Stocks started the week with a bang as bargain hunters swooped in following last week's broad-market thumping. Monday's impressive gains came even as Nvidia (NVDA) — one of the world's biggest companies by market cap — plunged on reports that the artificial intelligence chipmaker's CEO, Jensen Huang, is being investigated over his relationship with a woman suspected of being a Chinese spy.

At the close, the blue-chip Dow Jones Industrial Average was up 2.2% at 52,389 and the broader S&P 500 was 2.4% higher at 7,549. The tech-heavy Nasdaq Composite gained 2.7% to 25,253, exiting correction territory. This is the first time since April 5 that all three benchmarks have surged 2% or more in the same day, according to Dow Jones Market Data.

Stocks sold off sharply last week on concerns that incoming Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout.

Many of last week's biggest losers saw impressive gains today, including memory stocks Micron Technology (MU, +6.3%) and Sandisk (SNDK, +6.2%).

And Advanced Micro Devices (AMD) surged 13.3% after Oppenheimer analyst Rick Schafer upgraded the chipmaker to Outperform from Perform, the equivalents of Buy and Hold, respectively. "Management sees top line up >80% next year despite supply constraints," Schafer says, while he anticipates data center revenue to grow 185% in 2027 on "robust" demand for high-performance compute.

Caterpillar (CAT), meanwhile, whose generators help power data centers, plunged more than 10% last week but was up 7.2% today — making it the best Dow Jones stock.

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.

Nvidia stock plunges on Huang investigation

Nvidia, on the other hand, found itself at the bottom of the 30-stock index, sinking 4.3% on worries over what the investigation into Jensen Huang means for the AI bellwether.

Over the weekend, Huang acknowledged an extramarital affair, saying in an email to employees that they "deserve better" from him. "Leading NVIDIA is the privilege of my life," wrote Huang. "My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to NVIDIA and will work to earn back your confidence."

Media reports indicate Huang's relationship was with Alice Huang, an executive at a Singapore-based cloud company whom U.S. officials have classified as a Chinese spy.

Given the potential national security risks, Nvidia's board of directors said it is launching an independent investigation, one that "Jensen fully supports ... and has committed to cooperating with it."

The news has Wall Street wondering if Jensen Huang — widely considered one of the most influential figures in the AI industry — will be removed as CEO of Nvidia.

"Given Huang's central role in Nvidia's success and the wider AI investment narrative, even speculation about leadership uncertainty could unsettle investors," says Daniela Hathorn, senior market analyst at Capital.com. "However, there is currently no confirmed indication that he will step down, and the controversy does not necessarily change the company's underlying demand outlook."

She notes that the bigger risks to Nvidia and its fellow tech stocks are "the combination of AI valuation concerns and the possibility of further Federal Reserve tightening."

October CPI will shift the December rate-hike needle

According to CME Group FedWatch, futures traders are currently pricing in an 84% chance the Fed will raise interest rates by a quarter-percentage point when it meets next month. Tomorrow morning's release of the October Consumer Price Index (CPI) will likely shift those odds.

"In the wake of a blowout jobs report and other signs of a resilient economy, the Fed is going to have little patience with inflation," says BeiChen Lin, senior investment strategist at Russell Investments. "Even a minor surprise could seal the deal on a December hike."

In addition to the headline October CPI numbers, which will not include a year-over-year figure this time around due to last year's government shutdown, Lin will be focused on "the breadth of inflationary pressures," meaning how prices are rising across various sectors, goods and services. "That will play a key role in determining the path of future monetary policy decisions," he explains.

Related content

• 2 Sectors, 4 Stocks to Buy This November
• Mapping the Mega Data Centers Powering the AI Revolution
• Earnings Calendar and Analysis for This Week (November 9-13)

Recently, an actuary for a major insurance company reached out to me to run a Social Security analysis. He'd been calculating lifespans for three decades and was now focused on his own.

Mark was 63, and his wife, Susan, recently turned 61. Both retired from long careers a few months earlier with no wages or self-employment income. Their teenage daughter, Lily, a 15-year-old cheerleader, had just begun her first year of high school.

Mark had studied the Social Security Administration (SSA) website and pored over his Social Security estimates with the mindset of a cautious actuary.

He said, "Ray, everything points to both of us using our savings to bridge the next seven years and waiting until age 70 to file. What do you think?"

In our Zoom meeting, I said, "If it was just you and Susan, I'd tend to agree. But let's run the numbers, because I believe Lily might bring some cheer to your household income."

Lily could qualify for a benefit on Mark's earnings record once he claims Social Security.

I gave Mark a quick summary of the SSA's rules: "Eligible children of a worker entitled to retirement benefits can generally receive payments while unmarried and under 18, with continuation for qualifying full-time elementary or secondary students, until 19."

(Different rules can extend eligibility for a disability that began before age 22, but Lily does not have a disability.)

Mark responded, "But, Ray, by the time I turn 70, Lily will be 22. She won't be eligible."

I then walked Mark through a very familiar subject: Math. Many times, in my practice, the person without a retirement statement can change the math.

A child can put a deadline on the calculation

Lily's math was simple. Her benefit was based on half of Mark's $3,200 full retirement age benefit: $1,600 a month. Over 36 months, that would add up to $57,600 before applying the family maximum.

There was more math to consider. Susan could collect a child-in-care spousal benefit while Lily was under 16, even before Susan turned 62. That would add about $800 a month to the family's income until Lily turned 16.

Using a $5,600 family maximum for our example, Mark would receive $2,400 starting on his 63rd birthday. Susan and Lily would each receive $1,200. That put the family total at $4,800 a month.

Mark responded, "Ray, even with a maximum, your new math beats mine every day. I didn't even think my daughter factored into my retirement decision."

One filing decision can affect three people.

Susan has two different interests in this decision

Mark's wife, Susan, needs to understand spousal benefits while Mark is alive and survivor benefits if he dies first.

A regular spousal benefit can be up to 50% of Mark's Social Security full retirement age (FRA) amount, with reductions for early claiming and other eligibility rules.

Mark's previous plan to wait until 70 doesn't increase that 50% base. Nor would Susan earn delayed retirement credits on a spousal benefit by waiting beyond her own full retirement age.

Susan's own retirement benefit, if she has one, is a separate calculation. SSA coordinates the benefits; it doesn't simply add two full checks together. Assuming both spouses should wait until 70 skips these distinctions.

Survivor benefits work differently. Delayed retirement credits earned by Mark can increase Susan's eventual widow's benefit. That can make delaying the higher earner valuable protection for a younger spouse.

Susan could receive up to 100% of the applicable survivor amount at her full retirement age for survivor benefits, subject to the rules. But her own retirement payment and the survivor payment aren't added together.

When one spouse dies, a household often loses one Social Security check. Unfortunately, the roof doesn't become 50% smaller. The property tax doesn't observe a mourning period.

The question for Susan is how much income she would have after Mark's death and how much she would still need.

Earlier payments change later income

Lily's potential benefits don't settle the case for claiming immediately.

For someone with a full retirement age of 67 (the FRA for those born in 1960 or later), starting at exactly 63 reduces the worker's benefit by 25%. Mark's illustrative $3,200 would become $2,400, before later adjustments. That lower starting benefit matters long after Lily's payments end. Early claiming can also affect Susan's eventual survivor income.

Parents who are still working have another issue to check: Their earnings can cause benefits for themselves and family members to be withheld.

The comparison therefore needs a household timeline. Model the years while Lily qualifies, the years after her benefits end and the years Susan might spend as a widow. Test a long life for each spouse.

Compare Mark claiming now, at full retirement age and at 70. Coordinate Susan's available benefits with each alternative. Count the savings used during any delay, along with the larger retirement and survivor payments that waiting might produce.

Ask who belongs in the analysis

Your household might have no teenagers. A former spouse, an adult child with a disability or a spouse with a very different earnings history can still change the answer.

Before filing, identify everyone who could qualify on the relevant work records, the dates their eligibility begins or ends and the income the household would retain after a death.

Mark can then decide whether the later increase is worth the payments his family would pass up now. He will be comparing actual alternatives instead of choosing the biggest number on one statement.

The Social Security application might have Mark's name at the top, but Susan and Lily still belong in the calculation.

Related Content

• Social Security Family Maximum Benefits: Are You Eligible and How Much Can You Receive?
• When Should You Start Social Security Benefits? It Depends
• 9 Changes Coming to Social Security in 2027
• When the Biggest Social Security Check Is Not the Best Choice
• Are You Much Older Than Your Spouse? Sorry, But Your Social Security Decision Isn't About 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.

How old is your house? The average U.S. residence was built 42 years ago. That compares with 31 years as recently as 2005. The share of houses built in the past 10 years has dropped from 18% in 2014 to 13% today. New home construction starts are lower than they were in 1970, even though the population has increased by 140 million.

We're just not building enough new places to live. A big problem is that state and local zoning laws are so strict. Current residents tell their elected representatives they don't want their communities crowded with newcomers on quarter-acre lots.

Lately, three other obstacles have developed: First, to sell your current home and buy a new one, you will probably have to trade a low-rate mortgage for a loan of 7% or more.

Second, construction costs have soared because of tariffs on materials such as lumber and worker shortages exacerbated by immigration enforcement and the boom in data-center building.

Third, the squishiness of the economy in general has not been kind to home prices, which have fallen in real (after-inflation) terms for 13 straight months.

A languishing housing market

Residential sales are slow. Prices aren't low enough to beckon potential buyers or high enough to inspire potential sellers. The S&P Select Industry Homebuilders Index has returned an annual average of just 7.3% over the past five years, compared with 13.8% for the full S&P 500 Index. Over the past 12 months, the Homebuilders index trails the S&P 500 by 28.1 percentage points. (Prices and other data are as of September 30.)

All of this bad news, however, is already baked into stock prices, which means investors may have some attractive opportunities. Warren Buffett and his successor as CEO of Berkshire Hathaway, Greg Abel, seem to think so. From the beginning of 2025 through September 2026, Berkshire purchased 11% of Lennar (LEN) — as the stock price dropped from $126 to the low $80s.

Lennar — one of the largest homebuilders, with a market value of $20 billion — has lost more than half its value over the past two years and trades at a price-to-earnings (P/E) ratio of 16. It still has a strong balance sheet and an established footprint in good markets, such as Florida, Texas and Tennessee.

In July, under Abel, Berkshire acquired Taylor Morrison, a builder headquartered in Arizona, for $8.5 billion (including assumption of debt). I recommended the stock early in the COVID pandemic in 2020 at less than one-third the price that Berkshire paid. Berkshire also owns chunks of my longtime favorite, Virginia-based NVR (NVR), as well as Texas-based D.R. Horton (DHI), the largest homebuilder by revenues.

NVR shares have fallen by about one-third in two years, while Horton has done a bit better. The fact that Berkshire is buying homebuilders should give you some confidence, but remember: It has made mistakes (US Airways!), and it has a long investing time horizon.

I can't be sure when Americans will get back to buying homes, so these are indeed stocks for the long run. What I do know is that home building will revive. Demography demands it, and so do technology, economics and politics.

The homeownership rate peaked in 2004 at 69%. It's now 65% and falling. Pressure is building on politicians to adopt what Arthur Gailes and Edward Pinto of the American Enterprise Institute call "housing abundance" policies, with more state legislatures considering rules that allow smaller lots and proposals in Congress for home-buying tax credits.

As for technology: Goldman Sachs calculates that productivity in home building has declined since 1965 at an average rate of 0.6% a year while rising in the whole economy at 1.6%. We can certainly figure out how to build houses faster, cheaper and better. Perhaps the shortage of workers will speed that up.

If home building — and buying — has stalled, you might think that renovating would benefit. But people spend a lot of money when they move to a new home, not necessarily when they're stuck in their old one. In addition, higher interest rates hurt renovators, who often have to borrow.

As a result, the stock of Home Depot (HD), the world's dominant home-improvement retailer, serving both do-it-yourselfers and contractors, has performed miserably, down 29.1% over the past year and more than $140 per share off its late-2024 high. Its smaller competitor, Lowe's (LOW), has suffered similarly.

Home Depot is a behemoth. Its $284 billion market cap is double that of all 19 publicly traded homebuilder stocks combined. In August, the company announced its 158th consecutive quarterly dividend, but it was frozen (like the housing market) at the previous rate. Still, the stock yields a decent 3.2%.

HD is a good way to play a residential real estate recovery, and even if home sales seriously slide, homeowners will still be getting their maintenance needs filled from the chain's 2,364 stores.

Is real estate investing right for your portfolio?

Investing in housing-related stocks can offer opportunities, but timing a market recovery comes with risks. A financial adviser can help you evaluate your options and determine how real estate investments fit into your long-term financial goals.

Use the tool below to connect with a vetted financial professional:

Consider a real estate fund

Home Depot is one of 35 companies in the portfolio of the State Street SPDR S&P Homebuilders ETF (XHB). The exchange-traded fund weights its assets equally, so a few stocks don't dominate. The fund owns the big homebuilders but also makers of heating and cooling systems and window glass, as well as retailers of paint, kitchenware and household appliances.

There is no pure homebuilder play among funds, but with this ETF, which carries an expense ratio of 0.35%, nearly all of the components will benefit from my thesis that housing will make a comeback.

The other large industry ETF, iShares U.S. Home Construction (ITB), with expenses of 0.37%, has a similar portfolio of about three dozen stocks, but it's mainly market-cap-weighted and uses a formula that gives preference to homebuilders. So the five biggest builders account for about half the fund's assets, while Home Depot and Lowe's make up only 8% combined.

Despite their differences, the two funds have produced roughly the same mediocre five-year average annual return of a little under 7%.

A much smaller choice, Hoya Capital Housing (HOMZ), with expenses of 0.30%, owns a highly diversified, evenly weighted, balanced portfolio of 100 companies, which includes a few unusual gems. Homebuilders and building-materials companies represent roughly 30% of the ETF's assets, as do apartment real estate investment trusts (REITs), including Welltower (WELL), a fast-growing business that specializes in senior living.

The balance of the stocks is in home improvement and furnishing companies, mortgage lenders, even self-storage REITs such as Public Storage (PSA), one of my all-time favorite stocks because it keeps raising its rents on customers (like me) who can't face the chore of moving or throwing out their stuff.

But like Hoya, I digress. My point is simple: I can't tell precisely when, but housing is surely going to make a comeback. If you agree, get on board.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns none of the securities listed here. You can reach him at JKGlassman@gmail.com.

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

Related Content

• The Best REIT ETFs to Buy
• How to Invest for Higher Rates
• Think You Can Afford That House? Run These Numbers First
• Kiplinger Housing Outlook: New-Home Sales Rebound as Builder Price Cuts Entice Buyers

Dear Wealth Wise: We're in our 80s with $3 million in traditional IRAs and $1 million in Roth IRAs. We're doing Roth conversions up to the 24% bracket to limit IRMAA surcharges on our Medicare premiums. We want to leave our wealth as follows: 10% to gifts, 60% to our grown children and 30% to our grandchildren. We plan to use the Roth accounts to cover taxes on traditional IRA withdrawals during the 10-year withdrawal period. The adult children could use their traditional distributions for gifting if they don't need the money and keep their Roth invested. The grandchildren could use the Roth for taxes, as needed, or keep it invested for the 10-year period. Is this a good plan? — Splitting Heirs

Dear Splitting Heirs: In the coming years, an estimated $124 trillion of assets is expected to pass from older generations to younger ones and charities. For families with significant assets to transfer, strategic planning is crucial.

Here, a couple in their 80s with a reported $4 million in wealth is looking for an efficient way to leave an inheritance while minimizing their heirs' tax burdens. They've come up with a strategy they think works, but is it solid? Here's what our experts say.

The Roth conversion strategy may or may not be optimal

In the context of estate planning, Roth conversions can be a powerful tool. By converting traditional retirement account dollars to a Roth, savers can get taxes out of the way so their heirs are able to withdraw from their windfalls tax-free.

Jesse Giordano, co-founder and managing partner at Opal Wealth Advisors, says a Roth conversion could make sense for our couple, but it's not a given.

"I'd start by comparing the couple's all-in marginal rate … with what the heirs might pay drawing down an inherited IRA over 10 years," he says. "Converting up to the point where those rates cross is one reasonable target."

Paul Pradel, wealth manager and partner at Merit Financial Advisors, agrees that the Roth conversion strategy has merit, but suggests digging deeper.

"If there are multiple children and if they are in lower tax brackets, it might make less sense to do the Roth conversions and instead pass on more in [traditional] IRA balances due to the lower tax impact to the children," he says. "If, however, there are fewer children or, regardless of the number of children, they are in higher tax brackets, then the Roth conversion would have more merit."

Giordano, meanwhile, says that while not wanting to pay more for Medicare is understandable, our couple should try not to focus too much on IRMAAs.

"IRMAA is a cost to manage, for sure, but it probably shouldn't drive the decision on its own," he explains. "With $3 million in IRAs, their RMDs could be around $190,000, so they may already be paying a surcharge."

Giordano also suggests trying to do a Roth conversion while both spouses are alive for one specific reason.

"Starting the year after the first spouse dies, the survivor generally files single, and the brackets and IRMAA thresholds are cut in half," he explains.

Be careful with who gets what

In theory, it's good that our couple has allocations in mind for their wealth. But they may want to tweak the approach, Giordano says.

"Rather than splitting every account evenly, they might consider matching account types to heirs," he explains.

"Traditional dollars could go to charity first, then to heirs in lower brackets. Roth dollars may be better suited to higher-bracket heirs and to any trusts for grandchildren, since trusts can reach the top bracket quickly. Young grandchildren also may not be in the low bracket the couple expects, because the kiddie tax can apply their parents' rate to inherited IRA withdrawals."

Giordano also does not recommend using inherited Roth accounts to pay taxes on traditional IRA withdrawals that must come out under the 10-year rule.

"The inherited Roth has no annual RMDs, so it can stay invested until Year 10. In most cases, the Roth [should be] the last dollar to spend," he explains.

An inherited Roth IRA can grow tax-free for an entire decade, so it pays to take advantage of that.

QCDs should be part of the strategy

Assuming the couple's planned 10% for "gifts" is intended for 501(c)(3) charities, they have a prime opportunity. Rather than having that money transfer upon their death, they can give generously now while minimizing taxes, supporting their Roth conversion strategy.

"Given their IRA balances and regardless of whether they continued the Roth conversion strategy, they could utilize qualified charitable distributions (QCDs) to reduce taxable IRA distributions or to simply enjoy being charitably active during their lifetimes," Pradel says.

The QCD limit for 2026 is $111,000 per individual (or up to $222,000 for a married couple if both hold IRAs), which offers plenty of flexibility to give to charity now while satisfying RMDs.

A word from Wealth Wise

Both of our experts point out that we don't know much about this couple, such as how many kids and grandkids they have, what income streams they have beyond their IRAs, and what tax deductions they're currently eligible for. But on a basic level, it seems that with a few tweaks, their inheritance plan generally works.

Still, Giordano cautions, "Today's tax rates are permanent under current law, but Congress can change that. Anyone considering these strategies should work with their tax and estate planning advisers to see what fits their situation."

Another wild card factor in this inheritance plan is the potential need for long-term care. Our couple doesn't indicate whether they have long-term care insurance, but if they don't, a good portion of their assets may go toward that expense. That doesn't necessarily mean their overall strategy needs to change, but it's an important point to consider when they run through their numbers.

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

Read More

• Why a $5 Million+ Portfolio Changes Your Entire Estate Plan
• Shielding Your Heirs: The Expert Guide to a Tax-Free Inheritance
• How Real Families Are Handling The Great Wealth Transfer
• Are You Ready for the Trillion Dollar Talk?
• I'm 60 with $4 Million — Can I Have a Luxury Retirement?

The artificial intelligence infrastructure boom has delivered significant valuation surges in stock prices for the last few years.

Along with that growth, a major debate has taken hold between those who believe we are in an unsustainable AI bubble that is destined to pop and those who believe stocks are attractively priced.

It's common to evaluate this economy against past cycles, with the dot-com era as the one most often invoked. A recurring argument from major investment houses and everyday investors is that the earnings of the AI companies justify these current valuations.

However, I have doubts about the durability of those profits and believe the risk of an "earnings bubble" is higher than some give credit for.

P/E ratios of dot-com and AI eras

During the dot-com era, P/E ratios rapidly increased. Stock prices shot up without a corresponding growth in profits, resulting in very high P/E ratios. When it became clear that earnings growth was not coming at the level the market had assumed, price had nowhere to go but down. This was a "price bubble."

Currently, P/E ratios are nowhere near the levels of the early 2000s. Prices have gone up, but earnings have also seen an equally impressive increase. This has led many to conclude that we aren't in a bubble.

But what if what we're seeing is an "earnings bubble"? Unlike in the dot-com bubble, price would not drop rapidly to get back in line with net income, but price and earnings would find themselves falling instead.

Three major reasons I'm concerned with earnings sustainability are hyperscalers' free cash flows, alleged accounting adjustments and circular financing.

Free cash flow

Hyperscalers are the large-scale technology companies that provide cloud computing and are leading this AI buildout. They have been free cash flow (FCF) machines for years. These hyperscalers have now gone FCF negative, spending more than they are bringing in.

That cash is now going to the semiconductors whose chips are powering the data centers. Earnings have skyrocketed for these semiconductors, leading many to theorize that the rapid increase in stock prices for these semiconductor companies is justified owing to their higher earnings.

If the hyperscalers don't recognize enough AI revenue to justify their investment, that spending will eventually significantly slow. That slower spending then hits the semiconductor earnings, causing a quick and large deflation in earnings and price.

As I'll explain, the current gap between hyperscaler spending and realized AI revenue leaves little margin for error.

Alleged accounting adjustments

Beyond negative FCFs, the quality of reported tech earnings has come under question. Hyperscalers have been accused of lengthening the assumed useful life of their servers and networking hardware from three or four years to five or six.

Spreading the cost of high-end AI infrastructure over a longer horizon would artificially depress annual depreciation expenses, resulting in higher, and questionable, reported operating profits.

And constantly swapping out hardware while income statements drag out the cost over five to six years would effectively hide the true cost of the buildout and inflate near-term earnings.

Nvidia has pushed back on the allegations, stating that "customers depreciate GPUs (graphics processing units) over four to six years based on real-world longevity and utilization patterns."

Circular financing

Critics argue that circular financing leads to artificially increased revenue and earnings. It occurs when a company uses its financial leverage to invest in the very companies that purchase its products.

One example of circular financing in the AI sector is illustrated by Nvidia investing billions of dollars into cloud provider Nebius.

In return, Nvidia gets an equity stake in Nebius and enables Nebius to immediately turn around and spend billions on Nvidia GPUs, which Nvidia then logs as top-line revenue. The return of Nvidia's cash causes an increase in its revenue and earnings. This arrangement is going on throughout the AI ecosystem.

This closed loop is further amplified by Nvidia's equity stake in Nebius. As Nebius' valuation increases, Nvidia's shares of the company further increase its financial metrics, making Nvidia look even more attractive.

This circular financing replaces organic market growth with supplier-funded capital, making it difficult to determine how much of the earnings is genuine and sustainable.

The bottom line

AI appears to be transformative technology in the long term. However, the earnings growth seen the last few years does not, as some argue, decrease the risk of a bubble. Many great technological innovations resulted in bubbles, including railroads and the internet.

For AI to avoid a bubble, hyperscalers will need to start seeing revenue that justifies their cost of capital. They have a long way to go, though. In mid-2026, estimates put the AI revenue-to-capex ratio at 4% ($25 billion/$660 billion). That is AI revenue, not profit. It doesn't mean it won't happen, but the risks are highly elevated until it does.

Related Content

• Worried About an AI Bubble? Here’s What You Need to Know
• Amid Mounting Uncertainty: Five Forecasts About AI
• AI Is a Supply Chain Rather Than an Industry: Here's Why
• The AI Bubble May Burst: 5 Ways Retirees Can Protect Their Portfolios
• There's a New AI Bubble No One Is Talking About: What Companies Can Do to Keep Up

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

The Federal Reserve raised interest rates for the first time in three years in mid-September. But the Fed paused in late October. In its policy statement, the central bank acknowledged that "inflation remains elevated," but said "more information" will help it determine the right policy to get inflation back to its 2% goal and "deliver price stability."

The decision followed the release of the September Consumer Price Index (CPI) report, with higher gas and fuel prices the main catalyst behind CPI's 3.7% year-over-year rise.

And with energy costs likely to stay elevated as the situation in the Middle East remains unresolved, David Payne, staff economist and reporter for The Kiplinger Letter, believes the annual CPI rate will end the year at 4%, while core CPI, which excludes volatile food and energy prices, will be at 2.7%.

With another Fed meeting on the near-term horizon — the central bank will issue its next policy decision on Wednesday, December 9 — the release of the September CPI report is a key economic event we're tracking.

What is the CPI?

"CPI is a measure of the average price of that basket of goods and services over time," writes Kiplinger contributor Coryanne Hicks. "The specific goods and services within the CPI basket are based on information that around 24,000 families and individuals give the U.S. Bureau of Labor Statistics on what they buy."

The two primary measures of CPI are headline, which is the total inflation rate experienced by households, and core CPI, which excludes volatile food and energy prices.

Core CPI defied expectations for a slowdown in September, but was flat on a monthly basis — up 0.3% vs 0.3% in August.

When does the October CPI report come out?

The Bureau of Labor Statistics will release the October CPI report at 8:30 am Eastern Standard Time on Tuesday, November 10.

Headline CPI is expected to be up 0.3% from August to September. Core CPI is forecast to rise 0.2% month over month.

October 2025 data is missing because of the government shutdown, so the BLS can't calculate and will not release year-over-year CPI this month.

Ahead of the October CPI report, we looked at what economists, strategists and other experts on Wall Street expect the data to show. You'll find these outlooks, edited at times for brevity, below.

What Wall Street expects from the October CPI report

"This month's CPI report will be unique. Since the BLS did not collect price data in October 2025 amid the government shutdown, it will not publish year-over-year inflation rates this month, which will put an even bigger spotlight on the month-over-month changes. We estimate the headline CPI rose 0.28% in October. Gasoline inflation slowed following September's sharp increase, while food inflation likely picked up as higher commodity and transportation costs gradually make their way into the grocery store. We expect the core CPI to have risen 0.21%. Some of September’s more pronounced goods price increases, including in apparel and toys, are unlikely to have been repeated in October. This should drive a cooling in core goods inflation from 0.25% in September to 0.11% in October, the latter being roughly in line with its average monthly pace this year. A softer core reading would be welcome after September's upside surprise, but it would do little to alter the broader picture of 2026 being a lost year for bringing core inflation back to 2%. We expect the report to reinforce the slow and uneven nature of the disinflationary process, underpinning our expectation for the FOMC to hike once more in December." - Wells Fargo economists

"The October CPI report is projected to show a notably smaller price increase than has occurred in the past two CPI reports. The slowing is mostly from a smaller increase in prices for gasoline and other energy goods, which contributed 0.17 percentage points to the August CPI increase and 0.39 pp to September, but are projected to contribute only 0.04 pp to the October CPI increase. Our headline CPI projection for October is 0.26% currently. The Bloomberg consensus average remains at 0.29%. Our core CPI projection for next week remains 0.23%. We expect to see only a little decline in headline CPI inflation until the spring of next year, at which point headline inflation should slow sharply (unless oil prices surge well above the $115 to $120 per barrel level from the spring this year). The core CPI change is projected to peak early next year. Along with the lapping of the oil price surge, the likely spring timing of the inflation slowdown is due to the ending of an upward bias that will be present between October and March in the 12-month changes for housing rents as a result of BLS procedures related to last year's government shutdown." - Alan Detmeister, Economist, UBS

"We expect the October CPI report to show a deceleration in inflation. We forecast headline CPI to have risen 0.2% month over month. We expect part of this reprieve to come from energy, led by gasoline prices, which fell about 1% m/m. We also expect a moderation in core CPI inflation after two consecutive months of upside surprises. We forecast core CPI rose 0.2% m/m in October. We expect the step-down to materialize primarily from core goods categories such as household furnishings, apparel and used cars. On the services side, we expect a modest slowing in core services inflation. Our baseline call remains a 25-basis-point hike in December. While the FOMC held policy rates unchanged in October, it added language that, in our view, tees up a December hike, with two hawkish dissents underscoring this bias." - Pooja Sriram, Senior U.S. Economist, Barclays

"We expect to see both headline and core inflation rose 0.3% m/m in October. We will not get year-over-year CPI data because we are missing data from October 2025 due to the government shutdown. The September CPI report flagged early signs of an energy price spillover, but this was likely just the tip of the inflation iceberg. And we expect that this will continue to be the case in October. Core goods prices have been accelerating over the past three months with pressures building in imported goods categories including apparel and footwear, toys and recreational goods, and IT equipment. Motor vehicle parts and equipment prices (driven by tariff pressures) are beginning to add to used car prices. On the services side, we have consistently emphasized that services inflation is not slated to bring any meaningful relief for the remainder of the year. Taken together, view inflation risks skewed heavily to the upside." - Michael Reid, Head of U.S. Economics, RBC Economics

"With fuel costs nudging higher in October (after seasonal adjustment), consumer prices likely rose 0.3% after spiking twice as fast in September. This should lift the yearly rate from 3.7% in September to who-knows-what, given that survey prices were uncollected during the Labor Department's shutdown in October 2025. (Based on the average index for September/November 2025, the yearly increase would rise to 3.9%.) After consecutive monthly increases of 0.3%, core consumer prices could simmer down to a 0.2% advance. They are up a moderate 2.6% y/y in September but running hotter on a shorter-term basis (3.4% annualized for three months and 2.9% for six). This is due to energy-cost pass-through (e.g., airfares +22% y/y) and stubborn rental inflation (+3.2%), as higher mortgage rates have shut many families out of ownership. (Based on the average index for September/November 2025, the yearly core increase would rise to 2.7%.) Given the iffy outlook for oil prices, the FOMC won't take much comfort from just one calm CPI report and will likely lift rates again in December." - Sal Gautieri, Senior Economist, BMO Financial Group

Related Content

• What Actually Works to Address Inflation in Retirement
• Beating Inflation: How to Protect Your Long-Term Investment Returns
• Why Is the PCE the Federal Reserve's Favorite Inflation Indicator and Not the CPI?
• The Best Inflation-Proof Investments for Your Portfolio

The fastest way to find out if your affairs are in order is to experience bad turbulence on a flight. Your mind immediately goes to that list of unfinished business you've been meaning to get to.

So why did a man in his 60s, with a fully completed and updated estate plan, his affairs in order as they say, tell us he realized there was still something missing?

Trust and estate planning conversations with professionals are spent almost entirely on tax, legal and financial work: Who gets what, when and under what conditions.

If the estate plan is like building a house, then legacy is like decorating the house, filling it with pictures and memories and turning it into a home.

Part of the confusion is the word "legacy" itself. Merriam-Webster defines it as something willed to someone by a person who has died: A bequest, as in "she left us a legacy of a million dollars."

Cambridge says something similar: Money or property received after someone dies. But Cambridge has a second definition, closer to the truth: Something that is part of your history or that remains from an earlier time.

That second definition holds up better. A legacy reaches further than a family: The people who mattered to you, the people who knew you, the people whose lives you shaped.

I have little kids at home. One of them is scared of the dark, and he asked me how dads can be so brave. I borrowed a line from Andy Weir's Project Hail Mary: "You just need to find someone to be brave for."

That's how legacy works.

Legacy belongs to the family

A trust document can name who inherits the lake house. It can't explain why the lake house was built in the first place, who was the best at Family Olympics or why everyone still talks about the weekend the power was out and Nana made everyone play gin rummy by candlelight.

Families spend plenty of time and money getting the legal and financial plan right, and they should. But they often assume the legacy work will happen on its own, through osmosis, around enough holiday dinners. It doesn't. Stories get lost, conversations never get had, and memories fade.

This work doesn't require a law degree, a fortune or a weekend retreat at a lodge. It requires a willingness to start.

Every family already has a legacy

One reason families put this off is a quiet myth: Legacy work is only for the ultra-wealthy, the kind of family with a name on a building. It isn't, and the numbers back that up.

More than half of Americans, 53%, can't name all four of their grandparents, according to a 2022 survey from Ancestry. That gap shows up in every kind of family, rich or not. Wealth doesn't create a legacy. It just changes how many resources a family has to invest in preserving one.

Think about family photography. There was a time when capturing a memory meant hiring a portrait painter or, later, a professional photographer for a few occasions a year. It was an expense most families couldn't bear.

Today, nearly every parent carries a camera in their pocket that holds several thousand family photos. Families didn't suddenly become more deserving of memories. The friction of preserving them just disappeared.

Legacy is on the same path. The stories worth telling, the letters worth writing, the traditions worth naming were always there. What's changing is how much friction stands between a family and doing something about it.

Four questions beyond the estate plan

Family wealth expert James E. Hughes has spent six decades arguing that a family's balance sheet has five kinds of capital, not one:

• Financial
• Human
• Social
• Intellectual
• Cultural

Financial capital is the will, the trust and the estate plan. That part is important. The other four are where legacy work starts, and working with an adviser who understands this can be a real help.

Here are four questions, one for each capital. Answer them yourself, or ask them at your own kitchen table. None needs a long answer. Give yourself a limit, somewhere between 150 and 500 words, and write it down.

• Human capital. What advice do you have for getting through the tough days?
• Cultural capital. What are your top three movies, and why?
• Intellectual capital. Where did you grow up, and how did that shape you?
• Social capital. What is the best decision you ever made, and why?

That's enough to start. The point isn't to produce a polished document. It's to get something true on paper before it lives only in memory.

Progress over perfection

Families stall on legacy work for understandable reasons. They're busy. A new season of something started on Netflix. They assume it's for someone wealthier.

Or, more often, no one has ever invited them into the conversation. If you're the one reading this, maybe you should be the one to start the work.

I've read a lot of legal documents in this line of work and a lot of eulogies. I learn more about who someone was from the eulogy, every time.

Your estate plan tells people what they'll receive. Your legacy is much bigger than that, so don't wait until you hit turbulence to define it.

Related Content

• Wealth Transfer Is About More Than Just Money
• Don't Wait for a Crisis to Have These Conversations With Your Aging Parents
• Leave Your Life Story as a Legacy for Your Heirs
• Want to Create a Lasting Legacy? Four Issues to Address
• What Will They Remember About You? It's Not Just About Your Money

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 just got back from a nine-day trip to Florence, Pisa and Rome with my partner, where the only money we spent was on food, museums and a few impulse purchases. The flights and hotels were covered entirely by miles. It was a ton of fun and a great reminder that spending points is just as important (maybe even more important) than earning them.

That can be easier said than done if, like me, you tend to be more of a saver than a spender. I was proud of the more than 300,000 miles I'd accumulated, and it was hard to imagine watching that balance shrink. But the reality is, points are worth nothing if you don't use them.

So I finally forced myself to spend some of them, and I'm glad I did. A week in Italy turned out to be far more exciting than staring at a large point balance.

How I found the right deal to use my points

The first thing I did was check the monthly valuations page at The Points Guy, which is regularly updated with the latest estimated redemption rates for just about every points program available. Based on that page, the average redemption rate for Delta SkyMiles is 1.2 cents per mile.

I decided that as long as the trip I booked was at or above that redemption rate, I would just go for it.

The easiest way to get a good redemption rate on your points is to be flexible on your destination and timing. Delta regularly offers award deals for passengers booking with miles, and the list of destinations and booking windows is always changing. So I kept tabs on the page where deals are listed for a couple of months and waited until something interesting popped up for the time frame when I wanted to travel.

When the Rome deal for the end of October appeared, I jumped on it. Italy's been on my bucket list for a while, and I always prefer to travel during off-peak seasons. Though I'd later learn from my Vatican tour guide, as we stood in a room packed wall-to-wall with people, that there really is no such thing as "off-peak" in Italy.

After finding the deal, I used the 15% discount I get from my American Express card when I book with miles to make it an even better deal. That discount also applied when booking the hotels in Florence and Rome with miles.

Based on the cash price for the exact same booking at the time, my redemption rate across flights and hotels was 1.5 cents per mile, beating the 1.2 cent threshold I was aiming for.

That redemption rate ended up even better on the day of departure. Thanks to my Delta SkyMiles American Express Reserve Card, I scored a free upgrade to Delta Comfort – worth $299 per person based on the cost of upgrading our seats the day of the flight if we'd paid for them.

What makes a points travel deal feel even better

After this experience, here's what I've learned are the keys to a deal that makes you feel good about parting with your points:

• Be flexible about your destination and timeframe. You don't have to book a trip to a destination you'd never visit otherwise. But if you're flexible enough to wait for an interesting offer to pop up, you can score some great deals. If I tried to use my balance to book flights home for Christmas, my options (and redemption rate) would have been limited.
• Stack your perks to save more. In addition to the deal price, I was able to shave an extra 15% off the total because of my credit card. That same credit card also includes free checked bags, and it bumped me to the top of the upgrade list to help me earn those free seat upgrades. Lastly, the Ubers we took to and from the airport were $10 cheaper each way because of the rideshare credits I get. We left in October and returned in November, so the monthly rideshare credit was applied to each ride.
• Take advantage of travel credit card welcome bonuses. Most of the miles used for this trip to Italy were earned from the welcome bonuses I got from the Delta SkyMiles American Express Platinum and Reserve cards. Trying to earn the amount I got from bonuses entirely through spending instead would have delayed this trip by another two years at least.

Don't hoard your points like I used to

For the last couple of years, I've been accumulating Delta SkyMiles. I started with an 80,000-mile welcome bonus for signing up for the Delta SkyMiles American Express Platinum card.

The following year, I closed that card and earned another 100,000 miles by signing up for the Reserve card. In between, I'd accumulated another 120,000 or so miles from booking flights and miscellaneous miles earned from everyday spending.

This year, as I was contemplating my next move to earn yet another welcome bonus, I realized that 300,000 miles is probably more than enough and I should focus on actually using some instead of just hoarding them.

Read more: These Credit Cards Have Some of the Biggest Welcome Bonuses Right Now

I admit it was hard to click "confirm" and watch so many of those miles disappear even though I knew it meant I'd finally get to see the Colosseum and eat my weight in pasta and gelato.

But, unlike cash that can earn interest if you put it in the market or even a high-yield savings account, points and miles tend to get devalued over time. The longer you hold on to them, the less they're worth.

If you're sitting on a large pile of points you've been accumulating for years, use them. I promise that the experiences you can enjoy while spending them are far more worthwhile than the sense of pride or accomplishment you might feel by having such a large balance.

Related content

• Your Points, Your Way: Optimizing Credit Card Transfers for Travel
• I Loved My Italian Vacation: Here's How I Keep the Roman Glow Going Until the Next Trip
• Why I'm Keeping My Amex Gold Card Even With a Higher Annual Fee
• Kiplinger Readers' Choice Awards 2026: Travel Rewards Credit Cards

Investors often worry about stock market swings derailing their financial well-being. But over time, two quieter risks can do far more damage to your financial plan: Inflation and longevity.

Rising prices erode purchasing power year after year. At the same time, longer lifespans mean your money needs to last longer — making inflation an even bigger threat.

That raises an important question: How do you protect your portfolio from these two retirement derailers?

There isn't a single solution. Instead, it's about combining different tools — each with strengths and tradeoffs — to build resilience.

Here are four considerations for each.

1. Directly invest in inflation

One of the most common ways to beat inflation is to buy Treasury Inflation-Protected Securities (TIPS), which are bonds that are tied to inflation. TIPS have been around for decades and offer a direct hedge against inflation by adjusting for the Consumer Price Index (CPI) over time.

The caveat is that the principal value of TIPS is what is adjusted, not the interest payment. As an example, if you buy TIPS with a maturity value of $1,000 and an interest payment of 2% or $20, and the CPI goes to 5%, the final maturity of your TIPs will be $1,050 while still receiving 2% on this adjusted value.

One of the key features of TIPS is that they pay a real (inflation-adjusted) interest rate. This is essentially what you're locking in, and this real rate represents the difference between inflation and the equivalent Treasury bond.

In times when inflation is very high and interest rates rise, as in 2022, TIPS perform extremely poorly and had steep losses, as the sensitivity to rates overwhelmed the inflation adjustment.

Additionally, TIPS are based on the CPI, which is a basket of prices that might or might not be relevant to you personally.

As an example, the CPI might be moderate, but your biggest cost might be healthcare, which can have a much higher inflation rate. While TIPS have their role in portfolios, it's important to understand their mechanics and advantages.

One final point on TIPS: The principal adjustment creates "phantom income" in that it's taxable in the year it happens, even though you don't receive the marked-up principal until the end.

2. Commodities/gold

Gold and other precious metals tend to hold their value over time while directly investing in commodities provides investors access to some of the key components of inflation, such as energy or food.

This allows investors to participate in the price movements of items they consume every day and possibly protect themselves from price spikes. Commodities such as oil are typically accessed through futures markets (not many people want to take possession of a barrel of oil).

Futures are contracts with set expiration date that offer a number of complexities such as margin requirements and managing roll yield (the cost of selling one contract and acquiring another). They're often best done through managed investments such as ETFs or mutual funds.

The biggest risk, however, comes from the make-up of the investments themselves. You could buy individual commodities such as oil or corn investments, which makes you subject to the whims of that market.

Gold and precious metals offer a store of value in that they're scarce and tend to appreciate with inflation over time. Many investments that track gold also have access to physical bars (held in trust) and minimize risks with roll yield, although virtually all of them still use at least some futures.

The primary issue with gold is that it also serves other purposes. A good example is happening now: Gold prices are down despite higher inflation because many governments accumulated gold reserves and are spending them down to meet funding needs, i.e. selling gold to buy oil.

In this way, both gold and commodities share an issue with TIPS; they might not be a hedge against an investor's actual experienced inflation. As with TIPS, these investments can play an important role in portfolios, but it's important to consider how they're undertaken and their cons.

Commodities can help hedge against inflation shocks but might not truly reflect sustained rising inflation.

3. REITS/infrastructure/stocks

Real estate investment trusts (REITS) are investments in companies primarily in the business of real estate either through owning buildings or dealing with real estate activity such as mortgages.

The idea behind REITs as an inflation hedge is that rents are a key component of inflation, and in an inflationary economy rents, will typically rise. That means REIT earnings and therefore, dividends, will also likely rise. However, as rates rise, as when inflation is high, the appeal of REITs diminishes.

Infrastructure investing is a broad term that encompasses many types of investments, ranging from pipelines to data centers. Master limited partnerships (MLPs), pay high dividends and are often pipeline companies that serve as toll roads for energy. Data centers offer both cash flow and the possibility of long-term gains.

These businesses can be capital intensive and subject to economic activity, so higher interest rates are a distinct threat. It's also a newer asset class that hasn't been truly tested by a downturn.

Stocks historically have been a good inflation hedge, but that doesn't mean they always perform well when inflation is high. If you have inflationary shocks, it can be bad for the stock market. While long-term stocks have inflation-hedging properties, there are any number of risks that can influence their prices.

Ultimately, these assets offer some protection against rising inflation but will be sensitive to the broader economic cycle, making them less of a true hedge.

4. Cash

This is perhaps the most controversial inflation hedge when discussing options and is often maligned as inflation erodes its value.

Cash held in such instruments as money market funds or T-bills tend to produce a real return overtime. Furthermore, because they're short-term in nature, they have low-interest rate risk.

It's important to draw a distinction against cash held in a piggy bank or a checking account that pays no interest. I'm specifically speaking about high-yield options.

The challenge for investors is that virtually all inflation hedges share a common risk: Higher interest rates. High rates weigh on equity valuations, make bond prices go down, dull the luster of income investments such as REITs and can influence how much you may pay for commodity futures.

There is no one perfect inflation hedge, and a prudent approach is to use a combination of these tools to enhance inflation protection while minimizing exposure to rising interest rates.

Related Content

• How to Inflation-Proof Your Retirement Without Cutting Costs (You Can Even Take Your Dream Vacation)
• Can Your Nest Egg Survive Rising Costs? Ask Yourself These 3 Questions to Find Out
• Inflation Is the New Fixed Expense in Retirement: 5 Things That Actually Work to Address It (and What Doesn't)
• An Investment Strategist Takes a Practical Look at Alternative Investments
• Preparing for the Worst: Retirement During a Recession

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.

Becoming a grandparent for the first time is a special experience. And if you're well-off, you may be eager to start supporting your grandchild from the moment they enter the world.

Even if you're a seasoned grandparent, some rules may have changed since your last grandchild was born. Moreover, you may wish to invest in a Trump Account — just launched in mid-2026.

Here are five account options to consider, along with their respective benefits, drawbacks, and potential tax implications.

1. 529 plans for education expenses

For grandparents who value education, a 529 plan can be a smart account to fund.

"Contributions are not deductible on the federal return, but some states do provide tax benefits for the contributor," says Caleb Moyer, CFP, CFA, EA, and owner of Moyer Tax Services. Moyer also explains that 529 investments grow tax-deferred, and distributions used for qualified education expenses are tax-free.

Moyer says 529 plans offer major benefits for educational savings.

"A grandparent can make a gift to the 529 for the child’s benefit but yet retain some control over the account, including the ability to change beneficiaries. The account owner, not the beneficiary, also typically controls when distributions are made."

Moyer also points out that through a so-called "grandparent loophole," the Free Application for Federal Student Aid (FAFSA), will not count withdrawals from a grandparent-owned 529 account as part of a student's income when applying for financial aid. (Note that more than 200 private institutions, including most Ivy League schools, use the CSS Profile, which may consider grandparent-held 529 plans.)

Plus, he says, "Current rules also provide some flexibility if the beneficiary doesn’t end up needing all of the money for education, including one option to roll over a long-standing 529 account to the beneficiary’s Roth IRA."

The cap on such rollovers is $35,000 per beneficiary. A bipartisan Senate bill would eliminate the cap altogether, giving your grandchild much more flexibility if they decide not to go to college or don't spend down their 529 plan. That proposal may not pass, however.

While 529 plans have their benefits, Sean Mullaney, financial planner and president of Mullaney Financial & Tax, Inc., warns that these accounts can be quite restrictive.

It's not that a 529 plan can't ever be a good idea, Mullaney explains. But he feels they should have a specific use case.

"I tend to like funding a 529 only when we have a demonstrably academically inclined child," Mullaney says. Otherwise, he warns, you could end up scrambling to put the funds to good use to avoid a penalty.

Since there's no way to know if your infant grandchild will be college-bound, it makes sense to make more modest deposits when the child is young. Then, when the child is older, you can "superfund" a 529 plan by front-loading up to five years' worth of annual gift-tax exclusions into a single year.

Keep in mind that you may also pay school or college tuition directly.

2. UTMA accounts

UTMA (Uniform Transfers to Minors Act) accounts are custodial accounts that allow an adult to manage investments for a minor. Compared to a 529 plan, UTMA accounts are much more flexible, says Moyer. However, he says, the tradeoff is control.

"The gift from the grandparent to the newborn is irrevocable right away," he says. "When the child reaches the applicable age under state law … the account control transfers to them. At that point, the beneficiary can use it for whatever they want, even if it is something the grandparent wouldn’t have wanted it to be used for."

UTMA accounts also carry additional tax consequences, Moyer cautions.

"They do not get tax-deferred growth, so dividends, interest, and capital gains must be reported," Moyer says. "If a child has enough unearned income, they may be subject to 'kiddie tax,' where they pay the tax rate of their parents on unearned income over a certain amount."

Plus, Moyer cautions, "UTMA accounts are also reportable assets owned by the child on FAFSA, meaning it could hurt their chances of receiving financial aid."

3. Trusts

As a grandparent, you can use different types of trusts to set your grandchild up financially.

"A trust starts to make sense when the grandparent’s goal is larger than simply helping with college," Moyer says. "A trust could allow the grandparent to specify when and why money becomes available to the beneficiary, such as for buying a first home, education, healthcare, or other purposes."

A trust can also be structured to give a beneficiary full access to the money at a certain future age. That said, Moyer says the downside of a trust is complexity.

"Unlike a 529 or UTMA account, a trust would require an estate planning attorney, a trustee to administer the trust … and the trust may have its own tax return and other reporting requirements."

Moyer also says a trust will likely impact financial aid.

"It would likely be considered an asset of the beneficiary, even if they cannot access it for education purposes."

Another downside of trusts is their compressed tax brackets. Retained trust income hits the top federal marginal income tax rate (37%) at very low income thresholds (just over $15,000), making tax drag a significant consideration.

4. Trump Accounts

Trump Accounts are a recently launched savings option that grandparents can help fund. Money in these accounts is invested in low-cost index funds, gains are tax-deferred, and distributions are restricted until the beneficiary turns 18. At that point, beneficiaries get control of their accounts, which effectively convert to a traditional IRA.

Mullaney says one problem with Trump Accounts is that they're brand new, so it's hard to know how beneficial they might ultimately be overall.

"529s have been around for decades," he says. "These plans have decades of managing assets, being legitimate, having account controls, and there's natural competition because states have their own plans."

Mullaney also points out that Trump Accounts offer no tax deduction for contributions. And it's still unclear how these accounts might affect financial aid.

However, he says it generally pays to open one for children born between 2025 and 2028 who are eligible for a $1,000 seed payment. Mullaney also likes the idea of converting a Trump Account to a Roth IRA once a recipient turns 18, though this would be a taxable event. Getting the exit strategy right is critical.

While parents generally establish and manage a Trump Account, grandparents can contribute funds to an existing account. The annual cap for all contributions is $5,000 per child, not counting the $1,000 seed contribution.

5. Taxable brokerage accounts

Taxable brokerage accounts, as the name implies, do not offer tax benefits like the tax-deferred growth you'll find in 529 plans and Trump Accounts. But Moyer says these accounts are worth considering.

"Having that account grow, and then gifting assets to the child when they need it, retains control for the owner [and] helps avoid FAFSA impacts," he says. Plus, he points out, funds in a taxable brokerage account can cover tuition payments for a grandchild's education, future healthcare needs, and other potentially costly expenses.

Mullaney says that for the typical affluent person, "The best tax rule available to them, the one that will benefit the grandchild the most, is the step-up in basis at their own death."

When a grandchild inherits a taxable brokerage account, the assets' cost basis resets to their fair market value on the date of the grandparent's death. The grandchild will owe capital gains tax only on growth after that date, making it an extremely tax-efficient option.

Of course, the downside is that with this strategy, you won't be around to see your grandchild reap the benefits. However, you could also take a hybrid approach, withdrawing strategically to support a grandchild's needs while leaving a balance to grow and transfer upon your passing.

It starts with setting a goal

Sharing your wealth with a grandchild is a tremendous gift. If you're not sure which account to use, Moyer suggests first identifying your goals.

If your primary goal is to fund an education, your approach may differ from one focused on helping support a first home purchase. Once you've done this exercise, Moyer says, you should be in a better position to determine which account, or combination of accounts, is best based on how much flexibility and control you want to maintain.

Read More

• 4 Urgent Questions About 529 Plans and College Savings
• Thinking About Moving Near the Grandkids? Ask Yourself These 3 Questions First
• How Much Does It Cost to Be a Grandparent?
• We're 75 With $3.2 Million. Our Grandchild Needs Help Paying for College, but It's Not Our Fault She Picked a School That's $90k a Year!

Think about the last time someone urged you to get your estate plan in order. The conversation probably started with a worst-case scenario: What happens to your family if you die tomorrow? Who takes over if you become disabled?

For as long as I have practiced law, my industry has led with fear, and death, dying and disability have been its default talking points. Those scenarios create urgency, which is why the industry leans on them.

After nearly three decades of advising families, many with $10 million or more in complex, multigenerational assets, I've also seen what that approach costs the families it claims to serve.

How fear became the default

Fear is only half the problem, and the other half is sameness. For too long, estate planning has placed clients in a box and encouraged them to design something similar to what their siblings or parents did.

The result is a plan built around what could go wrong, using a template designed for somebody else. It activates on the day you're gone and says little about your values, your guiding principles or the wisdom you would want the next generation to carry forward.

What fear-based planning costs your family

When planning is framed entirely around your own death, it becomes easy to put off, and the cost of waiting can be steep. If you become unable to manage your own affairs and the right legal authority isn't in place, you can be declared incapacitated in a public proceeding.

If no qualified family member is available, the court appoints a member of the bar who visits once a month and knows nothing about you, your family or your customs.

I served for eight years as the court-appointed guardian for my uncle, who had never put the simple documents in place before he began showing signs of dementia. Guardianship of an adult is nothing like raising a child, because you're managing the financial, medical, relational and social decisions of someone who already had a whole life.

Fear-based planning also tends to produce a plan that gets signed, filed and forgotten. A plan lives and breathes. If you don't revisit it as your life and your beneficiaries' lives change, it's just a piece of paper.

A better starting point

I stopped opening client conversations with ,"When you are no longer here." Instead, I ask clients to imagine they're having a procedure and will fully recover in three or four months. Who is managing their finances and healthcare during that window?

That question gets people comfortable starting with the basics, such as a power of attorney, before moving into more comprehensive planning. It also reflects a deliberate shift I made to talk about planning as a way to take control and be empowered. Preparation keeps decisions about your care inside your family.

What families need instead: Planning with intention

The approach I use, which I call Legacy on Purpose®, starts with intentionality about your living legacy and your lasting legacy. It means clarifying your values, guiding principles and wisdom, then transferring them through a plan built specifically for you.

This matters because you're also transferring fiduciary roles to human beings. If the next generation has not embraced its role as stewards, the plan derails no matter how well it's drafted.

One family I worked with shows what that looks like. Elders in a coastal Southeast community that had grown into a major tourism destination had built significant land holdings and businesses over decades. Their children and grandchildren were scattered across the country with careers of their own. They were not going to move back simply out of commitment to what the elders had built.

Instead of forcing the issue, we met with several dozen family members and spouses and built a one-week-a-year apprentice program. Anyone considering a role could test it out, meet vendors and customers and let the elders observe them without upending their existing lives.

Several families have since relocated and taken on roles.

Families that hold together make room for how each generation needs to arrive at the decision.

Steps you can take now

Start with the near-term scenario. Decide who would manage your finances and healthcare if you were sidelined for a few months. Put a power of attorney and healthcare documents in place.

Name your values before your beneficiaries. Ask each family member, separately and without conferring, to name their top three values and guiding principles. I've watched a 7-year-old and a 90-year-old in the same room do this, and their answers aligned. That is where honest conversation begins.

Design a plan that fits your family. What worked for your parents or siblings was built around their lives.

Explain your decisions while you can. If one beneficiary receives cash and another receives a business interest, tell them why. Once you're gone, assumptions fill the silence, and that's where turmoil comes from.

5. Give the next generation a way in. Create opportunities for heirs to step into stewardship roles before a crisis forces them to learn on the job.

Estate planning will always involve hard subjects. My purpose is to help build stronger, better family teams, and that work begins when a family decides to plan with clarity and a sense of control. Legacy on Purpose® begins the moment you decide to claim it.

Related Content

• Estate Planning Checklist: 13 Smart Moves
• 5 Key Components of an Estate Plan — and 7 Others to Consider
• An Expert's Guide to the Estate Planning Documents Everyone Needs
• 7 Mistakes to Avoid When Choosing a Beneficiary for Your Estate Plan
• I'm an Attorney: This Is Why Legal Documents Alone Won't Preserve Your Family's Wealth

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 Americans spend decades asking one financial question: How much can I accumulate for retirement? We contribute to 401(k)s, fund IRAs, watch the markets, celebrate the good years and complain about the bad ones. Then retirement arrives, and the question changes: How do I take the money out?

I once met a man who proudly told me he had beaten the market for 30 years. I congratulated him. Then he showed me his withdrawal plan, and I stopped congratulating him. He had built a race car and installed bicycle brakes.

He isn't unusual. Nearly everything on a financial statement measures growth; almost nothing tells you how efficiently that money can become income. Accumulation gets the headlines. Distribution determines your lifestyle.

The number on your statement isn't necessarily the number you can spend

Imagine a retiree with $100,000 in each of three accounts: A traditional IRA, a taxable brokerage account and a Roth IRA. On paper, she has $300,000. In practice, those balances are worth very different amounts.

Every dollar that leaves the traditional IRA is taxed as ordinary income. In the 22% federal tax bracket, that $100,000 is closer to $78,000 of spending money, before state tax. Part of the account effectively belongs to the IRS; she just doesn't know yet how large its share will be.

In the brokerage account, only the growth is taxed, and long-term gains get preferential rates — as low as 0% for retirees whose taxable income stays below certain thresholds. The Roth, if the rules are followed, is hers in full.

Think of them as three orchards. One produces fruit that can be harvested tax-free. One creates a tax bill only when gains are realized. The third lets you postpone the tax until the government eventually collects its share. Owning all three gives you flexibility. Knowing when to harvest each is what turns that flexibility into money.

Withdrawal order matters

I once worked with a retired plant manager whose records were immaculate. His plan was to draw from whichever account had the largest balance and keep everything roughly even. It was simple. It was also potentially expensive. He wasn't making an investment mistake; he was making a withdrawal order mistake.

The popular rule of thumb — spend taxable money first, then tax-deferred, then Roth — isn't a cure-all either. Followed rigidly, it can leave a retiree with almost no taxable income in the early years, wasting low brackets that won't come around again, then bunch income together later.

Often a blend works better — drawing just enough from tax-deferred accounts each year to fill a lower bracket, and covering the rest from taxable or Roth money. The question isn't only, "How much should I withdraw?" It's also, "Where should that withdrawal come from this year?"

Don't confuse paying less tax today with paying less tax

One retiree I worked with was determined to avoid taxable withdrawals early in retirement. For several years, his returns looked terrific. Then required minimum distributions (RMDs) began (at 73 for people born from 1951 through 1959, and 75 for those born in 1960 or later) and stacked on top of Social Security and his pension. His taxes and Medicare premiums ended up higher than under the staged-withdrawal strategy we had modeled. He hadn't eliminated the tax bill; he had postponed and possibly enlarged it. He avoided the sprinkle and ran into a thunderstorm.

The storm can grow. When one spouse dies, the survivor generally files as a single taxpayer, with brackets roughly half as wide, while the RMDs stay about the same. And traditional IRAs left to adult children must generally be emptied within 10 years, often during the heirs' peak earning years.

That's why the years between retirement and RMDs deserve careful attention. With paychecks gone and Social Security perhaps not yet started, many retirees sit in the lowest brackets they'll see for decades. That makes those years a window for deliberate withdrawals or partial Roth conversions. There is no universal sequence, and generating taxes for their own sake is never the goal. The point is to judge your strategy across many tax returns rather than one.

Medicare can make tax decisions more expensive

Medicare Part B and Part D premiums rise at higher incomes through surcharges known as IRMAA, based on your tax return from two years earlier. The surcharges work like cliffs: Exceed a threshold by a single dollar and you owe the full surcharge for that tier. The retiree who takes an extra IRA distribution for a new car, a kitchen remodel or a child's down payment may see the bill arrive two years later. Roth conversions count, too.

The lookback cuts both ways. If your premiums are being set by income from your final working years, you can ask Social Security to use your current income by filing Form SSA-44 and citing work stoppage.

A withdrawal affects taxable income. Taxable income can affect Medicare premiums. Social Security can affect taxable income. RMDs can affect both. One gear moves another.

Social Security is part of the withdrawal strategy, too

People often ask me the best age to claim Social Security. I don't believe that can be answered intelligently without seeing the rest of the plan.

Up to 85% of benefits can be taxable. In certain income ranges, each additional IRA dollar pulls more of your benefit into taxable income, pushing your effective marginal rate well above your bracket. Delaying Social Security while living on IRA withdrawals can help on several fronts at once:

• It shrinks the balance that will drive future RMDs.
• It replaces fully taxable IRA income with benefits that are at most 85% taxable.
• It locks in a larger check: 8% more for each year you wait past full retirement age, up to 70. A surviving spouse can keep that check if it's the larger of the two.

Delay isn't right for everyone; health and cash needs matter. But it shows why claiming and withdrawals are one decision, not two.

The bottom line

Retirement income works best when you stop asking, "How can I pay the least tax this year?" and start asking, "How can I manage taxes over my entire retirement — and my spouse's and heirs' lives, too?"

You don't necessarily need a more complicated plan. You need a coordinated one, built before withdrawals are forced on you and revisited every year. After 40 years building the race car, don't wait until retirement to think about the brakes.

Related Content

• Which of These Four Withdrawal Strategies Is Right for You?
• A Retirement Plan Isn't Just a Number: Strategic Withdrawals Can Make a Huge Difference
• The 3 Biggest Tax Mistakes Retirees Can Make in Their 60s: One Involves Roth Conversions
• Don't Let a Market Crash Crush Your Retirement
• How to Structure Retirement Income to Tamp Down Taxes

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.

Life tends to happen all at once.

I was recently sitting in a doctor's office when my wife texted to say she was driving our 3-year-old to the emergency room. Our daughter had tumbled into a coffee table, leaving a gash on her ear. Everyone is fine, and she now tells everyone that she got her ears pierced.

With open enrollment season upon us, the timing was a fitting reminder of why I encourage clients to send me their benefits packets every fall.

For many families, open enrollment is simply an exercise in checking boxes. Review the premiums, confirm the dependents and click "same as last year."

However, your financial situation might not be the same as last year. Changes will impact how you protect yourself and your family. In some cases, your financial success might open the door to new opportunities.

When savings change the math A big deductible looks different when you have a cushion. When a client has spent the year automatically sending money into a taxable investment account, I pat them on the back.

Then we talk about what the account makes possible. With savings ready to cover an emergency room visit, a high-deductible health plan moves onto the table.

Consider a hypothetical family choosing between two plans:

• A traditional plan with a $1,500 deductible
• A high-deductible plan with a $5,000 deductible and premiums that are $250 a month lower

The premium difference alone saves $3,000 a year. Add $9,000 in health savings account (HSA) contributions through payroll, and a family in the 22% federal bracket skips roughly $2,670 more in income and payroll taxes.

In a quiet year, the family comes out about $5,670 ahead. In a year with an ER visit and a few follow-up appointments, the family pays $3,500 more toward the deductible, and the premium savings cover most of the gap.

Co-insurance and out-of-pocket maximums vary by plan, and a family managing an ongoing condition may still be better served by the traditional option.

My favorite account

Anyone who's spent five minutes with me knows I have a soft spot for HSAs. I'd argue they are the most attractive accounts available in personal finance because of their unique triple tax advantage.

Payroll contributions skip federal income tax plus Social Security and Medicare taxes. The balance grows untaxed, and withdrawals for qualified medical expenses come out untaxed, too.

For 2027, families can contribute up to $9,000, including any employer money, and savers 55 or older can add $1,000.

Most people spend an HSA as fast as they fund one, paying for checkups and stitches as the bills arrive. Once the balance covers a year's deductible, many plans let you invest the rest, and the growth stays untaxed as long as the money eventually pays for medical care.

After 65, withdrawals for other purposes count as ordinary income, much like a traditional IRA, without the 20% additional tax younger account holders pay. HSA investments can lose value, so the money set aside for this year's deductible belongs in cash.

The lines on your pay stub

Group legal coverage and supplemental policies tend to renew year after year without a second look. Each might still earn a spot, and open enrollment is the window to decide on purpose.

The flexible spending account deserves the hardest look. A general-purpose health flexible spending account (FSA) can't be paired with an HSA, so a move to the high-deductible plan also ends the December scramble to spend whatever balance remains.

Open enrollment takes most people five minutes: 30 minutes with the packet and a clear look at your savings shapes the next 12 months of paychecks — and makes the next surprise trip for stitches a lot easier to absorb.

Related Content

• Your Guide to Open Enrollment and Health Insurance for 2027
• Find the Right Health Plan During Open Enrollment
• Buying Your Own Health Insurance? Bronze and Catastrophic Plans Now Open the Door to HSAs
• Gen Z Thinks They Need $9.5 Million to Be Successful. Here's What Healthy Money Habits Actually Look Like
• You Really Need to Do This Before You Act on What the Chatbot Told 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.

Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million. They're sharing how they did it and what they're doing with it.

This time, we hear from a married 62-year-old retiree in Jefferson City, Missouri. He retired from a state government job as a program manager, where his salary range was $60,000 to $70,000.

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

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

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

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

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

The Basics

How did you make your first $1 million?

My whole career I've had modest salaries in state government. Throughout, I've done two things: Maximized annual IRA contributions and my state employee deferred-compensation plan, which works like a traditional IRA.

I've invested all of it in low-cost equity mutual funds.

In more than 30 years of investing, my annual return is about 9.5%. I hit the million mark about 10 years ago, and now I'm over $2 million.

What are you doing with the money?

Nothing has changed. I'm still in the same investments and plan to continue.

In the past few years, I have upped my charitable contributions and taken a couple of nice vacations.

The Fun Stuff

Did you do anything to celebrate?

No.

What is the best part of making $1 million?

Security and freedom. I can do anything I want with no worries.

Did your life change?

No lifestyle changes. I've always been happy living below my means. But the peace of mind that comes with knowing I'm set for life is wonderful!

Does anyone know you're a millionaire?

I told my wife and my dad. I don't discuss money with anyone else.

Did you retire early?

I recently retired at 62. Maybe that's a little early — I don't know. I could have retired years ago, but I enjoyed my job!

Looking Back

Anything you would do differently?

One big thing — my early contributions were to traditional IRAs, not Roth. I liked the tax refunds! But now I'm looking at big tax bills in future years, when RMDs start to hit.

I should have done Roths all along (though I don't think Roths existed when I first started).

I plan to do Roth conversions every year until RMD time to knock those taxes down somewhat.

What advice would you give to your younger self?

Just keep doing what you're doing with the regular investments. The sacrifice is worth it. You'll be able to retire early and do whatever you want with no worries.

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

No.

Did you work with a financial adviser?

No.

Did anyone help you early on?

My dad taught me about mutual funds and the power of long-term investing. Truly, he made this all possible for me!

Looking Ahead

Plans for your next $1 million?

I can't invest in IRAs anymore, but I'm keeping my money in equity index funds, so they'll continue to grow.

I'll be adding a million every few years.

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

You don't have to make big bucks to be a millionaire. Invest regularly in tax-sheltered accounts, and you'll be amazed at how it grows!

Do you have an estate plan?

I have a will.

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

I wish I'd known how well it would turn out. That would have given me greater confidence.

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.

Related Content

• Are You Rich? U.S. Net Worth Percentiles Can Provide Answers
• Compare Your Net Worth by Age
• Being Rich vs Being Wealthy: What’s the Difference?
• These 5 Rules Separate the Rich From Everyone Else
• Can Money Buy You Happiness? Yes, It Can. However…

There is a rare kind of magic in seeing New York City during the holidays through the eyes of your grandchildren — especially when every detail feels personal. From private after-hours access at iconic flagship stores to front-row seats at world-class holiday traditions, a splurge on a multi-generational getaway creates memories that will last for decades.

If you are ready to trade holiday stress for seamless white-glove hospitality and festive charm, this four-day luxury itinerary offers an unforgettable seasonal getaway for the whole family.

Day 1: Arrival & the Rockefeller Center Tree Experience

Whether you are in town for the official lighting or visiting during December, start your trip with one of two ultra-luxury tree traditions:

On Tree Lighting Night (Dec 2): Official tree lighting gala

Evening: Bypass the city's street closures with credentials into an official indoor viewing gala at 45 Rockefeller Center. Enjoy a climate-controlled suite overlooking the plaza, gourmet catering, curated entertainment for kids, an open bar for adults and private cordoned-off access steps from the tree as the 50,000 lights flicker on. Individual tickets cost $1,557.62, admission for four is $5,195.49 and a private skybox that can accommodate up to eight is $12,942.62.

Another luxury option is Radio Park, the rooftop terrace above Radio City Music Hall, with private cordoned-off access via steps from the tree as the 50,000 lights flicker on. The cost to attend? A seat at a reserved shared table is $1,999 per person, while a private table for up to 8 is $15,192.00.

Post-Lighting: Holiday VIP Rock Pass and Après-Skate chalets

Evening: Arrive at 30 Rock through the private VIP Lounge for the Holiday VIP Rock Pass for $300 per person. After you skip the line, a dedicated host takes your family on a private tour featuring closed-door access directly under the tree for the official family photo, followed by a private champagne toast (for the grandparents) in a hidden rooftop garden overlooking the Saks Fifth Avenue Light Show. You also get access to a private "Beam Experience" at the Top of the Rock.

Afterward, step into a heated, private Après-Skate Alpine chalet or lodge directly beside The Rink for private family dining, hot cocoa and front-row views of the illuminated tree overhead.

Day 2: Wollman Rink VIP chalet and the Madeline Tea Party at The Carlyle

Morning: Enjoy the historic ice rink in Central Park surrounding the Manhattan skyline without dealing with standard lines or crowded changing areas. Reserve a Private VIP Igloo overlooking the ice at Wollman Rink for about $550. The heated private space includes personal skate fitters, concierge service, gourmet hot chocolate, hot cider and catered treats.

Optional: You can also book private skating lessons before public opening hours for some exclusive family skating.

Afternoon: Walk up Fifth Avenue to The Carlyle for Madeline's Tea Party at Bemelmans Bar. Enjoy festive high tea surrounded by original hand-painted murals from Madeline creator Ludwig Bemelmans, with pianist and singer-songwriter Tina deVaron performing lively, family-friendly holiday sing-alongs.

Evening: Stroll three blocks north of The Carlyle for dinner at Serafina Fabulous Pizza on Madison Avenue. The restaurant balances quintessential Upper East Side polish with a relaxed, family-friendly atmosphere and offers a mix of comfort favorites for the grandchildren and refined classics for the grandparents.

Day 3: Santa’s Breakfast Spectacular at Radio City and FAO Schwarz Toy Soldier dinner

Morning & Afternoon: Attend the Christmas Spectacular Starring the Radio City Rockettes at Radio City Music Hall with Santa's Breakfast Spectacular. Your group will enter through a private, historic entrance into the exclusive Roxy Suite (the former private apartment of theater founder Samuel "Roxy" Rothafel).

Enjoy a festive pre-show breakfast reception with an appearance by Santa Claus, a private meet-and-greet with two Rockettes for photos and autographs and premium orchestra seating in the first few rows, for $800 per person.

Evening: Cap off the day with the exclusive FAO Schwarz Toy Soldier dining & private shopping experience. This 2.5-hour experience for up to 8 guests is $6,750. Your family will enjoy a private after-hours feast right inside the legendary flagship store at 30 Rockefeller Plaza.

Hosted by an iconic FAO Schwarz Toy Soldier, this event includes a private in-store dinner, a magic show, and crowd-free access to the store's interactive toy stations. Guests can also arrange a visit from Santa and opt for home delivery on all purchases.

Day 4: Private Jim Henson VIP Tour and Cocoa & Carols Holiday Cruise

Morning: For fans of The Muppets, Sesame Street, and Fraggle Rock, the Jim Henson Exhibition at the Museum of the Moving Image in Astoria offers a dedicated look at Jim Henson’s creative legacy.

Take private luxury car service to Astoria’s Museum of the Moving Image for an exclusive, before- or after-hours VIP tour. Led by a museum educator, the private experience accommodates up to 20 guests for $1,000.

The grandkids can explore nearly 50 original puppets — including Kermit the Frog, Miss Piggy, Big Bird, and Elmo — alongside character sketches, historic camera rigs, and interactive puppetry stations.

Late Afternoon: Relax on the Cocoa & Carols Holiday Cruise. You'll board an enclosed, heated 1920s-style yacht for a private-table holiday cruise down the Hudson, taking in harbor views of the Statue of Liberty with live carols and warm holiday drinks. This 1.5-hour cruise costs from $98 to $132 per person.

Evening: Farewell dinner at The Grill in the Seagram Building. It offers mid-century theater and tableside preparation, featuring prime rib carved to order and flaming Baked Alaska. It feels refined and celebratory for grandparents while captivating kids with the theatrical service.

Making memories

When the festive lights dim and the suitcases are packed, the true gift of a luxury NYC holiday isn't just the VIP seats or private tours — it is the look of total delight on your grandchildren's faces that stays with you forever. By curating a celebration filled with private access, cozy family moments and timeless city traditions, you’ve given them more than a grand getaway; you’ve given them memories they’ll talk about for years.

Here’s to a season filled with warmth, wonder and the joy of celebrating together.

Related Content

• How Much Does It Cost to Be a Grandparent?
• Gift Like Buffett: Three Financial Gifts for Kids and Grandkids
• Grandparents by Design: 5 Upgrades for Unforgettable Visits
• How Smart Is Your Gifting Strategy? Take Our Grandparents' Legacy Quiz

For decades the message to American workers has been consistent: Contribute to a 401(k), capture the match, leave it alone.

Millions did exactly that, rolling old plans into IRAs and sitting through three or four bear markets to build the balances pensions used to provide.

Then, somewhere in their early 70s, the rules changed. The account they spent a career filling comes with a withdrawal schedule they didn't write. That's the paradox of required minimum distributions (RMDs).

The better you are at saving inside a tax-deferred account, the more likely your RMD becomes a tax problem rather than a paycheck.

Calculate your first RMD now, even if it's a decade away

RMDs generally begin at 73 for people born from 1951 through 1959, and at 75 for those born in 1960 or later. (PDF) You don't have to wait to see the number. Take your current traditional IRA and 401(k) balances, divide by 26.5 (the IRS Uniform Lifetime Table factor for age 73), and you have a working estimate of your first required distribution: roughly 3.8% of the balance.

On $2 million, that's about $75,000 of taxable income in your first RMD year, whether you spend it or not.

Then do the second half of the math, which most people skip. Write down what you actually need each year, and subtract. A retiree who needs $80,000 and is required to take $120,000 isn't $40,000 richer; the surplus lands in a brokerage account, and the tax return counts it as income anyway.

That gap is the number to manage, and it widens with age. The table factor falls to 12.2 by 90, so the same balance throws off about 8.2% a year instead of 3.8%.

Find out which threshold you'll cross first, then aim below it

Rather than tracking every rule, identify the one that catches you soonest. Put your projected income at RMD age next to these four numbers and see which is closest:

• $44,000 joint, $34,000 single. Above that combined income, up to 85% of your Social Security is taxable. The lower tier starts at $32,000 and $25,000. These base amounts are fixed in statute rather than indexed, so a rising RMD walks you up the scale permanently.
• $150,000 joint, $75,000 single. Above that modified adjusted gross income, the new deduction for older adults starts to phase out: An extra $6,000 per person 65 and older, or $12,000 for a couple in which both qualify, available for 2025 through 2028. It's the threshold most retirees don't yet know exists.
• $218,000 joint, $109,000 single. Cross it, and your Part B premium goes from $202.90 a month to $284.10, plus a Part D surcharge. Call it $975 per person for the year.

The action item is narrower than it sounds: In any year you control your income, target a number just under the nearest threshold instead of trying to minimize taxes generally. Coming in $2,000 under $218,000 is worth more than shaving $2,000 off a bracket in the middle of a range.

Watch the calendar at 63, and take your RMD before you convert

The Medicare surcharge runs on a two-year lookback, set from the return filed two years earlier. That makes age 63 a real deadline: the income you report that year determines your premium at 65.

If a large Roth conversion or a property sale is coming, doing it at 62 rather than 63 can keep it out of the calculation entirely.

Roth conversions are the main tool for shrinking future RMDs, since Roth IRAs aren't subject to distributions during the original owner's lifetime. But the conversion is taxable income in the year you do it, so it can trip every threshold above. Two rules make it manageable.

• First, size the conversion to a threshold, not to a goal: "convert as much as possible" is how people buy themselves a surcharge.
• Second, once you're subject to RMDs, take the distribution before you convert, because an RMD isn't eligible for rollover or conversion.

If you give to charity, donate from the IRA instead of your checkbook

In 2026 you can direct up to $111,000 per person from an IRA to a qualified charity as a qualified charitable distribution, available from age 70½, counted toward your RMD, and excluded from income rather than deducted.

The exclusion is the point: Because the money never enters your adjusted gross income (AGI), it doesn't push you toward the thresholds above, which a cash donation and a deduction won't do for you.

Two mechanics matter. The transfer has to go directly from the custodian to the charity, and donor-advised funds don't qualify. Tell your custodian in the fall, not in late December.

Run the survivor's tax return before you need it

Take this year's income and refile it mentally as a single taxpayer: one Social Security benefit instead of two, single brackets and Medicare thresholds at half the joint amounts. The IRA balance and the RMD barely change when a spouse dies, so the survivor often pays a higher rate on less income.

If that exercise moves the survivor into a higher premium tier, you've found a concrete argument for converting more now, while joint brackets and joint thresholds are still available. That's a decision to make in your 60s, not a discovery to make in your 80s.

A $3 million IRA looks better than $2 million on a statement. But if the larger balance produces bigger forced distributions, more taxable Social Security and higher Medicare premiums, the balance alone doesn't tell you much.

The 401(k) generation was measured on what it could accumulate. In retirement, the number that matters is how much of it you keep.

Related Content

• Stop Treating Your RMD Like It's a Chore: The Smartest Way to Handle It This Year
• Got $2.5 Million Saved for Retirement? Here Are the Huge RMDs You Must Take at 73, 75, 80 and 85
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
• How to Calculate RMDs (Required Minimum Distributions) for IRAs
• 5 Costly RMD Mistakes That Will Put a Dent in Your Savings (and How Early Planning Can Help)

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 year, tens of millions of Americans flock to holiday markets across the country and come home with handcrafted ornaments, artisan sweets, and festive keepsakes.

Yet while seasonal pastimes like gingerbread decorating and train rides delight visitors of all ages, few traditions hold as much cultural weight as the authentic German Christkindlmarkt.

And what's more quintessentially German than a cup of Glühwein (hot mulled wine)?

Behind that steaming mug, however, lies an unexpected expense: state excise taxes. Although these upstream fees quietly shape wholesale prices, the cost of festive cheer varies dramatically depending on which state's borders you visit.

So pack your finest winter woolens and grab a mug: here's where Alpine charm meets wine taxes on a budget.

Top Christmas Markets ranked by wine tax in 2026

To compare wine taxes across America's premier holiday destinations, we looked at ten standout Christmas markets featured in Travel + Leisure magazine.

We then ranked them by their mandatory state wine excise tax rates, utilizing the latest data from the Tax Foundation. The comparison uses imported wines (11% ABV) per gallon.

Keep in mind that state excise taxes are built into the wholesale price upstream, providing a foundational baseline for beverage costs across each state. Thus, festival prices on the ground are also shaped by factors like local sales taxes, wine selections, and souvenir packages.

Still, this ranking offers a unique peek into how state tax policy frames the nation’s holiday celebrations — one warm sip at a time.

10. Bethlehem, Pennsylvania

State wine tax: N/A, most expensive

Dates: Nov. 13 - Dec. 20, 2026

Pennsylvania starts our list out on a unique note: it is an alcohol "control state." This means the state government maintains a monopoly over all wine distribution with a 30% wholesale markup and an 18% state liquor tax built into every bottle.

Tickets to the Bethlehem Christmas Market also aren't free, typically running $14 on Thursdays and Fridays, and $16.50 on Saturdays and Sundays. (Admission is free every Friday from 5 to 8 p.m., and kids 5 and under enter free.)

But just because your mulled wine is taxed a little higher, your holiday spirits shouldn't be down. Hosted by the nonprofit ArtsQuest, the European-style Christkindlmarkt in Bethlehem, Pennsylvania, is a festival for the books.

Set against the dramatic backdrop of towering 19th-century blast furnaces, the market features over 200 artisans and crafters from across the U.S. Between shopping, you can savor traditional German fare like Kartoffelpuffer (potato pancakes), sizzling bratwurst, and hot apple strudel.

Or, visitors may watch master craftsmen create delicate hand-blown glass art and ice sculptures. To round out the experience, pair your warm mug of Glühwein with a stay at the Historic Hotel Bethlehem, an award-winning 1922 landmark famous for its lavish holiday lobby tree displays.

From traditional gifts to warm wine in America's official "Christmas City," head to Bethlehem, Pennsylvania, this winter for a shopping experience unlike any other.

9. Cullman, Alabama

State wine tax: $1.70

Dates: Nov. 19 - Dec. 23, 2026

The Cullman Christkindlmarkt in North Alabama might not be the first place that springs to mind for snowy alpine nights, but its deep German heritage makes it a holiday standout.

Located in downtown Depot Park, the festival offers free admission and parking, though rides and activities cost extra. If you plan to grab a glass, expect local pours to carry a premium: Alabama's state wine excise tax sits at $1.70 per gallon, ranking among the highest rates on our list.

Founded in the 1870s by German immigrant Colonel Johann Gottfried Cullmann, the town honors its roots with a giant 47-foot-wide Schwibbogen (traditional candle arch) at the festival entrance. Just beyond stands a 40-foot Weihnachtspyramide (German Christmas pyramid) hand-carved in Germany, featuring rotating biblical and woodland scenes.

According to city organizers, both structures rank as the largest and tallest imported German holiday displays in North America.

Stroll past wooden artisan chalets offering European crafts, and you'll find live copper- and iron-smithing demonstrations, a carousel, and an express holiday train ride for the kids. Plus, visitors can take a spin around the outdoor ice rink or warm up with authentic schnitzel, candied roasted nuts, and, of course, steaming mugs of hot spiced mulled wine.

Ergo, if you're looking for record-breaking German craftsmanship and family-friendly Southern warmth this holiday season, you might check out Cullman, Alabama, for an unforgettable holiday tradition.

8. Chicago, Illinois

State wine tax: $1.39

Dates: Nov. 20 - Dec. 24, 2026

Chicago's world-famous German holiday market is widely known as the largest in the U.S., with 2026 marking its 30th anniversary. While general admission is free across all festival grounds, grabbing a mug of traditional mulled wine will cost you a bit more: Illinois levies a wine excise tax of $1.39 per gallon, ranking on the higher side of our list, according to the Tax Foundation.

The Chicago Christkindlmarket spreads across three locations in the area. Downtown's iconic Daley Plaza serves as the original festival grounds, with traditional candy-striped wooden chalets, behind-the-scenes tours, and an opening-night preview party.

Meanwhile, just outside Wrigley Field, the market at Gallagher Way offers a playful, community-focused vibe; it has an open-air ice rink and winter rides open through New Year's Eve. Out in the suburbs, the RiverEdge Park location in Aurora is the largest of the three in physical size, offering over 60 vendors and plenty of breathing room to browse.

Chicago checks every box for holiday fanfare, too. From imported European glass ornaments and nutcrackers to live brass bands and fresh gingerbread hearts (Lebkuchen), there's plenty to see and taste.

And for an elevated experience, adults 21 and older can book a curated tasting flight featuring premium seasonal German wines paired with savory bites exclusively at the Aurora location— or purchase a special commemorative stein with their favorite piping-hot spiced mulled beverage at any of the three markets.

Whether you're ice skating next to the ballpark or sipping mulled wine beneath downtown skyscrapers, Chicago, Illinois proves you don't need to cross the Atlantic for world-class holiday Gemütlichkeit.

7. Leavenworth, Washington

State wine tax: $0.87

Dates: Nov. 27 - Dec. 24, 2026

Leavenworth's "Village of Lights: Christmastown" transforms this postcard-perfect Bavarian village with over half a million twinkling holiday bulbs. Admission to explore the illuminated town square and streets is completely free.

And if you stop into the local tasting rooms, Washington's wine excise tax sits at a moderate $0.87 per gallon, placing it comfortably in the middle of our ranking according to the Tax Foundation.

Framed by the snow-capped peaks of the Cascade Mountains, Leavenworth stays festive long after the official market season. While Christmastown programming wraps up on Christmas Eve, the decorative lights remain on through the end of February, making it a quiet, scenic spot for late-winter weekend trips.

On festival weekends, Bavarian brass quartets and roaming carolers fill the streets as visitors browse local artisan shops along Front Street, take horse-drawn carriage rides, or view the annual gingerbread house displays at the Festhalle. Off the main strip, paid attractions include the Leavenworth Nutcracker Museum — which displays more than 9,000 nutcrackers from 50 countries — and the Leavenworth Reindeer Farm.

Leavenworth, Washington, offers an authentic winter escape without the high-ticket price tag of premier ski resort towns, especially if you stick to free street festivities and local tasting rooms.

Want to live a little closer to the action? Here are the ten cheapest places to live in Washington.

6. Silverton, Oregon

State wine tax: $0.67

Dates: Nov. 20 - Dec. 31, 2026

The Silverton Christmas Market has tradition meeting evergreen woodlands.

With an Oregon state wine excise tax of just $0.67, per the Tax Foundation, you won't pay much of a tax premium on your warm mugs of spiced Glühwein. Ticket prices generally run from $15 to $25+ for adults and $8 to $12 for kids ages 6 and older, depending on the date (all tickets must be booked online in advance).

Set across the sweeping grounds of the Oregon Garden Resort, the festival transforms the city's botanical garden into an immersive winter wonderland of two million glowing lights. Between light tunnels and forest trails, visitors can glide across a full-sized ice-skating rink or race down a family-friendly snowless tubing hill.

The market also embraces European folklore with special Krampusnacht appearances alongside traditional Santa visits for the little ones.

When you're ready to shop, wander through dozens of German-style wooden chalets stocked with hand-poured beeswax candles, artisan puzzles, authentic wooden incense smokers (Räuchermänner), and of course plenty of sweets. The Biergarten serves up warm Bavarian pretzels, authentic sausages, regional Willamette Valley wines, and steaming mulled wine poured into collectible souvenir boots.

Come to Silverton for a modest wine excise tax, but stay for a magical woodland light festival that feels like a slice of the Black Forest.

See also: 10 Cheapest Places to Live in Oregon.

5. Kennebunkport, Maine

State wine tax: $0.60

Dates: Dec. 3 - Dec. 13, 2026

Every December, Kennebunkport turns classic holiday traditions on their head with its 11-day Christmas Prelude. You won't find generic alpine chalets here; the town leans entirely into its rugged coastal roots. In fact, HGTV named it the "#2 Christmas Town in America" — largely because Santa skips the sleigh to arrive by lobster boat, flanked by local "lobster elves."

The town’s coastal personality is on full display at Cape Porpoise, where locals stack real lobster traps and colorful fishing buoys into a towering, illuminated Christmas tree. Down in Dock Square, fresh pine garlands are woven with seashells and sand dollars, circling a gigantic evergreen at the center of the village.

Between craft fairs loaded with handmade Maine goods, you can watch the whimsical Christmas Hat Parade, cheer on costumed dogs at the annual Pooch Parade, or catch the evening fireworks over the harbor after candlelight caroling.

Best of all, soaking in the coastal atmosphere will not derail your budget. Wandering the waterfront streets, watching the tree lightings, and browsing the village shops costs nothing. Grabbing a warm drink along the way may be easier on the wallet, too: Maine levies a modest wine excise tax of just $0.60 per gallon, placing it comfortably among the five cheapest states on our list according to the Tax Foundation.

Whether you're in it for hot mulled wine, a bread bowl of fresh clam chowder, or coastal holiday cheer you cannot find anywhere else, Kennebunkport delivers one of the most distinctive winter celebrations in New England.

4. Carmel, Indiana

State wine tax: $0.47

Dates: Nov. 21 - Dec. 24, 2026

Carmel, Indiana, may not be named after the sweet confection, but its award-winning German holiday market is still as sweet as it gets. Ranking fourth on our list, the Hoosier State levies a modest wine excise tax of just $0.47, per the latest data from the Tax Foundation. General admission to the festival is also free, which includes parking in designated garages and a complimentary shuttle service.

Taking over Carter Green, the market centers around an outdoor ice-skating rink framed by more than 60 traditional wooden huts imported directly from Germany. Anchoring the festivities is a 10-ton, 33-foot-tall Glühwein pyramid — the only one of its kind in the U.S. — illuminated by over 3,000 lights and serving as the market's central gathering point.

In true Nuremberg fashion, the market kicks off its season with the arrival of the golden-crowned Christkind (Christmas spirit), who rings the ceremonial market bell to welcome visitors and officially launch the holiday calendar.

For food lovers, the stalls serve some of the most authentic German street fare in the U.S. Vendors scrape melted raclette cheese straight from the wheel onto warm, crusty baguettes, while bakers spin fresh chimney cakes (Baumstriezel) over hot rotisseries. Shoppers can also browse artisan-made cuckoo clocks, wooden music boxes, and delicate blown-glass ornaments.

Come to Carmel, Indiana, for budget-friendly wine taxes, and linger for an authentic German holiday market that routinely ranks as one of the best in North America.

3. New York City, New York

State wine tax: $0.30

Dates: October 28 - Jan. 3, 2027

Christmas markets across the Big Apple charge no admission, making spectacular holiday sightseeing surprisingly wallet-friendly.

Ranking third on our list, the Empire State levies one of the lowest wine excise taxes at just $0.30 per gallon — or roughly six cents per standard 750 mL bottle. Although admission to browse New York City stalls is free, keep in mind optional experiences like ice skate rentals, private heated igloos, or guided holiday lights tours will add to your tab.

New York City takes the traditional European market format and turns it into a citywide sensory spectacle in several open-air markets. The flagship destination, the Bank of America Winter Village at Bryant Park, transforms Midtown with over 180 glass chalets, a 17,000-square-foot ice-skating rink, and a rinkside food and cocktail hall called "The Lodge."

Further downtown, the bustling Union Square Holiday Market features candy-striped stalls with handmade jewelry, leather goods, and local crafts, while the Columbus Circle Holiday Market sits directly at the foot of Central Park.

Between shopping trips, visitors can marvel at the iconic window displays along Fifth Avenue and outside Macy's Herald Square, take in the gigantic Rockefeller Center Christmas Tree, or warm up at a festive winter pop-up bar. Food stalls throughout the parks serve Bavarian pretzels, piping-hot Belgian waffles, and gourmet cider doughnuts along with steaming cups of cider and wine.

Dreaming of a white Christmas at one of the most romantic cityscapes? New York City delivers storybook cheer worthy of a cheesy holiday movie.

2. Rochester, New York

State wine tax: $0.30

Dates: Nov. 27 - Dec. 20, 2026

Although Rochester's state wine excise tax rate matches New York City's, this historic city claims the higher ranking on our list thanks to lower local sales taxes. Even better for your holiday wallet, Rochester hosts multiple distinct holiday celebrations — and admission across the board is free.

The most well-known celebration is the annual ROC Holiday Village, which transforms downtown's Dr. Martin Luther King Jr. Memorial Park into a winter wonderland. Visitors can take free spins around the open-air ice-skating rink (with free skate rentals included), browse cozy shopping huts featuring over two dozen artisans, and pay a visit to Santa in his workshop.

When you need to escape the chilly Upstate air, you can warm your hands beside outdoor fire pits, duck inside the heated Triple-O Lodge for beer or wine, or reserve a private, furnished heated igloo overlooking the ice.

Just across town at Rochester Public Market, the tradition continues with the Holidays at the Market series. This is where dozens of regional vendors sell handmade holiday wreaths, specialty foods, and artisan gifts alongside free horse-drawn carriage rides and festive kids' activities like cookie decorating.

And if you want to sample regional Finger Lakes vintage wines with your shopping list, head just over to Fairport for Casa Larga Vineyards' Holiday Wine & Craft Marketplace. Here, local artisans pair holiday gifts with local wine flights.

From warming up in a private igloo with a mug of spiced cider or savoring local food trucks beside the rink, Rochester, New York delivers cozy Upstate holiday magic on a shoestring budget.

Related: The ten cheapest places to live in New York.

1. Cambria, California

State wine tax: $0.20

Dates: Nov. 27 - Dec. 31, 2026

Claiming the number-one spot on our ranking with the lowest state wine excise tax in America is Cambria, California, where the Golden State levies a rate of just $0.20 per gallon — translating to roughly four cents per standard 750 mL bottle, per the Tax Foundation.

Ticket pricing isn't free, however, and typically ranges from $25 to $45 depending on the date.

Located in the coastal pine forests of California's scenic Central Coast, the Cambria Christmas Market turns Cambria Pines Lodge and Nursery into a German fairy tale. The festival's signature feature is a walk-through light display, illuminated by more than three million bulbs, complete with glowing color-changing tunnels and animated storytelling displays.

Visitors can also hop aboard the festive miniature train ($5 per person), browse open-air chalets selling crafts, or warm their hands in the bustling Biergarten. The market serves up authentic German comfort foods like hot pretzels, savory bratwurst, or candied nuts, accompanied by live music and strolling carolers.

So if you're looking for spectacular holiday lights, coastal mountain scenery, and relatively cheaply taxed German Glühwein, make Cambria your next winter getaway — and see what all the fuss is about.

Explore More

• Can I Deduct This? A Quick Tax Quiz
• The Boots Rule of Retirement Tax Planning
• Standard Deduction Filers Get a New Charitable Tax Break

You spend most of your working life answering one retirement question: Am I saving enough?

Then you retire, and the questions change. Where will your monthly income come from, and which accounts should you tap first? How much should you set aside for taxes? When should you claim Social Security? What happens if the market drops right after you retire?

I've worked with plenty of people who spent years preparing financially for retirement but hadn't thought nearly as much about how they would manage their money once they got there.

Your first year of retirement is when you start getting some of those answers. Here are five decisions I'd focus on.

1. Decide where your retirement paycheck will come from

For most of your career, money showed up in your checking account every couple of weeks. In retirement, you're responsible for creating that paycheck yourself.

Start with how much you need to cover your regular expenses each month. Subtract Social Security and any other reliable sources of income, such as a pension. What's left is the amount you'll need to cover from savings and investments.

Then decide where that money should come from. You might have cash savings, a taxable brokerage account, a traditional IRA or 401(k) and Roth accounts. Withdrawing $50,000 from one of those accounts instead of another can have very different tax consequences.

Withdrawals from traditional retirement accounts are generally taxed as ordinary income. In a taxable brokerage account, you generally owe tax only on realized gains, not the entire amount you sell. Qualified Roth withdrawals are tax-free.

There's no withdrawal order that works for everyone. In some years, it might make sense to use more from a taxable account. In others, deliberately taking money from a traditional IRA could make sense.

If your income is lower in the years between retiring and claiming Social Security, for example, deliberately taking IRA withdrawals or carrying out Roth conversions could reduce future required minimum distributions (RMDs) and give you more control over taxable income later.

Boldin's retirement planning tool can help you compare different withdrawal strategies side by side and see how each one affects your taxes and how long your savings last. (Note: I'm head of support and a financial planning educator for Boldin.)

The important part is having a reason for where the money is coming from, rather than withdrawing from whichever account happens to be most convenient.

Once you've decided, you can set up regular transfers to your checking account. Many retirees like keeping the same rhythm they had while working, with a set amount arriving each month.

2. Figure out your new tax routine

Taxes can be one of the bigger adjustments during the first year of retirement.

While you're working, your employer withholds taxes from each paycheck. Once you retire, you may have several sources of income, each with different tax treatment and withholding options:

• Pension income and withdrawals from pretax retirement accounts are generally taxable
• Investment income and realized capital gains can add to your tax bill
• Depending on your other income, up to 85% of your Social Security benefits may be taxable at the federal level

You still need to pay taxes throughout the year. That might mean withholding from pension payments or IRA distributions, making estimated tax payments or using a combination of the two.

Pay particular attention if you retire partway through the year. Someone who retires in June might have six months of salary, a bonus or unused vacation payout, followed by retirement account withdrawals for the rest of the year. Add Social Security or investment income and that first tax year can look very different from the years that follow.

That higher income can also show up later. Medicare premiums are based on your income from two years earlier, so a big income year can mean IRMAA surcharges once you're on Medicare. Retirement or a reduction in work can qualify as a life-changing event, however, so you may be able to ask Social Security to base the surcharge on your more recent, lower income.

Estimate your tax liability before the end of the year. It's much easier to adjust your withholding or make an estimated payment than to find out the following April that you significantly underpaid. Taxes withheld from an IRA distribution are generally treated as paid evenly throughout the year, so a withdrawal late in the year can help cover a shortfall.

Once you've filed your first tax return as a retiree, review it. You'll have a much better picture of how your new sources of income are actually being taxed.

3. Decide when Social Security should start

Your retirement date doesn't have to be your Social Security claiming date, and treating them as the same decision can be expensive.

The difference in monthly income is significant. For anyone born in 1960 or later, full retirement age is 67. Someone with a $2,000 monthly benefit at 67 would receive about $1,400 by claiming at 62, or about $2,480 by waiting until 70. Because benefits are adjusted for inflation each year, that gap tends to widen in dollar terms over a long retirement.

If you retire before 70 and have enough savings to cover your expenses, you have a real choice. You could claim now and withdraw less from your portfolio. Or you could draw more from savings in the early years and let your benefit keep growing. Delaying can also create a window of lower-income years that works well for the Roth conversions and bracket planning covered earlier.

For married couples, this is a household decision. When one spouse dies, the survivor keeps the larger of the two benefits. That means the higher earner's claiming age affects not just their own income but how well the other spouse is protected later, potentially for decades.

A few first-year details are worth knowing:

• If you claim before full retirement age and retire partway through the year, a special monthly rule may let you receive full benefits for months you're no longer working, even if your earlier salary exceeded the annual earnings limit.
• If you claim and then change your mind, you can withdraw your application within 12 months. You'll have to repay what you received, and you can only do this once.
• If you've already reached full retirement age, you can voluntarily suspend your benefit to earn delayed retirement credits.

Health, longevity and cash flow all belong in this decision. What shouldn't drive it is timing alone. Claiming the month you retire shouldn't be an automatic decision. Run the numbers first.

4. Decide how you'll cover healthcare

For many people, health insurance is the biggest open question when they leave work. How you handle it depends largely on whether you retire before or after 65.

If you retire before 65, you'll need coverage to bridge the gap until Medicare. Common options include retiree coverage from a former employer, joining a working spouse's plan, continuing your employer plan through COBRA or buying a plan through the Affordable Care Act marketplace.

COBRA keeps your current coverage in place, but you'll generally pay the full premium yourself, which can come as a shock.

Marketplace coverage ties directly back to your withdrawal strategy because premium tax credits are based on your household income. Taxable traditional IRA withdrawals, Roth conversions and realized capital gains can all increase that income. The accounts you draw from in those early years can meaningfully change what you pay for health insurance.

If you're 65 or older, Medicare becomes the center of the decision. Your initial enrollment period runs for seven months around your 65th birthday. If you don't have qualifying coverage from current employment, missing it can lead to late enrollment penalties that last as long as you have Medicare.

This applies even if you've delayed Social Security, since enrollment in Medicare won't happen automatically in that case.

Ask yourself:

• What will my premiums, deductibles and out-of-pocket costs realistically add up to each year?
• If I'm choosing Medicare, do I want original Medicare with a Medigap and Part D plan, or a Medicare Advantage plan?
• Do I have health savings account (HSA) money I can use for qualified medical expenses?

Whichever route you take, ensure you're building healthcare into your budget as its own line item.

5. Decide what you'll do during a bad market

A market decline feels different when you're retired and withdrawing money from your portfolio.

Say you retire with $1 million and plan to withdraw $50,000 during your first year. Then a significant market decline occurs, and your portfolio is down to $850,000. You still need money to live on, but now you're taking withdrawals from a smaller portfolio. Selling investments after they've fallen also leaves less money invested to participate in a recovery.

Poor returns early in retirement can be particularly damaging when combined with ongoing withdrawals. This is known as sequence of returns risk, and it's worth planning for before it happens.

Ask yourself:

• How much of my near-term spending do I want in cash or other relatively stable investments?
• Which assets will I sell to fund withdrawals, and can those sales also help rebalance my portfolio?
• Which of my expenses are actually flexible?

Housing, utilities and groceries probably aren't going away because the market had a bad year. A major vacation, new car or large home project might be easier to delay.

You don't need to change your spending every time the market falls. Having some flexibility just gives you more options if a significant downturn happens early in retirement.

Replace assumptions with real numbers

A retirement plan you build while you're working is based largely on assumptions about a life you haven't lived yet. Your first year is when those assumptions start meeting reality.

After six months or a year, compare your actual spending with what you planned. Don't worry too much about individual months. Look for patterns.

If you planned to spend $80,000 a year and you're on pace to spend $95,000, figure out what's driving the difference. If you're consistently spending less than planned, you may have more room than you thought.

Look beyond spending, too:

• Are your taxes coming in where you expected?
• Are your withdrawals and cash reserves holding up?
• Are healthcare costs in line with your budget?
• If you delayed Social Security, does that decision still make sense?

Then update your plan with the real numbers and see whether you're still on track. If you're not, catching it after the first year gives you far more options than discovering it several years later.

Related Content

• 3 Options for Setting Up Your Retirement Paycheck: Choose the One That Suits You
• Five Mistakes to Avoid in Your First Year of Retirement
• 7 Money Habits of Retirees Who Never Stress About Spending
• Retirement Milestone Ages Most People Miss (And What to Do About Each One)
• I'm a Financial Planner: These 4 Spending Mistakes Can Derail Your Retirement Plan

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

For decades, the standard retirement playbook has been simple: Max out your traditional 401(k), take the upfront deduction and let the IRS wait. Watching your taxable income shrink feels like an immediate win.

But follow that path for 30 years and you may arrive at retirement with an unwelcome discovery. A portfolio that is almost entirely pretax isn't just a nest egg. It's an income tax bill in waiting, and you don't get to decide when it comes due.

I see this pattern often among successful savers. The problem isn't that they saved too little. It's that they saved in only one kind of account.

How a pretax nest egg becomes a tax trap

Every dollar you withdraw from a traditional 401(k) or IRA is taxed as ordinary income. Once required minimum distributions (RMDs) begin, at 73 for most of today's retirees and 75 for those born in 1960 or later, the IRS no longer waits for your permission.

Consider a married couple, both 75, with $4 million in traditional IRAs. Their RMD comes to roughly $163,000. Add $80,000 in Social Security benefits, up to 85% of which becomes taxable, and their modified adjusted gross income lands around $230,000. That's above the $218,000 threshold that triggers Medicare's IRMAA surcharges in 2026, raising Part B and Part D premiums for both spouses.

If one spouse dies, the RMDs keep coming, but the survivor files as single, with narrower brackets and an IRMAA threshold of just $109,000. This "widow's penalty" hits pretax-heavy portfolios hardest.

Heirs feel the pressure too. Since the SECURE Act eliminated the "stretch IRA" for most non-spouse beneficiaries, heirs generally must empty an inherited IRA within 10 years. A child who inherits a $1.5 million IRA at 50 could add $150,000 or more to their taxable income each year, right in their peak earning years.

The goal isn't to minimize taxes this year. It's to minimize them over your lifetime, and sometimes that means paying a bit more now to avoid paying far more later.

The case for three tax buckets

Because no one can reliably predict future tax brackets, markets or policy, the more durable approach is tax diversification: Spreading savings across three buckets.

Tax-deferred accounts, such as traditional 401(k)s and IRAs, lower your tax bill during peak earning years. Later withdrawals are taxed as ordinary income.

Taxable accounts, including individual, joint and trust brokerage accounts, are funded with after-tax dollars. They offer flexibility, with no early-withdrawal penalties, long-term capital gains rates and a step-up in cost basis for heirs.

Tax-free accounts, namely Roth IRAs, Roth 401(k)s and health savings accounts, are funded after tax, but qualified withdrawals are tax-free. Roth accounts carry no RMDs for the original owner, and heirs inherit them income-tax-free.

Holding all three gives you something a single-bucket strategy can't: Control. In the years between retirement and claiming Social Security, you can draw from pretax accounts deliberately, filling lower brackets without spilling into higher ones.

Large purchases get easier, too. If you're in the 24% federal bracket and need $100,000 for a new roof, you'd have to withdraw roughly $132,000 from a traditional IRA to net that amount after federal tax, which could push you into an IRMAA tier. Blending the withdrawal across all three buckets keeps both your effective rate and your Medicare premiums in check.

What I tell savers to do now

Split your contributions. If your employer plan offers a Roth 401(k), consider directing a portion of your contributions there. The 2026 employee limit is $24,500 across traditional and Roth combined. Starting this year, workers 50 and older who earned more than $150,000 in FICA wages the prior year must make catch-up contributions on a Roth basis, so many high earners are getting a Roth bucket whether they planned for one or not.

Use the back door. Direct Roth IRA contributions phase out in 2026 between $242,000 and $252,000 of modified AGI for joint filers ($153,000 to $168,000 for single filers). Above that, a backdoor Roth IRA remains available, and if your 401(k) permits after-tax contributions and in-plan conversions, a mega-backdoor Roth can move far larger sums.

Find your conversion window. The years after you stop working but before RMDs and Social Security begin are often your lowest-income years. Converting pretax dollars to Roth during that stretch, up to the top of a target bracket, locks in today's known rates.

Build the taxable bucket. A brokerage account alongside your 401(k) gives you access to funds before 59½ and a step-up in basis for heirs.

What not to do

Don't convert without a plan. A large Roth conversion can push you into a higher bracket and, if you're 63 or older, raise your Medicare premiums, since IRMAA looks back two years. And when you can, pay the conversion tax with outside cash rather than from the IRA itself to preserve more tax-free growth.

The bottom line

A lifetime tax projection doesn't require a crystal ball. If nearly all of your savings sit in pretax accounts, consider taking steps today to diversify across all three tax buckets.

Even modest changes, such as redirecting part of your 401(k) contributions to Roth or opening a taxable brokerage account, can give you far more control over your tax bill in retirement and leave a cleaner legacy for your heirs.

Related Content

• Strong Tax Strategies Deal With the Next Few Decades, Not the Next Deadlines
• 5 Tax-Saving Strategies That Can Help You Have a Better Retirement, From a Financial Planner
• I'm a Financial Adviser: This Is the Retirement Tax Assumption That Could Cost You
• Our Taxpaying 'Golden Hour' Won't Last: These 4 Urgent Moves Can Help Insulate Your Wealth Before It's Too Late
• As the Ultra-Rich Build Mega-IRAs, Is It Time to Reposition Large Growth Assets?

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

Stocks closed out a volatile week on a relatively quiet note as market participants caught their breath after Thursday's broad-based beatdown.

The tech-heavy Nasdaq Composite made a valiant attempt at a rebound as several tech stocks bounced, but Friday's gains put just a small dent in its weekly decline. Moves by the broader S&P 500 and blue-chip Dow Jones Industrial Average were far less impressive.

At the close, the Nasdaq was up 1.1% at 24,579 — still in correction territory, but paring its week-over-week deficit to 3.4%. The S&P 500 finished the day up 0.3% at 7,376, and the week down 2.7%. And the Dow slipped 0.5% Friday to 51,285, and was 0.9% lower on the week.

Markets sold off sharply Thursday on concerns that Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout.

Several tech stocks that were hit the hardest on Thursday swung higher on Friday, including memory chipmaker Micron Technology (MU, +5.1%) and artificial intelligence (AI) bellwether Nvidia (NVDA, +2.8%).

However, reports that Microsoft (MSFT, -1.0%) plans to use fewer neoclouds, which provide high-performance infrastructure to power AI workloads, hung over the tech sector.

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.

CoreWeave (CRWV, +6.3%), one of Wall Street's most notable neoclouds, headlines next week's earnings calendar. Wall Street is forecasting a wider per-share loss than the company reported in the year-ago period, though revenue growth is expected to be strong.

Airbnb soars on earnings beat

Outside of the tech sector, Airbnb (ABNB) jumped 11.7% after the online travel company reported third-quarter earnings of $3.16 per share, up 43% year over year and more than Wall Street expected.

Revenue also beat estimates, surging 19% to $4.9 billion, the fastest top-line growth in three years.

UBS Global Research analyst Stephen Ju says Airbnb's Q3 results "were the standout" among online travel agents. And while the company is more shielded from major uncertainties in the Middle East and Europe, "more important consideration for us on ABNB shares is the company's pace of innovation for which is seemingly arriving at a faster clip."

Ju maintained a Neutral (Hold) rating on ABNB after earnings, but raised his price target on the consumer discretionary stock to $191 from $181.

DraftKings spirals after lowering guidance

DraftKings (DKNG), on the other hand, plunged 21.3% — its worst day since November 2022 — after the sports gambling company reported a top- and bottom-line third-quarter miss. DKNG also cut its full-year forecast, saying its investments in prediction markets will cut into profits.

"Investors are disappointed by the magnitude of PM investment given the looming regulatory risk around sports event contracts," says BofA Securities analyst Julie Hoover. "DKNG's desire to be best-in-class has driven its top-line success, but greater guardrails around spend, particularly in the current regulatory backdrop, are critical to drive the bottom line and stock."

Hoover reiterated her Buy rating on DKNG after earnings, saying prediction markets are "a potential source of upside" for the stock.

Jobs data blows past expectations, CPI on deck

In economic news, data from the Bureau of Labor Statistics showed the U.S. added 165,000 new jobs in October, blowing past expectations for 59,000 jobs. The unemployment rate dropped to 4.1% from 4.2%.

"The job market strengthened in October, with considerably better payrolls growth than expected," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank. "AI is clearly weighing on some types of white-collar jobs, but not all."

Adams adds that the Fed "will be reassured by the October jobs report, but if the AI sell-off deepens, they could still refrain from a rate hike at their last decision of the year."

According to CME Group FedWatch, futures traders are currently pricing in a 77% chance the Fed will raise interest rates in December — up from 71% a week ago. This is subject to change following the release of the October Consumer Price Index (CPI) report next Tuesday morning.

While headline inflation is expected to moderate as gas prices eased, it will likely remain well above the central bank's 2% target.

Related content

• 2 Sectors, 4 Stocks to Buy This November
• Mapping the Mega Data Centers Powering the AI Revolution
• Earnings Calendar and Analysis for This Week (November 9-13)

Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

Q1. Can you still get a tax credit for an EV charger?

Question: I just bought a Tesla, and I am planning on installing an electric vehicle charger in my home so I can charge my vehicle. Can I get a federal tax credit for installing the charger?

Joy Taylor: No. The EV tax credit expired on June 30, 2026. That means you had to buy the charger and install it in your home by June 30. The federal tax credit is equal to 30% of the cost of equipment and installation of an EV charger or $1,000, whichever is smaller.

Q2. What's the IRS's mileage rate?

Question: What is the IRS's standard mileage rate for business driving for 2026?

Joy Taylor:
- From January through June 2026, the IRS's standard mileage allowance for business vehicle usage is 72.5 cents per mile.
- From July through December of this year, the rate is 76 cents per mile for business driving.

The IRS raised the standard mileage rate mid-year because of the higher gas prices at the pump.

Q3. Federal gas tax

Question: With gas prices so high this year, will Congress suspend the federal gasoline tax?

Joy Taylor: That is unlikely. Some Republican lawmakers have called for a temporary suspension of the (18.4 cents-per-gallon) federal gasoline tax. But many other lawmakers oppose the idea, saying it won't do enough to lower the cost of gas. Others have expressed concern about the already-struggling Highway Trust Fund, which is funded mainly by federal gas tax revenue and faces financial pressure.

Q4. Are online sports betting winnings taxable?

Question: I participate in online sports betting, specifically fantasy football. Are my winnings taxable?

Joy Taylor: Yes. Winnings from online sports betting are taxable as gambling income. This is true whether you are playing in fantasy sports leagues, in which cash prizes are based on the performance of professional athletes, or you are betting on the outcome of a particular event, such as the Super Bowl or a basketball game.

You report winnings on Schedule 1 of Form 1040. If you itemize on Schedule A, you can deduct gambling losses, but the write-off is limited to the lesser of (1) 90% of the losses or (2) the winnings from gambling.

Some gamblers can file Schedule C if their gambling activity is extensive enough to rise to the level of a trade or business, but this can be a tough hill to climb.

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.

Read More

• Ask the Editor Archive
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Is It a Hobby or a Business?
• Ask the Editor: Questions on Selling a Home
• Ask the Editor: 10-Year Rule for Inherited IRAs
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Tax Rules for Landlords

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…

The high-profile Stratos data center in Box Elder County, Utah, highlights the rising peril for AI developers. Fierce opposition and litigation have hindered the start of the project. The facility would use more electricity than the entire state if fully built out to 9 gigawatts of power and would emit enough heat to hike local temperatures a few degrees. Backers say the project will initially use 1.5 gigawatts of power and have launched a campaign to combat attacks they see as unfair or inaccurate.

But other massive data centers have fewer roadblocks and are on pace for completion, according to Epoch AI, a market research firm that tracks construction using satellite imagery, permits and public documents.

To rank the top projects, Epoch AI has converted the estimated capacity of each data center to the equivalent number of Nvidia’s H100 graphics processing units, a standard industry metric.

Source: Epoch AI (computing capacity measured by H100-equivalents)

OpenAI is scheduled to have two of the biggest data centers in 2030, with Stargate New Mexico in Santa Teresa and Stargate Shackelford in Abilene, Texas. Each will cost about $60 billion, with major financial backing from SoftBank and Oracle and will use over 1 gigawatt of power for millions of AI chips. The Stargate project is a $500 billion effort by OpenAI to “unlock the next generation of AI breakthroughs.”

The next-biggest facilities in 2030 will be Microsoft Fairwater in Wisconsin, Meta Hyperion in Louisiana and QTS Cedar Rapids in Iowa. These projects will be far bigger than today’s top data center, SpaceX’s Colossus 2 in Tennessee. Keep an eye on the rocket company’s aggressive plans for AI data centers, including efforts in 2027 and beyond that could send it climbing up the 2030 rankings.

Source: Epoch AI (computing capacity measured by H100-equivalents)

Currently, Virginia is home to the most data centers, followed by Texas. Texas is expected to overtake Virginia in coming years, having more projects in the pipeline. Other states with lots of planned construction include Ohio, Arizona, Iowa and Nevada.

However, future projects come with some uncertainty and assume demand for AI computing keeps soaring.

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.

Related Content

• Is An AI Data Center is Coming to Your Backyard?
• Why AI Superiority is Measured in Gigawatts
• The Risks of an AI Bubble

For many years, sunshine, sandy beaches, great golf courses, warm year-round weather and exclusive luxury communities drew an influx of new residents to Southwest Florida and Tampa Bay.

It has also become more than just a paradise for sun seekers. The "best" coast is now one of the most desirable destinations for high-net-worth individuals looking to relocate — not only for its exceptional lifestyle but for financial reasons, as well.

This area of Florida has emerged as a strategic destination for wealth preservation and long-term financial planning. Favorable tax policies, strong asset protection laws and a business-friendly environment are attracting entrepreneurs, executives, investors and multigenerational families, seeking to optimize both their quality of life and financial future.

No state income tax

Florida has welcomed more than 2 million new residents in the past decade, which has led to significant job growth and created a powerful influx of capital, entrepreneurship and wealth migration.

The state's absence of a personal income tax continues to be a significant driver of relocation decisions, particularly among individuals whose income is derived from asset growth, liquidation events and investment returns.

As many affluent families evaluate their income tax exposure and state of residency, this can have a meaningful impact on overall wealth preservation and financial planning.

For investors, this tax advantage can enhance cash flow, improve capital retention and provide greater flexibility when pursuing investment opportunities, charitable giving and succession planning.

Homestead exemption can save thousands

If someone is considering making Florida their domicile state, there are several financial advantages to consider.

Residents of all states are subject to federal income tax, but Florida residents enjoy no state income tax, estate tax, inheritance tax or intangible tax. This usually means tax savings on IRA withdrawals, pensions, annuities and employment income. However, if you own assets or derive income in or from another state, you might still be subject to income and estate tax in that state.

For example, a Wisconsin resident making more than $280,950 pays a state income tax of 7.65% over and above the federal income tax. A Florida resident's savings in this case is more than $20,000. IRA withdrawals are considered income, too.

Florida residents also enjoy property tax savings and Florida homestead creditor protection. Making your Florida home your homestead with the property tax assessor can lead to a $50,000 reduction in the taxable assessed value of your home.

In addition, the Save Our Homes Property Assessment Cap (PDF) limits the increase in your home's assessed value to no more than 3% annually — regardless of that year's actual appreciation. There are even portability provisions if you sell your home and acquire a new one.

More money to heirs

For high-net-worth families, Florida's absence of a state estate tax and inheritance tax can offer a significant advantage in preserving and transferring wealth. Florida permits a greater portion of a family's wealth to pass to beneficiaries without state-level taxation, which can be particularly valuable for families with substantial investment portfolios, business interests, real estate holdings and other significant assets.

The resulting tax efficiency can also support long-term portfolio growth by allowing more capital to remain invested rather than being directed toward state tax obligations. Over multiple generations, these savings might compound substantially, enhancing overall family wealth and providing greater flexibility in estate and succession planning.

The Florida wealth management industry is well equipped to assist families with sophisticated investment management, trust administration, financial planning, wealth transfer strategies and multigenerational guidance.

A strong housing market

Tampa Bay and Southwest Florida are attractive locations for long-term real estate investments. Several factors driving high-net-worth individuals to invest in real estate include:

Continued population growth. From Tampa to Marco Island, the broader Gulf Coast corridor has experienced substantial population growth during the past decade, with six regional counties collectively increasing from roughly 3.2 million residents in 2015 to more than 4.0 million in 2025 — an increase of approximately 25%.

Limited coastal land. As affluent individuals and businesses continue relocating to the region, demand for premium properties is increasing while available land remains constrained. This supply-demand imbalance can support long-term property appreciation, pricing strength and wealth preservation for strategically positioned investors.

Strong tourism and rental demand. Despite several hurricanes, tourism numbers have increased significantly since COVID. Southwest Florida International Airport (RSW) reported a record 11.15 million passengers in 2025, marking the busiest year in the airport's history.

Ongoing redevelopment and reinvestment. Southwest Florida continues to appeal to affluent buyers because of its new luxury residences, upgraded properties and modern community amenities, which elevate market desirability. Meanwhile, infrastructure improvements can strengthen resilience to climate-related risks. These enhancements might also support long-term property appreciation, premium rental rates and stronger demand from financially stable, long-term tenants.

The bottom line

Florida's Central and Southwest Florida coastlines have evolved into far more than premier lifestyle destinations. They offer a distinctive combination of financial, legal and lifestyle advantages that resonate with high-net-worth individuals and families.

The absence of a state income tax, favorable estate planning environment, robust homestead protections and strong real estate fundamentals create a compelling framework for wealth preservation and long-term financial stewardship.

Coupled with a desirable quality of life and an increasingly sophisticated business and investment ecosystem, the region has established itself as a leading destination for those seeking to align their personal, family and financial objectives within a single strategic location.

Hood Craddock, CPA, is director of family office services at Florida Trust Wealth Management in Tampa Bay and relationship manager for many families. He specializes in serving clients with complex estates, alternative and special assets and real estate investments including development.

James McArthur is executive vice president on the family office services team at Florida Trust Wealth Management in Tampa Bay. He has more than 30 years of experience in management consulting, family office counseling, restructuring, special situations, turnarounds and commercial finance.

Related Content

• Florida Tax Guide
• The Real Cost of Retiring in Florida: Insider Tips for Newcomers From a Wealth Adviser Who Lives There
• Why Do People Retire to Florida? 9 Things You Must Know
• Thinking of Retiring to Florida? These Hidden Costs Could Drain Your Budget
• Retirement Location, Location, Location: Can Florida Be Beaten?

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

Editor's note: This article is the second in a three-part series on the benefits of taking a more thoughtful and proactive approach to financial planning. Part one is Protecting Family Wealth Means Allowing Your Kids to Get Involved — and Letting Them Make Some Mistakes. Here's Why.

In the first article of this series, I wrote about a quiet transition moment that happens as children move from financial dependence toward financial awareness and responsibility.

The next quiet transition moment is in the opposite direction, when we recognize that our aging parents may one day need help managing the lives they have spent decades building.

There is rarely a single moment when this shift begins. Your parents may be retired but still independent and active — traveling, volunteering and enjoying life. Nothing appears to require immediate attention, yet this is the best time to start planning.

As a member of the "sandwich generation," I know that caring for aging parents while juggling your own family's needs and your career can be challenging.

You'll need to have the right legal structures and documents in place, as well as an understanding of available resources. But the first step is to create continuity without making parents feel that their independence is being questioned or taken away.

Start with permission, not an account statement

Adult children often approach this conversation by asking for information: Where are the accounts? What are the balances? Is there a power of attorney? Those are important questions, but they may not be the best place to begin.

To a parent who has managed the family finances for decades, a request for information can sound like a request for control and signal distrust. The child intends to help, but the parent may hear, "You can no longer handle this."

A better opening is to ask what the parent wants for themselves. For example, ask your parents: If you ever needed help, who would you want to be involved? What would you want that person to know? What would make it easier for someone to carry out your wishes without disrupting your life?

This reframes the conversation around preserving independence. Good planning helps a parent remain in control for as long as possible and ensures that, if help is needed, it arrives on the parent's terms.

Build a roadmap, not a balance sheet

Adult children don't necessarily need to know their parents' net worth or see every account balance. Instead, what's important is how to find the right information when the time comes.

That roadmap might identify:

• Financial institutions and insurance policies
• Debts and recurring obligations
• Trusted advisers
• The location of important records

It should also address digital access. Increasingly, the missing information is a password, an authentication device or an online account that no one else knows exists.

Imagine trying to reconstruct a parent's financial life from a hospital waiting room. That is not the moment to learn that no one knows where the original documents are stored or whom to call about an investment account.

A plan should be reviewed periodically because advisers change, accounts move and instructions become outdated. A plan that can't be found or followed isn't much of a plan.

Make sure authority matches responsibility

Information alone doesn't give someone the legal authority to act. A parent may say, "If anything happens, you know what to do," but good intentions don't grant access to an account or the legal ability to make a decision.

Powers of attorney, healthcare directives and estate documents should be addressed while parents have the capacity and time to make thoughtful choices. The rules vary by state, so families should work with qualified legal counsel.

The conversation should go beyond signing documents. Does the appointee understand the role? Is the document structured to work when needed? Do relevant family members know whom the parent selected and why?

In my experience, the "why" matters the most. For example, if one sibling is selected and another isn't, the decision can be misread as a judgment about love, trust or competence. Meanwhile, the child who is selected may not even want the responsibility or have the time or expertise to fulfill it.

Responsibilities can also be divided, or an independent professional or institution may be appropriate. The desire to treat children equally does not always require identical roles. The key is communication because, as we all know, people tend to fill unexplained differences with their own stories.

Create a succession plan for the family

Business owners understand that an organization shouldn't depend indefinitely on one person holding all the knowledge. Families should apply the same principle to their own financial lives.

In many households, one spouse manages investments, the other pays household expenses, and only one knows the advisers. That system may work for decades. The vulnerability becomes clear when the person holding that knowledge can no longer manage it.

Ask yourself a simple question: Who is the backup?

The answer doesn't require an immediate handoff. An adult child might join an annual meeting with the parents' adviser. A spouse who hasn't managed the investments might receive a plain-language overview. A trusted person might know where the roadmap is stored without having access to use it today.

As in business succession, the objective isn't to push out the current leader. It's to protect what that leader built and make an eventual transition less disruptive.

Plan for life, not only for death

Estate planning often focuses on what happens after death. Aging raises equally important questions about the years before it.

• Where would your parents want to live if maintaining their home became difficult?
• Would they prefer help at home, a move closer to family or a community with increasing levels of care?
• Who will coordinate appointments, finances and caregivers?
• What resources are available?
• How might care affect both the parents and their children?

These are not only financial questions; they also involve housing, health, time, dignity and family relationships. Money creates choices, so the conversation should begin with the life the parents want to preserve. Only then can the family determine whether the legal and financial plan supports it.

Life doesn't unfold as a neat sequence of transactions. Parents may remain independent for many years, or circumstances may change suddenly. The objective is not to predict the precise moment when help will be needed but rather create enough clarity and continuity that the family can adapt when it is.

If your parents are healthy and managing everything well, this conversation can understandably feel premature. Yet, in many ways, that is exactly the point.

In the final article of this series, I will turn to another kind of quiet planning moment: The major life events that never happen. This includes a long-term partnership without marriage, a business that never got sold, and caring for loved ones falling outside the traditional definitions of family.

Related Content

• How to Talk to Your Parents About Money Without Overstepping
• How to Talk About Touchy Subjects With Loved Ones, Before a Crisis Turns 'Ifs' Into Reality
• How to Tackle Digital Estate Planning in Four Easy Steps
• Caring for Aging Parents Takes Planning Ahead and Patience
• Come as You Are: Wealth Management for Gen X

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.

Retirees wondering where to invest their money should keep this in mind: Investments don't happen in a vacuum. Every investment has a role to play, whether that's providing short-term income or long-term growth.

This means you have plenty of questions to consider as you review the options. Not everyone will have the same questions, but some that my clients have raised recently include:

• What's happening with interest rates, and how should that affect the investing choices you make?
• Is the commodities market worth a look? Those considering making gold and silver a part of their portfolios must weigh whether to buy and, if they do, how much.

As you look for answers, the goal should be to find strategies you can use to take advantage of market upsides while limiting losses on the negative side of the ledger.

Of course, while some investments are safer than others, retirees shouldn't eliminate all risk. If they do, their portfolios could come under assault from inflation, which is a risk in itself.

If all of this sends your head spinning, don't let it. With the right plan, you can both diversify your investments and ladder them, drawing from some accounts now to live on while allowing others to grow over time.

This approach can help improve the odds of a successful retirement.

Exploring options and strategies

Let's explore some of those questions to get a feel for the approaches you should be taking.

We remain in a rising interest rate environment, with interest on debt eating into our quality of life. It might be a long time before we see deflation.

For decades, there has been a 4% rule for withdrawing money from retirement accounts. Essentially, this rule said that in the first year of retirement, you would withdraw 4% from your accounts. Then each year afterward, you would withdraw 4% plus a little more to cover inflation. The theory was that, with this approach, your money would last about 30 years.

There's a problem with this 4% rule, though. It came about in the 1990s when interest rates were declining but still higher than today, allowing a larger return on investments. Also, life expectancy has increased since then, which affects how long retirees need their money to last.

This means you may need to reconsider whether the 4% rule still works for you or whether a different plan for withdrawals from savings should come into play.

Many people wonder whether they should include commodities, such as gold and silver, in their portfolios. The short answer to that is yes, but with the usual caveat. Commodities can be a nice hedge against inflation and a way to further diversify your portfolio.

But don't go overboard, placing too much of your faith and your money in an investment that might not provide the returns other investment options produce.

Gold and silver don't pay dividends the way stocks do. And like many other investments, they come with risk. Their value can drop, which means you should be careful about allowing commodities to occupy too large a percentage of your portfolio.

Of course, that's true for many investments. Diversification remains a key to avoiding disaster when markets don't cooperate as we'd like.

Planning for the future

So, what's a good approach to making the most of your money over the course of what could be a long retirement, enjoying life now while doing all you can to make sure your money lasts another three decades or so?

Imagine investments as a group of race cars revved up and ready to explode from the starting line. You might place a bet on one of those cars and live and die with the results. But what if you didn't have to choose just one car? What if you could take a more flexible approach and own a share of each race car, benefiting from the different advantages each can provide in its own short-term or long-term lane?

In many ways, this reflects the approach our firm takes to retirement income planning. We divide a client's assets among four buckets, each with a different time horizon and purpose. Because the money is not all needed at the same time, each bucket can be positioned differently based on the client's income needs, goals and tolerance for risk.

The objective is to provide dependable income for today while allowing the assets intended for later years to remain invested for long-term growth.

The first bucket is designed to fund approximately the first five years of retirement. Because this money may be needed soon, the priority is stability and liquidity, not maximizing returns. It might include cash, money-market funds or other conservative holdings.

The second bucket is intended for the following five years. With a longer time horizon, it may include instruments such as CDs, fixed annuities or high-quality bonds that seek to provide predictable interest while limiting market exposure.

The third bucket is positioned for income needs approximately 10 to 20 years into retirement. It may include a combination of equities and a fixed index annuity, providing greater growth potential while incorporating some protection against market downturns.

The fourth bucket is the long-term growth bucket. Because these assets may not be needed for 20 years or more, they can generally accept greater market risk in pursuit of the growth needed to help offset inflation and support income later in retirement.

By matching each investment strategy to the period when the money will be needed, clients are less likely to depend on volatile investments for near-term income. The result is a retirement plan designed to balance current income, stability, flexibility and long-term growth.

Conversation with a professional

Many people planning for retirement yearn for safety and eschew risk as much as possible.

This is where they'd benefit from a conversation with a financial adviser. While there are strategies that can produce income with minimal risk, playing things too close to the vest can limit flexibility and hurt a portfolio over the long term.

An adviser can help you determine your risk tolerance, explain the consequences of being too risk averse and help you create a retirement plan that will work best for you.

Ronnie Blair contributed to this article.

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

Related Content

• The Best Inflation-Proof Investments for Your Portfolio
• The 'Ultra-Low-Risk Portfolio': A Good Choice for Wary Retirees?
• Best Conservative Investments for Retirees in Search of Simple Safety
• Longevity Is Your Greatest Asset in Retirement: If You Know How to Use It to Your Advantage
• Retirement Is Coming: This Is How to Conquer It, 'Game of Thrones' Style

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

It was a bloodbath on Wall Street Thursday, with stocks selling off sharply as market participants took profits on several of this year's biggest gainers. By the time the dust settled, the Nasdaq Composite had suffered its biggest one-day percentage drop since the April 2025 tariff tantrum. Meanwhile, the Cboe Volatility Index (VIX), also known as the market's "fear gauge," hit its highest point since March.

At the close, the tech-heavy Nasdaq was down 5.5% at 24,315 — in correction territory, or more than 10% below its most recent high of 27,599.79 from October 6. The blue-chip Dow Jones Industrial Average surrendered 3.4% to 51,523 and the broader S&P 500 plummeted 4.4% to 7,353.

All 11 S&P 500 sectors closed lower today, with technology by far the biggest decliner. Memory stocks Micron Technology (MU, -17.5%) and Sandisk (SNDK, -22.3%), which have tripled and quadrupled this year, respectively, on enthusiasm for all things artificial intelligence (AI), were two notable decliners.

And Nvidia (NVDA), a bellwether in the AI industry, slumped 9.3% — its worst day since shedding 17% in the DeepSeek crash on January 27, 2025.

Several hyperscalers who have announced massive spending on AI initiatives also fell, including Alphabet (GOOGL, -2.2%), Meta Platforms (META, -4.0%) and Microsoft (MSFT, -3.6%).

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.

Why are stocks selling off?

Concerns that Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout sparked the sell-off.

The "tech-led correction" is also being "driven by valuations that became completely disconnected from reality," says David Bahnsen, chief investment officer at The Bahnsen Group. "Thursday's market action is what happens when euphoria and hype become the reason why stocks go up, rather than fundamentals, and that's exactly what has been happening with tech stocks."

While opinions may differ across Wall Street, Bahnsen does not see today's rout as a buying opportunity, considering "valuations in the tech sector remain way too high." Instead, he advises investors to "focus on more defensive parts of the market, such as consumer staples and energy stocks. These areas may be less exciting, but they have stable cash flows, and they include companies that have a long history of growing their dividends."

Qualcomm sinks on weak outlook

Qualcomm (QCOM) was hit with a double whammy Thursday, sinking 9.5% on broad-market headwinds and a disappointing earnings outlook.

The chipmaker reported fiscal fourth-quarter earnings of $2.17 per share on revenue of $10.4 billion, both higher than Wall Street expected. But its fiscal 2027 first-quarter earnings forecast of $2.25 per share at the midpoint is below analysts' estimate of $2.27 per share.

"While we recognize QCOM's leading position in modem and single-chip integrated chipset solutions, we believe the company is over-exposed to the mobile market, with its diminishing growth and increasing competition," says Oppenheimer analyst Rick Schafer.

And while Qualcomm is diversifying its revenue streams, including by expanding into the data center market, Schafer is maintaining "a wait and see approach" — and a Perform (Hold) rating — "as efforts outside core handset take root."

AppLovin stock bucks sell-off, soars 31%

Not all AI stocks sold off today. AppLovin (APP), which operates an AI-powered mobile ad platform, jumped 31% — its best day in two years — on a well-received earnings report.

APP's third-quarter earnings of $4.30 per share were up 76% year over year, while revenue jumped 55% to $2.18 billion. The results beat analysts' estimates too.

"We previewed Q3 as the test, and AppLovin passed it," says Wedbush analyst Alicia Reese, who reiterated an Outperform (Buy) rating on APP and raised her price target to $600 from $560 — nearly 70% above current levels. And considering Q4 is "the seasonal peak" for advertisers, Reese believes "e-commerce should inflate" AppLovin's fourth-quarter results.

Related content

• 2 Sectors, 4 Stocks to Buy This November
• 30 Stocks That Could Rally 50% or More
• The Only 5 Investment Funds You Really Need

The IRS has released the 2027 standard deduction amounts you'll use for your 2027 tax return — and they're higher than ever.

The federal tax agency adjusts these amounts for each filing status every year. Since these adjustments are based on inflation, the standard deduction is higher for 2027 than in recent years.

Knowing the standard deduction for your status can help you determine whether you should plan to itemize or claim the standard deduction next year.

Here's more to know.

The standard deduction amount for 2027 (Returns normally filed in 2028)

2027 standard deduction age 65 and older 

Taxpayers age 65 and older, as well as those who are blind, can claim an additional standard deduction. For 2027, that additional amount is $1,700 ($2,100 if unmarried and not a surviving spouse).

Those eligible can add the extra standard deduction to the regular amount for their filing status. A single taxpayer 65 or older (or who is blind) can claim a total standard deduction of $18,700 on their 2027 federal tax return.

Additionally, as Kiplinger has reported, the 2025 Trump tax bill introduced a new bonus standard deduction of $6,000 for those age 65 and older.

This can be added to the 2027 standard deduction for each eligible individual and can be claimed by those who itemize.

However, the "bonus" amount is temporary and phases out for incomes above certain thresholds.

Standard deduction if you're claimed as a dependent

Your standard deduction amount might differ if you can be claimed as a dependent on another taxpayer’s federal tax return.

The 2027 standard deduction for dependents is limited to either $1,400 or the sum of $500 and the dependent's earned income, whichever is greater.

Note: The standard deduction for dependents cannot exceed the regular standard deduction for your filing status, even if your earned income is higher than the basic standard deduction amount.

What's the highest standard deduction amount possible?

Given the new senior bonus deduction, the existing extra standard deduction for those over age 65, and changes to the base standard deduction, the highest possible 2027 standard deduction amount is a whopping $48,600.

That amount is for married couples filing jointly who are both age 65 or older, qualify for the bonus deduction, and can claim the extra standard deduction for both spouses.

For more information on how to calculate your total standard deduction, see: The Extra Standard Deduction for People Age 65 and Older.

Read More

• What's the Standard Deduction for 2026?
• 3 Popular Tax Breaks Are Gone for Good
• New IRS 2027 Tax Brackets Are Set

People who own electric vehicles seem to love them. Rick Wilmer, CEO of ChargePoint, told Kiplinger that EV owners have a 90% retention rate, indicating that once they switch to an EV, they don't switch back.

With painful prices at the pump, it's no wonder buyers are making the switch. In fact, Autoblog reports that used EVs are now flying off lots faster than traditional gas vehicles. Ready to make the jump? The real challenge is narrowing down which EV best fits your lifestyle and budget.

This is where its recall history comes into play, as it can help you spot potential issues, since the last thing you want is to spend ample time doing software updates or visiting your dealership. With this in mind, here are the EVs with the most recalls.

The EVs with the most recalls

Rerev examined over 50 electric models sold in the U.S. to identify those with the most safety recalls in 2026. Using recall data from the National Highway Traffic Safety Administration (NHTSA), the report counted how many separate recalls each model had, how many cars each recall covered and how many complaints were filed.

Here are the top 10:

Understanding the most common EV recalls

Let's start with the Tesla Model Y, which leads the list with five recalls this year. The recalls haven't been too severe. One was for headlights that were too bright, and another was for a missing certification label. Many of Tesla's fixes are over-the-air updates, so pay close attention to software updates and comply as they arrive.

Meanwhile, the Lucid Air arguably had the most concerning recall: It involved a fire hazard due to faulty lighting-circuit software. It was so serious that Lucid recommended drivers park their vehicles outside until the over-the-air update applied.

Another vehicle notable for recalls is the Rivian R1S. These recalls affected everyday performance, such as a message appearing on the screen when drivers tried to view their rear cameras. There were also recalls for seat belts and front turn signals that were working improperly.

Last but certainly not least is the Hyundai Ioniq 5. It had 610 complaints filed with the NHTSA, the second-highest number of complaints behind the Tesla Model Y with 787. Why so many? Ioniq 5 owners have experienced a litany of issues, including power loss from integrated charging control unit failures and improperly tightened battery bus bars, creating a fire risk.

With these trends in mind, if you're looking to buy an EV, pay close attention to recalls, as they can be a preview of future experiences.

And if you are an EV owner, here's how to handle recalls:

• Use the NHTSA recall lookup tool by providing your car's VIN or license plate to find any outstanding recalls
• Look for over-the-air software updates and install safety patches immediately
• If you receive a recall notice, contact your dealer to schedule the free repairs
• Adhere to temporary safety precautions (such as parking outside or adjusting charging limits if advised for battery/fire risks) until the repair is completed
• Retain service documentation and verify that the recall is marked resolved in official records

Overall, EVs offer a range of benefits that make most owners want to keep them. However, like any other car, recalls are a part of ownership. Finding EV models with fewer recalls gives you the best of both worlds: Enjoying your vehicle's performance without worrying about safety issues.

Before you shop for your next car, do your financial homework. This includes determining the costs to insure your new ride. You can use this Bankrate tool to find and compare car insurance prices fast:

Related content

• How To Know If Your Car Is Recalled — And What To Do About It
• Used EV Prices Are Falling — Here's How They Compare to Gas Cars Now
• You Bought an EV and the Company Failed. Now What?

The IRS has finally released the federal income tax brackets for 2027, giving taxpayers a clearer picture of how much taxable income they can have next year before moving into a higher tax bracket.

The tax rates remain unchanged, but the income thresholds for the seven federal tax brackets have increased as part of the IRS's annual inflation adjustments.

That means some taxpayers may be able to earn more in 2027 without being pushed into a higher marginal tax bracket.

Here's a closer look at the new brackets and corresponding marginal rates.

2027 federal income tax brackets

The federal income tax brackets determine how much tax you pay on different portions of your taxable income. The tax system is progressive, meaning higher rates apply only to the portion of income that falls within each bracket.

Here are the new IRS inflation-adjusted thresholds for 2027 (returns you'll typically file in early 2028).

New 2027 Tax Brackets: Single Filers and Married Couples Filing Jointly

New 2027 Tax Brackets: Married Couples Filing Separately and Head of Household Filers

The seven federal income-tax rates remain 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The annual adjustment changes how much taxable income falls into each bracket, not the rates themselves.

Tax brackets are also marginal. If your taxable income falls into the 22% bracket, you don't pay 22% on all of your taxable income. Instead, different portions of your income are taxed at different rates.

For example, if you're a single filer in the 22% bracket, only the portion of your taxable income that falls within the 22% bracket is taxed at 22%. The income below that threshold is taxed at the lower applicable rates.

Why the 2027 tax brackets are higher

The IRS adjusts many tax provisions each year to keep pace with inflation. These annual adjustments are supposed to help prevent "bracket creep," which can occur when wages and other income rise with inflation, but taxpayers don't necessarily have more purchasing power.

Without inflation adjustments, a taxpayer whose income rises with the cost of living could eventually move into a higher tax bracket even though their real economic position hasn't improved.

Higher tax-bracket thresholds can help reduce that effect.

For example, if your income increases in 2027 at roughly the same pace as the inflation adjustment, you may be able to earn more without moving into a higher marginal tax bracket.

That doesn't necessarily mean you'll pay less in taxes. Your actual federal tax liability depends on your taxable income, filing status, deductions, credits, and other factors.

The higher thresholds generally matter most if your income is expected to increase in 2027.

• If your salary, wages, or other taxable income rise by an amount similar to the inflation adjustment, you may remain in the same marginal tax bracket.
• If your income rises substantially faster than the bracket thresholds, however, some of your additional income could fall into a higher bracket.

And of course, the new brackets can also help with tax planning.

Your taxable income determines where you fall within the federal income-tax brackets. That makes deductions, credits, and other adjustments important when estimating your 2027 tax situation.

And because the brackets are marginal, moving into a higher bracket doesn't mean all of your income suddenly gets taxed at the higher rate.

The standard deduction is also higher for 2027

The standard deduction will also increase for 2027 as part of the IRS's annual inflation adjustments. The new standard deduction will be $16,600 for single filers and married individuals filing separately, $33,200 for married couples filing jointly, and $24,950 for heads of household.

The standard deduction reduces the amount of income subject to federal income tax for taxpayers who don't itemize deductions. As with the tax brackets, the annual adjustment helps account for changes in the cost of living.

For more information, see our report: New 2027 Standard Deduction Is Here.

New tax brackets: What to do now to prepare

*These suggestions are provided solely for educational purposes.

Everyone's financial situation is different, so consult a trusted tax professional or financial planner for guidance related to your specific situation.

1. Keep the Tax Year in Mind

First, remember these are the tax brackets you'll use for 2027 tax returns, typically filed in early 2028. You'll need the 2026 brackets for the upcoming 2026 tax season.

With that in mind, the new brackets can help you start thinking about next year's tax picture and whether any planning moves make sense before this year ends

2. Estimate Your Income for Next Year

Start with an estimate of your income next year, including salary and wages, bonuses, investment income, retirement-account withdrawals, business income, and other taxable income.

Then account for deductions and other adjustments to estimate your taxable income.

Comparing that figure with the new brackets can give you a better idea of where you stand and whether you're approaching a higher marginal tax rate.

3. Consider the Timing of Income

If you can control when you recognize income, the new tax brackets may affect whether you take income this year or next year.

This may matter for business owners, investors, and others who can control the timing of certain income.

The best strategy will depend on your circumstances and the type of income involved.

4. Revisit Roth Conversions

A Roth conversion generally counts as taxable income in the year you make the conversion.

If you're considering a Roth conversion next year, the new tax brackets can help you estimate how much additional taxable income you could recognize before reaching a higher marginal rate.

For some taxpayers, spreading conversions over multiple years can help manage the amount of income taxed at higher rates.

5. Review Your Investment Gains and Losses

Long-term capital gains are taxed differently than ordinary income, but your ordinary taxable income can still affect how much of your investment income is taxed.

If you expect significant investment gains or losses, factor them into your broader tax-planning picture rather than looking at your salary alone.

6. Check Your Tax Withholding

If your income or financial situation changes next year, review your federal tax withholding.

The new brackets don't automatically mean you need to change your withholding. But a significant change in salary, bonuses, investment income, retirement withdrawals, or other taxable income could affect whether the amount withheld from your paychecks covers your eventual tax liability.

Stay tuned for more updates from Kiplinger on 2027 tax changes and what they could mean for your taxes.

Related

• 2026 Federal Income Tax Brackets and Marginal Rates
• Capital Gains Tax Rates for 2026
• How Inflation Affects Your Taxes
• Midterm Elections Deliver Split Verdict on Taxes

If you're an Amazon Prime member, your food delivery perk just changed. Amazon is replacing its Grubhub benefit with Uber Eats, giving members access to $0 delivery fees on qualifying restaurant orders.

The new benefit is available immediately to Prime members nationwide. You can now order from thousands of restaurants directly through Amazon.com or the Amazon Shopping app, without needing a separate Uber Eats account.

Prime members can also get $20 off each of their first two qualifying Uber Eats orders of $25 or more, but the introductory offer is only available for 14 days. Here's what's changing, how to take advantage of the new benefit and what to know before placing your next order.

How the new Amazon Prime Uber Eats perk works

The new Uber Eats benefit is available to all U.S. Prime members, including those with discounted Prime for Young Adults and Prime Access memberships. Members can order from hundreds of thousands of restaurants nationwide, with $0 delivery fees on qualifying orders of $25 or more.

To get started, visit Amazon.com/ubereats or open the Amazon Shopping app and search for "Uber Eats." Sign in with your existing Amazon account, browse nearby restaurants and place your order using your saved payment methods. There's no need to download another app or create an Uber Eats account.

For the first 14 days following the November 5 launch, Prime members can get $20 off each of their first two eligible orders of $25 or more, for a total of up to $40 in savings. Prime Visa cardholders can also earn 5% back on Uber Eats orders placed through December 5, 2026.

Keep in mind that $0 delivery fees don't mean your entire order is fee-free. Service fees, applicable taxes, regulatory charges and tips may still apply.

What happens to the Grubhub benefit?

Amazon first partnered with Grubhub in 2024, giving Prime members access to a free Grubhub+ membership that included $0 delivery fees on eligible restaurant orders. Now, Amazon is replacing that benefit with Uber Eats.

Amazon's commercial agreement with Grubhub ends November 5, 2026, the same day the new Uber Eats benefit launches. Prime members who previously used Grubhub+ through Amazon will need to switch to Uber Eats through Amazon to continue receiving restaurant delivery savings.

Existing Prime members don't need to create a new account or download the Uber Eats app to use the new benefit. Instead, they can order directly through Amazon's website or shopping app using their existing Prime membership.

Is the new Uber Eats perk worth using?

Amazon Prime costs $14.99 per month or $139 annually. If you're already a member, the new Uber Eats benefit gives you another way to save without paying extra for your Prime membership. The introductory offer could also save you up to $40 on your first two qualifying restaurant orders.

However, $0 delivery fees don't necessarily mean you're getting the lowest price. Service fees, taxes and tips can add to your total, and restaurant prices may be higher on delivery platforms. Before ordering, compare the final cost with ordering directly from the restaurant or picking up your food.

Related Content

• Walmart+ vs Amazon Prime: How the Shopping Memberships Stack Up
• 13 Reasons to Shop at Walmart (Even If You Hate Walmart)
• 10 Unique Ways To Save Money Shopping With Amazon
• How to Use AI to Help Your Holiday Shopping
• Is Amazon Prime Worth It?

As an incentive to save for retirement, many employers offer to match employees' retirement contributions up to a certain percent.

Now the federal government is getting on board, launching a new program called the Saver's Match.

Starting in 2027, the government will match retirement contributions up to 50% of the first $2,000 for qualified low- and moderate-income workers. Understanding how it works now can give potential participants time to figure out if they qualify and how much they might be able to realistically save once the program begins.

The program replaces the Saver's Credit, which offered a nonrefundable tax credit to lower-income earners who made eligible contributions to employer-sponsored retirement accounts, IRAs or an Achieving a Better Life Experience (ABLE) account. As a result, someone with little to no federal income tax liability could have received little to no benefit from the credit.

However, the Saver's Match is different. Under this program, the federal government deposits the contribution directly into an eligible retirement account, giving qualified workers the benefit even if they owe little to no federal income tax.

Who qualifies

To be eligible for the Saver's Match, participants must be at least 18, cannot be claimed as a dependent on another person's return and cannot be considered a student as defined by the IRS. Workers must also make contributions to their retirement plans, although no minimum amount is required. However, there are income limits.

The IRS uses your income and tax filing status to determine eligibility and the size of the match. For example, a married couple who earns up to $41,000 per year, and files jointly, could receive the full 50% match.

Partial matches will be given to qualified couples who file jointly, earning from $41,001 to $70,999 per year. If both spouses qualify and each contributes at least $2,000 to an eligible account, the couple could receive a combined $2,000 federal match.

For single filers, a full match will be given to those earning up to $20,500 and $30,750 for the head of the household. As income increases, match rates decrease.

In addition to meeting the income and eligibility requirements, workers must also make contributions to qualifying retirement accounts, such as traditional and Roth IRAs, 403(b)s, governmental 457(b) plans and other employer-sponsored accounts. Contributions must also be new, meaning trustee-to-trustee transfers or rollovers don't count.

Although the maximum match is based on $2,000 in annual contributions, workers don't have to save that amount to benefit. Even smaller contributions can qualify for a match.

For example, someone who qualifies for the 50% match can only afford to contribute $20 per month. Over 12 months, that adds up to $240. With the match program, the government will also contribute $120, bringing the total to $360 in retirement savings that year.

For workers who already receive an employer match, an additional federal match only furthers the incentive to save for retirement. Since the two incentives are separate, qualified workers can benefit from both. When calculating the Saver's Match, only the employee's contributions will be considered.

Check your budget

While the Saver's Match program offers another incentive for people to save for retirement, maximizing the benefit might not make sense for every household. Those who have little to no emergency savings, are struggling to cover bills, or have high-interest credit card debt, might need to balance these priorities with saving for retirement.

Rather than focusing on getting the full match, workers should consider how much they can realistically afford to contribute without creating another financial challenge.

Although the Saver's Match doesn't take effect until next year, workers can prepare now. Start by determining whether household income is expected to fall within the eligibility limits.

Review retirement plans offered through your employer and determine if they offer a match. If your employer doesn't offer a retirement plan, explore opening an IRA.

As you plan for the program, review your current household budget and determine how much you could realistically contribute each month starting in January.

For someone expecting to qualify for the full 50% match, saving around $167 per month adds up to slightly more than $2,000, meaning you could earn the maximum $1,000 federal match.

The bottom line

Unlike the Saver's Credit, the Saver's Match could give qualifying workers a valuable opportunity to increase retirement savings.

Taking full advantage of the program doesn't mean you have to contribute the maximum amount. The goal is to find a contribution amount that fits within your budget while continuing to work on current financial priorities.

By understanding the eligibility requirements, reviewing existing employer retirement plans and determining an affordable amount to contribute each month, workers can enter 2027 with a plan for the new program.

Related Content

• Americans Need Help Saving for Retirement: Will the New IRA Program (and a $1,000 Contribution) Be Enough?
• Your State (and Trump) Wants to Help You Save for Retirement. Here's How
• How Auto-IRA Programs and the Saver's Match Could Be Retirement Game Changers
• How Auto-IRA Programs and the Saver's Match Could Be Retirement Game Changers
• SIMPLE IRA: What It Is and How It Works

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

The 2026 midterm elections brought major political changes that will impact public policy for years to come, but voters also weighed in on a wide range of state tax proposals on the November ballot.

The results were a mixed bag.

Voters approved tax limits and property tax breaks in several states, while other local tax measures failed.

Interestingly, in an election where affordability was often cited as a top issue, voters split on new taxes on high earners proposed in California, Colorado, and Washington state to fund public services.

Here's more to know.

Midterm tax measures reflect competing priorities

For the November 3rd election, tax policy appeared on ballots in 16 states, with around 30 tax-related proposals up for a vote.

Property taxes were the most common subject, accounting for 15 measures in more than seven states. Other proposals addressed income taxes.

For example, in Iowa, voters approved a constitutional amendment requiring a two-thirds vote in both chambers of the legislature to raise individual or corporate income tax rates or establish certain new income taxes.

More than 61% of voters in Arizona approved Proposition 316, a measure capping local grocery taxes at 2% and requiring voter approval before municipalities can impose or increase them.

About 62% of North Carolina voters approved a constitutional amendment lowering the maximum income tax rate the state can impose from 7% to 3.5%.

• The change doesn't automatically reduce the state's income tax rate, which is scheduled to fall to 3.49% in 2027 under existing law.
• Voters in the Tar Heel state also approved a separate measure requiring lawmakers to limit increases in local government property tax levies.

Speaking of property tax, as Kiplinger reported, Florida voters approved Amendment 3, expanding the homestead exemption for qualifying homeowners.

As a result, the additional exemption from non-school property taxes will increase from $50,000 to $150,000 in 2027 and $250,000 in 2028. Inflation adjustments begin in 2029.

Louisiana voters faced 10 proposed constitutional amendments, five of which involved property taxes.

• Louisianans approved several changes, including authorizing local governments to provide an additional property tax exemption for qualifying homeowners age 65 and older.
• The exemption can reach $30,000 in assessed value, depending on the homeowner's age, but local governments must choose to offer it.

Voters there also approved raising the income limit for a property tax assessment freeze to $150,000 for eligible older homeowners, disabled veterans, and surviving spouses. Another new measure allows surviving spouses of disabled veterans to transfer their property tax exemption once when they move.

Note: This is just a sampling of some of the state tax measures and results from the 2026 midterms.

Meanwhile…several other high-profile tax measures raised questions about who should pay more.

Colorado Amendment 87 narrowly leads

Colorado voters considered a significant change to the state's income tax structure.

If approved, Amendment 87 would replace the state's flat 4.4% income tax with graduated rates, lowering taxes for taxpayers with taxable income below $500,000 and increasing them for those above that level.

• The new rates would range from 3.7% on the first $25,000 of taxable income to 8.4% on taxable income above $1 million.
• State officials say the additional revenue would fund K-12 education, healthcare, and early childhood care and education.

As of this writing, votes favoring Amendment 87 were narrowly ahead at 50.5%.

Washington millionaire tax stays

Washington voters favored keeping the state's new 9.9% tax on annual income above $1 million, with approximately 58% of the vote.

Initiative 645 on the November 3 ballot would have repealed the tax and prohibited the state from imposing a broad individual income tax in the future.

The new tax, approved by state lawmakers earlier this year, is scheduled to take effect in 2028. The first tax returns and payments will be due in 2029. The levy is expected to raise billions of dollars for the state.

Note: Washington has long been one of the states without a broad individual income tax. However, it already taxes certain long-term capital gains.

California billionaire tax falls short

A majority of California voters cast ballots against Proposition 40, which would have imposed a one-time 5% tax on the covered assets of residents worth more than $1 billion.

The proposal, also known as the California Billionaire Tax, was intended to raise money for healthcare and other public programs. As of this writing, the latest AP results showed that about 55% of voters opposed the measure.

Worth noting: Golden State voters approved Proposition 3 by nearly 59%, indefinitely extending the state's existing higher income tax rates for top earners to fund education, which had been scheduled to expire in 2031.

Elections 2026: What the results mean for tax policy

Democrats' historic gains could reshape tax policy at both the state and federal levels.

In states where the party gained full control of the governor's office and legislature, Democratic leaders may have more room to pursue tax policies focused on family relief, healthcare support, and funding public services.

In Congress, this year's Democratic victories will give the party control of both the House of Representatives and the Senate beginning in the new year — and a potentially stronger position to influence the federal tax debate.

That could put proposals to raise taxes on high-income households, including billionaires, possibly end Trump-era tariffs, change existing tax breaks, and expand certain tax credits back on the agenda.

However…with President Donald Trump still in the White House, any major tax legislation could face a difficult path. The two parties would have to find common ground to avoid a presidential veto.

Related

• What to Know About Florida's New Homestead Exemption
• Types of Income the IRS Doesn't Tax
• Property Tax 101: What Homeowners Need to Know

One of the greatest challenges with investing is that nobody can predict the future. This makes estimating the value of your investments far from an exact science.

After all, you have no idea what the market will do tomorrow, let alone 20 years from now. This is where rules of thumb like the 10-5-3 Rule come in handy.

The 10-5-3 Rule offers a simple way to estimate future investment returns based on how much of your portfolio is in stocks, bonds and cash.

Let's take a look at how the 10-5-3 Rule works and see whether it's reliable enough to use for your portfolio.

What is the 10-5-3 Rule?

The 10-5-3 Rule is a guideline that assumes you can expect the following average annual returns over the long term:

• 10% from stocks;
• 5% from bonds; and
• 3% from cash and cash equivalents, such as Treasury bills and money market funds.

These percentages aren't arbitrary.

According to the Wells Fargo Investment Institute, large-cap stocks returned 10.5% on an annualized basis from 1926 through 2025. Long-term Treasury bonds returned 5%, short-term T-bills 3.3%.

But it's important to distinguish between historical averages and future expectations.

"There's a big difference between what the market has averaged historically and what an investor is actually going to experience," says Wealth Guide Financial Founder Mike McCracken.

McCracken considers the 10-5-3 Rule a decent starting point if you're new to investing. For more serious planning, though, you probably need more depth.

How can you use the 10-5-3 Rule?

One practical use for the 10-5-3 Rule is to estimate a portfolio's average annual return based on its asset allocation.

Christopher Walsh, regional marketing director and financial advisor at Capital Choice Financial Group, says you can do this by multiplying the percentage of your portfolio invested in each asset class by its corresponding expected return.

For example, say you have $100,000 invested as follows:

• 60% in stocks: $60,000 earning a hypothetical 10% would generate $6,000.
• 30% in bonds: $30,000 earning 5% would generate $1,500.
• 10% in cash: $10,000 earning 3% would generate $300.

If you add those amounts, you'll get a hypothetical average annual gain of $7,800, or a 7.8% annual rate of return.

Walsh likes to pair the 10-5-3 Rule with the Rule of 72, which estimates how long it takes an investment to double. To use the Rule of 72, simply divide 72 by your average annual return.

At 7.8%, your portfolio would roughly double every nine years, assuming consistent returns and no contributions or withdrawals.

Of course, neither rule accounts for the stock market’s inevitable ups and downs, which is why they're better used as guidelines rather than planning tools.

Does the 10-5-3 Rule still apply in 2026?

You may have read that past returns do not guarantee future results. This disclaimer is included in investment disclosures for a reason, apart from federal regulations.

Indeed, it's a foundational market rule: What stocks did over the last decade may not match what they do in the next decade.

For instance, Vanguard's July 2026 capital markets forecast projects that U.S. stocks will return anywhere from 4.2% to 6.2% in the coming decade. That's a lot lower than the 10% assumption used in the 10-5-3 Rule. Vanguard also projects U.S. bonds to return 4.3% to 5.3%, U.S. cash 3% to 4%.

Walsh prefers to plan using a 7% to 9% average annual return assumption, depending on time horizon and risk tolerance.

He believes the 10-5-3 Rule is more useful for younger investors because historical averages are generally taken over a 30-year or longer time period. So "you really need a good long runway to improve your probability" of reaching these averages.

McCracken takes a more cautious view, particularly when planning for retirement.

"When I'm working with someone getting ready to retire, I'm much more interested in what happens when the market doesn't cooperate," he says. "A retirement plan needs to work in good markets, bad markets and everything in between."

He prefers to use more conservative assumptions and stress-test what happens in uncooperative markets.

What are the limitations of the 10-5-3 Rule?

The biggest limitation of the 10-5-3 Rule is that it makes the market sound more predictable than it actually is. "If only it were that simple," McCracken says.

Some years, you may earn more than the rule predicts, while other years may return less. McCracken points to 2022, when investors "with a traditional stock-and-bond portfolio learned a painful lesson."

Rising interest rates caused both stocks and bonds to tumble, resulting in the fourth-worst year for the S&P 500 since its 1957 inception, with a loss of 18%, and a 13% decline for the Bloomberg Aggregate Bond Index.

The rule also overlooks investment fees and taxes, as well as contributions or withdrawals, all of which can impact your overall return.

Another important consideration is your level of diversification. Walsh cautions that investors holding only a handful of stocks may see returns that differ substantially from historical market averages.

He recommends diversifying across companies and sectors, with exchange-traded funds (ETFs) offering one relatively inexpensive way to do so. Still, even a diversified portfolio won't eliminate market losses.

If you're retired, you should be especially careful about using the rule. A market decline early in retirement can significantly alter how long your savings last. This is known as sequence of returns risk.

As McCracken puts it, "You don't get to spend your average rate of return, you can only spend the actual returns you receive."

Should you use the 10-5-3 Rule?

The 10-5-3 Rule can have a place in your toolkit. But it's not a substitute for true financial planning.

Ultimately, your investment time horizon, risk tolerance and financial goals should determine how you structure your portfolio, especially when you're investing for major goals like retirement.

McCracken suggests asking yourself a different question: "What rate of return do you actually need to earn to make your retirement plan work?"

If you can reach your goals with a 5% rate of return, for example, there's little reason to take unnecessary risk to chase 10%.

The goal should be to reach your goal taking on only as much risk as you need and can stomach.

Related content

• The 5% Diversification Rule: Your Secret Weapon for Smarter Investing
• How to Get Started Investing When Affordability Is Such an Issue
• What the Rich Know About Investing That You Don't