 million taxpayers each year. That’s compared with roughly 220,000 taxpayers who reportedly obtained similar relief under the previous process, which required taxpayers to request a penalty waiver after the IRS assessed a penalty.

The new system will roll out for eligible 2025 individual federal income tax returns and 2026 quarterly returns, with a full transition expected in 2027.

But…While the IRS is changing how taxpayers receive penalty relief, the rules for who qualifies for so-called first-time relief haven't changed. Here’s what you need to know.

New IRS automatic penalty relief

Under the previous first-time penalty abatement program, taxpayers generally had to wait until an IRS penalty was assessed and then request relief from the agency by phone, in writing, or using Form 843

That meant taxpayers had to know that penalty relief existed and then take action to request it.

The problem? Some eligible taxpayers never received relief simply because they were unaware of the program or didn't know they qualified. Others found it challenging to obtain IRS assistance by telephone or to complete the required forms and processes without professional support.

The new Automatic Exemption from Penalty (AEP) process essentially moves the review earlier in the process and automates it.

• Now, during return processing, the IRS will check a taxpayer’s compliance history to determine whether the taxpayer qualifies.
• If the requirements are met, the IRS will automatically suppress the penalty before it is ever officially assessed.
• The taxpayer will receive a written notice explaining the relief.

“By automatically applying penalty relief, the IRS recognizes that taxpayers who historically pay on time should not have to make a formal request for relief that is routinely granted," IRS CEO Frank J. Bisignano stated in a release.

Although the process is just beginning, the new automated system is intended to replace the First-Time Abatement process for eligible returns due on or after Jan. 1, 2027.

To qualify, taxpayers generally must have:

• Filed required returns or requested a valid extension
• Paid any tax due or established an approved payment arrangement with the IRS
• No significant penalties during the previous three years (or 12 consecutive quarters for quarterly filers) on the same type of tax return

Keep in mind that the new automated process doesn't mean all IRS penalties will disappear.

The relief generally applies only to eligible failure-to-file, failure-to-pay, and failure-to-deposit penalties. Additionally, certain returns, including information returns and some estate and gift tax returns, are not included.

Also worth noting: This new AEP process doesn't eliminate the underlying tax owed or the interest that accrues on that tax.

Why the IRS changed the first-time penalty process

The change addresses a long-standing problem with First Time Abatement: Eligible taxpayers often missed out on relief because they did not know the program existed or that they needed to request it. That can be notable for some taxpayers, since a failure-to-file penalty, for example, is 5% of your unpaid taxes for each month the return is late, up to a maximum of 25%.

The Taxpayer Advocate Service (TAS) has argued that penalty relief should not depend on whether taxpayers understand the process, can reach the IRS, or have access to professional tax assistance.

National Taxpayer Advocate Erin Collins highlighted that concern when discussing the new system, writing the following in a blog post:

"For years, too many eligible taxpayers missed out on first-time penalty relief simply because they did not know it was available, did not understand how to request it, could not get through to the IRS, or did not have a tax professional advising them. That is especially true for low-income taxpayers and taxpayers who cannot afford representation. A penalty that may seem modest to some taxpayers can be financially significant for a taxpayer struggling to pay rent, utilities, groceries, transportation, or medical expenses."

Take, for example, a taxpayer who filed and paid their federal income taxes on time for years but accidentally files a return late. Under the previous system, that taxpayer could incur a failure-to-file penalty, wait for the penalty notice to arrive, contact the IRS, and request First-Time Abatement relief.

Under the new process, the IRS can review the taxpayer’s compliance history while processing the return and automatically remove the penalty if the taxpayer qualifies.

The three-year clean history

When the IRS talks about a "clean compliance history," that generally means the taxpayer hasn't had a significant penalty assessed during the three years before the penalty year. For taxpayers who file quarterly returns, the IRS will generally look at the previous 12 consecutive quarters.

• A clean history also doesn't mean a taxpayer has never made a mistake on their income tax return.
• The IRS will look at whether the taxpayer has generally met their tax obligations.
• As mentioned, that generally includes timely filing required returns and paying taxes owed/establishing an approved payment arrangement when needed.

Additionally, the three-year lookback applies to the specific (same) return type being filed. So a penalty on a business partnership return won't disqualify your individual filing from automatic relief.

According to the IRS, the three-year rule also doesn't mean a taxpayer can receive relief only once. If a taxpayer receives automatic relief and then maintains a clean compliance history for the required period, that taxpayer could potentially qualify for relief again in the future.

However, if a taxpayer fails the automated "clean history" check and doesn't receive AEP relief, they aren’t necessarily out of luck. Taxpayers can still manually request a penalty waiver under the traditional IRS "reasonable cause" framework, which evaluates various sound reasons for non-compliance.

What happens if you receive an IRS penalty relief notice?

Under AEP relief, the IRS will issue a notice explaining that the penalty wasn't assessed because the taxpayer met the relief requirements. Taxpayers who receive that notice generally don't need to contact the tax agency or take additional action, according to the agency.

However, during the transition period, the IRS says some qualifying taxpayers may still receive penalty notices for eligible 2025 tax-year returns or 2026 quarterly returns.

• If you receive a penalty notice, it's important to review it carefully.
• If you believe you qualify for first-time penalty relief and the penalty wasn't automatically removed, you may still need to request relief under the existing process during the transition period.
• There should be a 1-800 number on the penalty notice for contacting the IRS.

If you want to track whether a penalty was removed, you can also review your official IRS Online Account.

Records there should show whether a penalty was assessed, whether relief was applied, and when the three-year compliance period begins for potential future eligibility.

As always, however, consult a qualified and trusted tax professional if you have questions or concerns about IRS penalties.

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I picked up Strangers: A Memoir of Marriage by Belle Burden expecting a juicy divorce memoir. What I got was a thoughtful, sometimes uncomfortable look at how a marriage can unravel so gradually that, by the end, the person you've shared your life with feels almost unrecognizable.

Burden's memoir has all the ingredients of a page-turner: Wealth, privilege, beautiful homes, family dynamics, betrayal and a divorce that becomes increasingly contentious.

More than once, I found myself staying up later than I should have, telling myself I'd read just one more chapter.

As a financial adviser, however, I found myself reacting to different parts of the story than most readers probably would.

At one point, I wanted to reach through the pages and yell, "No! Do not take your money out of your separate property trust and put it into a jointly owned home!"

That's what made the book so compelling to me. Beneath the story of a marriage ending was another story unfolding quietly in the background: The financial decisions being made along the way.

The danger of disengaging with your finances

Burden's story reminded me how easy it is for intelligent, capable people to become passive participants in their financial lives. Not because they lack the ability to understand money, but because life is busy.

Careers demand attention. Children need to be raised. Marriages operate on trust. One spouse naturally takes the lead in certain areas, and before long, financial decisions become something that simply happens in the background — often brushed aside with a comment like, "This is all too complicated for you to understand, anyway."

Most of the time, that arrangement works just fine … until circumstances change.

The reality is that many of the financial pitfalls people encounter aren't obvious. Few people wake up worrying about how property is titled, whether inherited assets have been properly protected, whether a prenuptial agreement still reflects their current situation, or whether beneficiary designations are consistent with their wishes.

Yet these are precisely the kinds of issues that can have life-changing consequences.

What makes Strangers particularly powerful is that Burden doesn't portray herself as a victim of circumstance. Near the end of the book, she reflects on a series of decisions involving her prenuptial agreement, property ownership and her level of involvement in the family's financial affairs.

Reading those reflections, I found myself thinking less about the divorce itself and more about the dozens of moments along the way when a different conversation, a second opinion or a deeper understanding of the financial implications might have altered the outcome.

That's a lesson I see play out frequently in my profession.

Many people assume the greatest financial risks they face involve the stock market. They worry about whether they should buy a particular fund, invest in international stocks or wait for a market correction.

In reality, some of the most consequential financial decisions have little to do with investing. They happen when we sign legal documents we don't fully understand, make changes to ownership structures, neglect to update estate plans or assume someone else is paying attention to details that affect our future.

The value of expert financial advice

This is one of the reasons I believe comprehensive financial planning is so valuable. A good financial adviser doesn't simply manage investments. They help clients identify risks they may not even realize exist.

Sometimes the most important question in a planning meeting isn't, "What should I do?" but rather, "What haven't I thought about?"

And yes, you can use AI chatbots to answer questions, but you need to know what to ask them.

An experienced adviser, however, can prompt the questions that haven't yet occurred to you:

• What happens if circumstances change?
• Does this legal agreement still reflect our intentions?
• Have we unintentionally exposed assets we meant to protect?
• Is the financial structure of our lives still aligned with the reality of our lives?

Those aren't questions most people ask regularly. They're certainly not questions people ask when they're in love. Yet they're often the questions that matter most.

The power of staying engaged

That's ultimately the financial lesson I took away from Strangers. Burden's story is deeply personal, and every marriage is different. But her reflections serve as a reminder that financial security isn't created by avoiding difficult conversations. It's created by having them early, revisiting them often and staying engaged in the decisions that shape your future.

By the end of the book, I wasn't thinking about the divorce anymore.

I was thinking about all the people sitting across from me every year who assume nothing will change.

Most of the time, they're right.

The problem is not planning for the possibility that they're wrong.

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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.

While anxious eyes watch oil prices and inflation indexes, the best news for savers and income investors is hiding in the bunker often called the belly of the yield curve. So far in 2026 through the start of June, two-year Treasury yields have leapt from 3.46% to 4.01%, and three-year yields from 3.53% to 4.06%.

At the same time, despite chatter about inflation pushing up interest rates at the long end, these show gentler climbs, with 30-year T-bonds crawling from 4.86% to 4.97%. This tells us traders anticipate the surge in inflation to persist through 2029, then recede toward the Federal Reserve’s 2% target.

It also means savers and short-term-bond collectors have it better than long-term-bond investors. If yields climb, risk to principal and likely lost opportunities do not justify locking in 5% or 5.25% for a decade or longer. (Prices and yields move in opposite directions.) No wonder inflows to short and ultra-short bond funds are soaring. Where to best position your money on the yield curve is rarely so clear-cut. Read on for tips on minimizing costs and to see opportunities for extra marginal yield.

The easiest path to higher yields

The simplest and least costly approach is to accumulate short notes and bonds directly, either using the Treasury Direct website or a brokerage account. This is a freebie if you have cash reposing in, say, a Fidelity brokerage money market account currently paying 3.33%.

Switching to two-year 4.0% T-notes means for every $10,000, you see an extra $67 a year — enough to notice — assuming you keep the principal until maturity. There are also my favorite full-faith-and-credit federal agency notes, such as the Federal National Mortgage Association’s 4.3% notes due in May 2028. Unless you will need the money before maturity, this is sweet.

Banks usually offer a tad more on certificates of deposit, and there is also no cost.

Shop at a bank-rate site, or see if your brokerage posts CD rates noticeably higher than the Treasury pays. Fidelity, with the 3.33% money fund, lists 3.90% for various 90-day CDs and slightly upward of 4% for a ladder of six-, 12-, 18- and 24-month bank deposits. I am not a fan of longer-dated CDs because they do not pay suitably higher rates.

You can also shop for and compare the best CD rates using this Bankrate tool:

Tactical ways to earn higher yields

To angle for still higher income with equally short maturities, you will bear some expenses, but they can be trivial. I generally endorse short-dated defined-maturity corporate bond funds; Vanguard’s new suite of these charges 0.08% in fees and includes Vanguard Target Maturity 2028 Corporate Bond (symbol VBCB), an exchange-traded fund whose portfolio is valued to yield 4.50% to maturity; the fund terminates in December 2028.

That is long enough for a defined-maturity fund. The yield to maturity on a similar Vanguard fund slated to end in 2035 is just 5.25%.

Another higher-yield idea in the belly is a high-yield bond fund with a pile of bonds due to mature in a couple of years. This is a face-off between the established PGIM Short Duration High Yield ETF (PSH) and newcomer Columbia Short Duration High Yield ETF (HYSD).

Both are actively managed (which matters in high yield), charge low enough expenses (between 0.4% and 0.5%) and distribute close to 6% — more than enough to absorb the cost. There is little to gain now entering a long-term high-yield fund, though if you hold any with embedded unrealized gains, leave it be. You have done extremely well.

Again, if I have written zero that you do not already know, at least accept my affirmation that when every half percentage point matters, you can get it safely and effortlessly and at minimal cost. Banks and fund companies are not always your friends, but in the area of inexpensive short-term cash alternatives, they are worthy partners.

A financial advisor can help you build a strategy for saving, investing and reaching your long-term goals. Use the tool below to find an adviser who can help.

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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One of the most interesting — and truly dramatic — highways in Southern California lies due north of Los Angeles. Known as The Grapevine, it is a steep, winding, five-mile section of Interstate 5 that goes through the Tehachapi Mountains, rising more than 4,000 feet via the Tejon Pass.

While not apparent at first glance, there are several small communities along the route.

In one of them, two neighbors were locked in a struggle over the refusal of one to recognize that an "implied easement" had been established nearly 30 years ago. Similar legal issues go back — way back — to Ancient Rome and the English common law brought to America in which the basic principles of using a neighbor's property without a written deed were established.

A paradise … until he moved in

In the small mountain community, longtime readers "Jill" and her husband, "Ricky," live in a mobile home on Lot A, which they bought from "Sally" more than 20 years ago. Sally had owned that land and the adjacent parcel, Lot B, for many years. Initially, she rented out a mobile home on Lot B, but she recently sold the lot to "Matthew."

A driveway is located between Lots A and B, with a portion of it on Lot B. For more than 30 years, Sally and all her tenants, including Jill and Ricky, either walked or drove across that Lot B portion to reach the nearest road.

Aside from a forested, 45-degree downward slope that is impossible to safely walk down or drive over, there is no other practical way to reach the nearest road. In other words, without access to that portion of the driveway on Lot B, Lot A would be landlocked.

"This wonderful place was a little paradise for everyone in the area until six months ago, when Matthew became our next-door neighbor," Jill said. "Overnight, our lives became a living nightmare with his behavior."

'You are using my property without permission'

Matthew became the neighbor from hell. He'd pound on their door and send them nasty texts, demanding to be paid $16,000 for their use of his driveway.

In addition to other assorted threats that I read in his texts, he threatened to lock a gate between the two lots, which would prevent the couple from leaving their property.

I had several telephone conversations with him, and the expression "as stubborn as a mule" fit Matthew, though I would say he was as stubborn as an entire barn of mules.

Given the facts and history of usage of that driveway, in my legal opinion, he didn't have a chance of collecting 1 cent from them.

Of course, the legal question boils down to this: Could he charge them anything for walking or driving over that small section of driveway that is, indeed, located on his property?

I referred my readers to Bakersfield, California, real estate attorney Fawn Dessy, who answered that question with two words: "Absolutely not!"

Creation of an implied easement

"This common situation in rural areas gives rise to what we call an implied easement," Dessy said.

She cited a classic definition that law students never forget: An implied easement is found when a property owner was previously using one part of their land to benefit another part and then divides and sells the parcels. Its use legally continues. It is usually not written in a deed but is recognized since it is based on prior use of the land.

Dessy listed the specific legal requirements to establish an implied easement:

• Common ownership. Both the parcels must have originally been owned by a single person or entity.
• Severance. The parcels must have been separated through, typically, a sale.
• Apparent and continuous use. Before the parcels were split, the use was visible, obvious and ongoing.
• Reasonable necessity. The easement must be reasonably necessary for the occupants on the parcel that is benefited by its use, such as getting to and from a highway.

Dessy's letter to Matthew

Dessy sent a polite, yet no-nonsense, letter to Matthew, citing controlling cases and urging him to take no actions that would in any way harm my readers.

Over the next few days, Matthew and I had reasonably pleasant telephone conversations in which I tried to reason with someone whose mind was made up, regardless of the facts. Then a question occurred to me: Had he been aware of that easement before buying Lot B? Did the information appear in the listing and sale agreements?

If it wasn't obvious to him or in the sales documentation — or he simply did not know of it — he would likely have a claim against the real estate agent who handled the transaction.

While it would require an appraiser to determine how much he overpaid, if any amount at all, for a lot subject to the implied easement, if he really wanted to pursue the matter, that would be his best bet.

So, I called him and asked, "Was the easement mentioned in the real estate sales agreements?"

At first, he did not directly reply, and then he said, "Beaver, I got Attorney Dessy's letter. Tell them they can continue using the driveway, as before. I'm done fighting. And, no, the easement was not disclosed in the actual sales documents. But the seller told me about it."

So he'd known about it all along. He'd been after a cash grab, punctuated by threats, bullying and name-calling.

I gave the good news to my readers that he was dropping his claim. The couple emailed me, "Mr. Beaver, Paradise has returned to our little corner of the world."

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.

If you're looking for a more affordable cell phone plan, Ultra Mobile's back-to-school promotion could help you save.

Ultra Mobile is a prepaid wireless provider owned by T-Mobile, the same company that owns Mint Mobile. It offers lower-cost plans with features including unlimited nationwide talk and global text, mobile hotspot access and Wi-Fi calling.

There are no annual contracts, and Ultra Mobile runs on T-Mobile's nationwide network. That combination of flexibility, coverage and lower prices could make it worth considering for anyone looking to cut their monthly cell phone costs.

What's included in the back-to-school promotion?

For a limited time, Ultra Mobile is discounting select six- and 12-month prepaid plans. Customers can save 15% on eligible six-month plans or 30% on eligible 12-month plans. The offer applies to the 4GB, 8GB, 12GB, 24GB, Unlimited and Unlimited+ plans.

For example, the 4GB 12-month plan normally costs the equivalent of $13 per month. With the 30% discount, the effective monthly cost drops to about $9.10, or $109.20 for the full year before taxes and fees.

Keep in mind that you must pay for the entire plan upfront to get the promotional price. For the discounted 4GB annual plan, a $15.90 recovery fee and $2.24 in taxes and surcharges bring the total upfront cost to around $127.34.

Who should consider switching?

Ultra Mobile may be an ideal solution for seniors or light data users who need a phone without the extra cost or features that come with contract cell phone plans. These prepaid wireless plans may be suitable for kids heading to school or for someone looking for an affordable second phone line.

Since the plans are competitively priced, they could be an appealing option to anyone who has a contract plan and who is trying to save on their phone bill. Ultra Mobile requires no credit check, so customers with poor credit scores who aren’t able to get approved for a traditional mobile plan might consider this carrier.

What are the trade-offs?

Ultra Mobile’s plans may help customers save money, but there are some trade-offs that come with the lower price point.

• Prepaid plans: Most contract mobile plans are postpaid, meaning that you pay you phone bill at the end of each month. Ultra Mobile’s plans are prepaid, and you pay for multiple months upfront. To get some of the lowest pricing, you might have to pay for 12 months upfront, so you’ll need to be able to cover that initial cost.
• Data caps: Some of Ultra Mobile’s most affordable plans only include limited data; once the data is used, your phone will slow down to 2G speeds until your next billing cycle. Anyone who uses significant amounts of data may want to consider one of the unlimited data plans, which start at $23.80 per month.
• Customer support: Ultra Mobile offers an online chat feature, or you can call the Customer Care team from 6:00 am through 6:00 pm PST, seven days a week. Some in-store support is available, but you’ll need to use the store locator to see if a store is available near you.
• Deprioritization: During periods of network congestion, T-Mobile may deprioritize Ultra Mobile customers' data. This means T-Mobile customers may receive faster data speeds, while Ultra Mobile customers could experience slower speeds.

How Ultra compares with other budget carriers

Ultra Mobile is one of several budget mobile carriers. Here’s how the different options stack up.

Ultra Mobile's current promotion makes its already low prices even more affordable, but the carrier will not be the right fit for everyone. Before switching, consider how much data you use, whether perks such as streaming discounts or unlimited high-speed data matter to you and whether you are comfortable with limited in-person customer support.

Ultra Mobile could be a solid choice for light data users or parents looking for an affordable phone plan for a child heading back to school. If the plans fit your needs, the back-to-school promotion offers an opportunity to lock in a lower price and save on wireless service.

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President Donald Trump re-imposed a U.S. blockade on Iran and introduced a 20% toll on all cargo transiting the Strait of Hormuz, adding to uncertainty at the key passage to and from the Persian Gulf. At the same time, another steep sell-off for South Korea-based semiconductor stocks undermined "risk on" sentiment stateside.

"All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as 'THE GUARDIAN OF THE HORMUZ STRAIT,'” the president posted on Truth Social, "but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."

The front-month West Texas Intermediate crude oil futures contract was up 8.8% to $77.72 per barrel. The 2-year Treasury yield ticked up to 4.269% from 4.208% on Friday and reached a new 52-week high.

Meanwhile, the Korea Composite Stock Price Index dropped 9.0% on Monday. The KOSPI recently traded into "bear market" territory by declining 20.5% from its record closing high on June 22 through last Wednesday's close.

"The stock market's attempt to break out of its six-week consolidation faces a couple of familiar challenges—tech volatility and geopolitics," E*TRADE from Morgan Stanley managing director Chris Larkin observes. "The ongoing swings in semiconductors has made it difficult for tech to mount a sustained push to the upside, and while the market has so far taken the breakdown of the US-Iran ceasefire in stride, escalating hostilities and rising oil prices won't help the bullish cause."

Larkin notes that investors, traders and speculators expect incoming consumer and producer inflation data to show some cooling. "But," he adds, "the market may not get as much of a boost from good news if traders think oil is headed higher again."

Big Tuesday

Indeed, this week's economic calendar, Tuesday morning in particular, is all about inflation and interest rates.

The Bureau of Labor Statistics (BLS) will release the June Consumer Price Index (CPI) report at 8:30 a.m. Eastern Standard Time. That's less than two hours before new Federal Reserve Chair Kevin Warsh makes his first appearance before Congress as mandated by the Federal Reserve Act.

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

The act requires the Fed chair to appear twice a year to talk about the central bank's Semiannual Monetary Policy Report. Warsh is scheduled to testify before the House Financial Services Committee on Tuesday and at the Senate Banking Committee on Wednesday.

Tuesday is also a big day on the earnings calendar, with Bank of America (BAC, -0.2%), Citigroup (C, -0.1%), Goldman Sachs (GS, -0.8%), JPMorgan Chase (JPM, -0.6%) and Wells Fargo (WFC, +0.6%) scheduled to report second-quarter results and offer forward-looking guidance before the opening bell.

SKHY vs AAPL

SK Hynix (SKHY, -9.3%) was down 15.4% during the first trading session on its local exchange after it completed one of the biggest IPOs in U.S. history on Friday. SK Hynix and fellow chipmaker Samsung Electronics, which was down 10.7% on Monday, make up about 51% to 53% of the KOSPI.

The iShares Semiconductor ETF (SOXX, -4.8%) posted a more modest loss, though Nvidia (NVDA, -3.5%) was the worst-performing Dow Jones stock.

Apple (AAPL, +0.6%) traded against Monday's trend for both the Magnificent 7 stocks and tech generally, touching a new all-time high even as the Roundhill Magnificent 7 ETF (MAGS, -1.0%) was well in the red.

Citi Research analyst Asiya Merchant reiterated her Buy rating and raised her 12-month target price for AAPL from $315 to $365, citing the September release of the iPhone 18 as "an important catalyst that could further strengthen investor sentiment." The iPhone 18 is expected to include Siri AI.

At the closing bell on Monday, the tech-heavy Nasdaq Composite was down 1.6% at 25,873 the broad-based S&P 500 had shed 0.8% at 7,515, and the blue-chip Dow Jones Industrial Average was off 0.3% at 52,498.

When FAST is also safe

If there is such a thing as a safe stock, Fastenal (FAST, +1.2%) qualifies according to Kiplinger's Personal Finance Magazine contributing columnist James Glassman. As Glassman notes, the wholesale nuts and bolts distributor has boosted its dividend for 26 straight years, and it has a beta of 0.88. So it's a "Dividend Aristocrat," and it's less volatile than the broader market.

FAST, which is also scheduled to report earnings before the opening bell on Tuesday, generated a year-to-date total return of 17.1% through July 10 vs 11.4% for the S&P 500. The industrial stock is also up 94.1% and 451.8% over the trailing five- and 10-year periods vs 85.7% and 316.3% for the index.

The Wall Street analyst community is split on FAST: Five Buy, seven Hold and five Sell ratings. But Rothschild & Co. Redburn sees something different here, too.

"An investor who committed $9,000 to purchase 1,000 shares at Fastenal’s IPO in 1987 would today hold shares worth approximately $15.5 million," analyst William Blunt writes in the March 2026 Redburn Review (pdf), "equating to a compounded annual return of 21.6%, or 22.2% after reinvesting dividends."

Blunt says the culture established by founder Bob Kierlin, who was CEO for 35 years, is built on frugality. "This disciplined approach to costs has enabled sustained reinvestment," he adds, "reinforcing a virtuous cycle of profitability and expansion."

On Monday, Rothschild Redburn initiated coverage of FAST with a Buy rating and a $55 12-month target price.

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

Memory chips traditionally see booms and busts. Strong demand causes prices to rise, then new supply hits the market and prices fall. Rinse and repeat.

That cycle has been upended, at least for now. Massive demand from the artificial intelligence frenzy has created severe shortages and prolonged price hikes. Top memory makers Micron, Samsung and SK Hynix have seen revenue, profits and stock prices explode.

Is the memory market different this time?

Many analysts and investors are betting that the market has fundamentally changed. In a recent investing presentation, Micron seemed to reflect the sentiment, saying that "the memory industry has been structurally transformed by the proliferation of AI."

But it’s not likely the AI boom will end memory’s cyclical nature. "The core tenet of cycles is still very much part of the story," says William Kerwin, an analyst at Morningstar. "The key question for investors is when this cycle peaks and how far it falls thereafter," Kerwin wrote in a recent Micron research note.

Kerwin says that memory makers still don’t want to overbuild because when you have oversupply, pricing crashes. Companies also don’t want idle capacity at hugely expensive chip plants. "Demand can change on a dime," he says.

Chipmakers have big expansion plans underway, but new factories take a long time to build, and "no major greenfield additions across the industry are expected to matter before 2028," according to a recent report by market research firm Omdia.

"Major memory manufacturers have internalized the lessons of previous cycles," said Soo Kyoum Kim, an analyst at IDC, in a recent article. "They are exercising deliberate capacity discipline" by prioritizing advanced AI products and not rushing to fill every order.

However, this unprecedented upswing will last years. A downturn is expected in 2029, according to Kerwin, when more supply becomes available from major new manufacturing plants.

Memory chip sales have absolutely skyrocketed

Global memory chip revenue is forecast to hit about $803 billion this year, according to World Semiconductor Trade Statistics. For perspective, that’s about the same as the entire semiconductor market in 2025, which was $796 billion.

This year, memory revenue will nearly double the value of all logic chips, a category that includes chips from Nvidia, Intel, Broadcom, Qualcomm, Apple and many others. Memory chip revenue is a driving force behind overall semiconductor revenue being set to reach an astronomical $1.5 trillion this year and nearly $2 trillion in 2027.

Micron’s recent third-quarter results highlight the trend. The company saw quarterly revenue explode 346% year-over-year to $41.5 billion. In 2026, revenue will be nearly $140 billion, with sales set to hit $340 billion in 2027, according to a Morningstar forecast. Back in in 2023, the U.S. memory chipmaker had $16 billion in revenue.

Chipmakers still want to avoid a painful crash and will continue to exercise discipline over supply, ready to respond if memory prices sink. Another recent tactic is using long-term contracts to smooth the ups and downs of demand. Micron inked 16 multi-year deals worth $22 billion to start, for example.

Even in a downturn, global memory revenue will remain at a far higher level because of AI demand. Prices will be higher than the pre-AI boom, too. "We're not making a call that AI demand is going to slow down," says Kerwin. Rather, the bearish call is that a glut of supply brings prices back down.

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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