Tech prices have reached new historic heights — headlined by Apple’s top-tier iPhone Duo with 2TB storage at $3,199. Instead of sinking that chunk of capital into a smartphone that begins depreciating the second you unbox it, that same budget can fund an unforgettable international adventure.

By factoring in round-trip international airfare, comfortable lodging and regional purchasing power, you can travel to five different countries on five different continents for less than the cost of the new iPhone.

See how far you can go. You might be surprised.

Data sources include TheGlobalEconomy.com, Numbeo's cost of living database and Budget Your Trip.

Colombia (South America)

• Average hotel cost per night: $45
• Average cost of daily meals: $35
• Typical round-trip flight: From LAX: $650; from JFK: $450

Affordable flights stretch your travel budget further, giving you more freedom to experience Colombia's rich culture and landscapes. You can connect different regions of your itinerary using quick domestic flights and settle into locally styled boutique stays.

Immerse yourself in the colonial charm of Cartagena's walled city, wander the lush green valleys of the Coffee Triangle, trek through the wild jungles of Tayrona National Park or experience the vibrant transformation and climate of Medellín.

Mexico (North America)

• Average hotel cost per night: $90
• Average cost of daily meals: $48
• Typical round-trip flight: From LAX: $400; from JFK: $551

With low-cost regional flights stretching your funds, Mexico easily elevates a budget into upscale territory. Your $3,199 allows you to book architecturally striking boutique hotels, savor high-end multi-course tasting menus and explore pristine beaches, jungles, and sites like Teotihuacán with private guided tours far away from the standard tour buses.

Albania (Europe)

• Average hotel cost per night: $50
• Average cost of daily meals: $30
• Typical round-trip flight: From LAX: $700; from JFK: $550

Albania remains one of Europe’s best-kept budget secrets, offering pristine Mediterranean coastlines at a fraction of the cost of neighboring Greece or Croatia. Stay along the Ionian Sea, dine on fresh seafood daily and explore the crystal-blue waters, historic castles and vibrant coastal towns that define the Albanian Riviera.

Kenya (Africa)

• Average hotel cost per night: $70
• Average cost of daily meals: $30
• Typical round-trip flight: From LAX: $1,000; from JFK: $860

While long safari trips can carry high price tags, a $3,199 budget gives you the freedom to craft a complete Kenyan journey. After flights, your remaining funds easily cover comfortable, locally run stays in Nairobi and Mombasa. They also cover game drives with expert trackers across iconic wildlife reserves, national park fees and coastal cultural experiences.

Vietnam (Asia)

• Average hotel cost per night: $55
• Average cost of daily meals: $20
• Typical round-trip flight: From LAX: $700; from JFK: $850

Vietnam delivers exceptional purchasing power. Even after accounting for long-haul airfare, travelers can abandon traditional budget restraints to stay in elegant 5-star hotels, hire private local drivers and experience fine dining.

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

This time, we hear from a 63-year-old advertising graphic designer who's working part-time in Avon Lake, Ohio. She's married and reports she was born outside Boston.

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

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

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

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

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

The Basics

How did you make your first $1 million?

I bought Apple stock in 2001. Divorced the husband who thought he was good at picking stocks, but sucked at it. The Apple stock provided me a nest egg.

I started researching, reading and listening to CNBC. I lost some money and made more.

I turned every loss into a lesson. The biggest lesson I learned was to trust my gut! Confidence goes a long way.

What are you doing with the money?

My first million is still invested. My second million, which came a lot quicker, is more for spending. I still live below my means.

This year, I bought my dream car, though. I deserve it ... a Porsche Panamera. :)

The Fun Stuff

Did you do anything to celebrate?

I cried. I was very surprised because this was never on my radar. I wiped my tears and asked myself, "How are you going to keep this?"

What is the best part of making $1 million?

I can remember crying in fear when I first got divorced, thinking I'd never have any money, that my retirement would be very difficult.

This money brings me security. I don't wake up in the middle of the night, wondering how I'm going to live.

The second part (and this is really big and unexpected) is the confidence it has given me. I'm good at money management.

Did your life change?

Yes. See my answer above about security and confidence.

Does anyone know you're a millionaire?

My wife knows because I manage her money, too. I also told my daughter because I want her to learn from me. I have her buying and selling stocks.

We're now working on the research part and what to buy and sell.

Any plans to retire early?

No. I like what I do with graphic design and want to keep doing it.

My money management is a daily job, too. I spend one to two hours a day at it.

Looking Back

Anything you would do differently?

Start earlier. I wouldn't have married the bad investor!

What advice would you give to your younger self?

My younger self would never believe I would have a million one day. I would say, START!

Did you work with a financial adviser?

Everything I have is at Charles Schwab. They have been very helpful with research and questions.

I check in with my dude at least once a year. We chat, share info and I listen.

Most of the time, I follow his suggestions.

Did anyone help you early on?

My aunt. Her husband died early. and she had to learn how to manage her money. She hated paying an adviser, so she learned how to do it on her own.

I wanted to be like her.

Looking Ahead

Plans for your next $1 million?

To make another. HA! I have everything I need. I don't need another million. No plans.

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

Start early. Even if you think you have nothing to save or invest, just start.

Knowledge! We all start at the beginning. If I can do this, anyone can. Put in the work — it will pay off.

Do you have an estate plan?

I did see a lawyer and updated my estate plans.

What do you wish you'd known …

When you first started saving? Everyone starts somewhere. Just start, no matter the amount.

When you first started investing? You will make mistakes. Just keep plugging away and learn something from every loss.

My favorite saying is "10% of $100 is $10. 10% of $10,000 is $1,000. 10% of a million is $100,000," and that is way more money than I need in a year's time.

Anything you'd like to add?

Having $2 million doesn't mean anything to me if I can't share the knowledge that got me there. My aunt shared tips with me. If she had said nothing, I'm not sure I would have known I could do this.

Sure, sharing money, paying for dinner or buying gifts is nice, but I'm teaching my daughter how to invest so she will have her own money.

Sharing the information is very important to me. I talk about it. Most people in my life know I'm an investor. And they know I will share information with them.

I tell them that investing isn't a pie that gets divided. There's money out there for everyone.

If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to MyFirstMillion@futurenet.com to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.

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• Being Rich vs Being Wealthy: What’s the Difference?
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• Can Money Buy You Happiness? Yes, It Can. However…

If there's one thing I've learned in my years advising real estate investors, it's this: The tax code doesn't care about your feelings. It does, however, reward you handsomely if you know which tools to pick up and when.

The problem is that most investors think of 1031 exchanges, Delaware statutory trusts and Qualified Opportunity Zones as one-size-fits-all solutions. They're not.

Recommending a 1031 exchange to every investor who walks through the door is like a doctor prescribing the same medication to every patient. Sure, aspirin is great, but it's not going to fix a broken leg.

So let's meet four very different investors, each facing a unique set of circumstances, and match them with the tax strategy that fits like a glove.

Henry: The stock market refugee

Henry spent 25 years building a seven-figure stock portfolio. Then came the tariff whiplash of late 2025 and the energy crisis of 2026, and Henry watched a decade of gains get rattled in a matter of weeks. He didn't just lose money — he lost sleep, his appetite and his faith in Wall Street.

Now Henry wants out. He's sitting on stock he'd like to sell, but the remaining gains still carry a hefty capital gains tax bill. And he wants something he can see and touch — something that doesn't swing 3% before breakfast.

Henry's play: A Qualified Opportunity Zone fund. When he sells his stock, those capital gains can be reinvested into a QOF within 180 days. The original gain gets deferred, and if he holds the QOZ investment for at least 10 years, any new appreciation is tax-free. The growth on his new investment owes nothing to Uncle Sam.

Better still, the One Big Beautiful Bill Act (OBBBA) has made the Opportunity Zone program permanent, introducing a rolling five-year deferral for gains invested after December 31, 2026, and a 10% basis step-up for those who hold for at least five years.

For stock market refugees like Henry who want to pivot into tangible real estate while getting a serious tax break, QOZs are the escape hatch.

One important note: Henry doesn't qualify for a 1031 exchange because he's selling stocks, not real estate. The QOZ program, unlike Section 1031, accepts capital gains from virtually any asset class: Stocks, crypto, businesses, art, you name it. That's what makes it the Swiss Army knife of capital gains strategies.

Rachel and Tom: The divorcing couple

Nobody gets married planning for a divorce, but here we are. Rachel and Tom own three rental properties together, and now they need to split everything up, ideally without handing a third of their equity to the IRS in the process.

Their situation is more common than you'd think and more treacherous than most people realize. If they simply sell all three properties and divide the cash, the capital gains taxes could be devastating: Potentially hundreds of thousands of dollars in federal and state taxes, plus depreciation recapture, gone before either party sees a dime.

Rachel and Tom's play: A 1031 exchange into Delaware statutory trusts. They sell the properties and use a qualified intermediary to execute a 1031 exchange, but instead of buying replacement properties together (which, given the circumstances, has obvious shortcomings), they each exchange into separate DST investments.

DSTs allow each of them to invest independently in institutional-grade real estate — think Class A apartment complexes or Amazon distribution centers — with minimum investments typically starting around $100,000.

Each party gets their own portfolio, their own monthly distributions and their own tax deferral. No more joint ownership. No more awkward phone calls about the leaking roof on Property No. 2.

The DST structure also eliminates the 45-day identification panic that sinks so many 1031 exchanges. Because DST properties are prepackaged and already acquired by the sponsor, Rachel and Tom can identify their replacement investments quickly, even under the emotional fog of divorce proceedings.

It's the cleanest possible split, with the least possible tax damage.

Sofia: The empire builder

Sofia is 42, owns a couple of single-family rentals and is hungry for more. She's not looking for a beach chair and a mailbox full of passive income; she's looking for a ladder. Her goal is to consolidate her smaller properties into larger, higher-performing commercial real estate and build serious generational wealth.

Sofia's play: The classic 1031 exchange, the way it was drawn up over a hundred years ago. She sells her two rental homes — let's say for a combined $800,000 — and rolls the full proceeds into a 20-unit apartment building worth $2 million, financing the balance with a mortgage. No capital gains taxes due. Every dollar of equity stays in the game.

This is the power of the 1031 exchange in its purest form: The ability to trade up without the tax drag. If Sofia had sold those two rentals and paid federal and state capital gains taxes, plus depreciation recapture, she might have lost $150,000 or more off the top.

That's not just money lost; that's leverage lost. It's the difference between a 20-unit building and a 12-unit building, between scaling an empire and treading water.

And Sofia doesn't have to stop there. Five or 10 years down the road, she can 1031 that apartment building into an even larger asset — a retail center, an industrial property, a portfolio of commercial buildings.

Each exchange defers the gains from the last one, creating a compounding effect that has made more real estate millionaires than any other provision in the tax code.

If she's strategic enough to hold her final property until death, her heirs receive a stepped-up cost basis, potentially wiping out every dollar of deferred gains along the way.

That's not just a tax strategy. That's a dynasty play.

Raymond: The high-income professional

Raymond is a plastic surgeon earning north of $800,000 a year. His tax bill is, to put it delicately, eye-watering. He wants two things: Passive income that doesn't require him to leave the operating room, and every legitimate tax deduction he can get his hands on.

Raymond's play: A combination strategy. First, he invests directly in DSTs that offer bonus depreciation. Under the newly restored 100% bonus depreciation rules, Raymond can potentially offset a significant portion of his passive income with accelerated depreciation from his DST investments — paper losses that reduce his tax bill without reducing his actual wealth.

Second, Raymond allocates a portion of his capital gains from stock sales or other investments into a Qualified Opportunity Zone fund, starting the 10-year clock toward tax-free appreciation. With the OBBBA making the OZ program permanent, Raymond has a long runway to compound gains without the drag of annual capital gains taxes.

The combination of DST depreciation benefits and QOZ tax-free growth creates a one-two punch that's hard to beat for high earners. Raymond gets monthly passive income from the DSTs, a meaningful reduction in his current tax liability and a long-term growth vehicle in the QOZ, all without ever picking up a wrench or answering a tenant's midnight phone call.

Your move

If you see yourself in any of these scenarios — or in some combination of them — the worst thing you can do is nothing. The tax code rewards action, and every day you delay is a day your money is working harder for the government than it is for you.

The best thing you can do? Find an investment adviser who understands not just one of these strategies, but all of them. Find someone who can look at your complete financial picture and recommend the right tool for the job, not just the only tool they happen to sell.

Because in the world of tax-advantaged real estate investing, the right strategy isn't the most popular one. It's the one that fits you.

Related Content

• How the Energy Crisis Is Reshaping Real Estate Investment Strategy (and Creating Opportunities Most Investors Don't See)
• When Is a 1031 Exchange Not the Right Move? A Real Estate Investing Pro Offers a Reality Check for Your Next Exit
• What a Delaware Statutory Trust Can Do for Your Kids That Your Will Can't
• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• I'm a Real Estate Investing Pro: This Is How to Use 1031 Exchanges to Scale Up Your Real Estate Empire

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.

Many parents and grandparents set up college funds for their children or grandkids. Given the cost of higher education today, starting a college fund early could help ensure they can earn a degree without the burden of overwhelming student loan debt.

But given today’s sluggish entry-level job market, funding a college education may no longer be enough to help your kids or grandkids be financially stable in young adulthood. In addition to education, you may want to create a "launch fund" — money your heirs can use to supplement their post-college paychecks or reserve for a down payment on a home.

Here’s how a couple of experts suggest approaching your launch fund, and how to balance it with your own financial needs.

Your financial security has to come first

It’s noble to want to set your kids or grandchildren up for financial success. But Tyler End, CFP, CEO, and co-founder of Retirable, says it’s important to prioritize your own financial needs and only give what you can truly afford.

"There can be a strong emotional pull to be looked at as the provider, but it is important to pay yourself first," he says. "There are no loans for retirement income like there are with college. It doesn’t help to stretch yourself and ultimately become a worry for your heirs."

Beth Stenz, CFP and financial adviser at Edward Jones, agrees.

"I would start with one important rule — secure your own retirement before funding the next generation," she says. "A young adult has decades of earning potential ahead of them."

Before earmarking significant assets for younger heirs, Stenz says, make sure your retirement savings are sufficient or on track. Also make sure you have a solid emergency fund and a plan for what she calls "potentially significant health care or long-term care costs."

Decide how much flexibility you want

Accounts like 529 plans offer tax benefits, but they’re meant for education expenses. If you end up with excess funds, you have options, but avoiding tax penalties requires strategic planning.

If you’re going to set up a launch fund, Stenz says, you may want to use different "buckets" or accounts that address different goals.

"A launch fund is ultimately about flexibility," she says. "The money may be used to supplement income during a difficult job market, fund additional education or training, help with a relocation opportunity, support the early stages of a business venture, or assist with other important milestones in young adulthood."

To that end, Stenz recommends thinking about how much money you want to earmark for education versus other young-adult expenses. You’ll also need to decide how much control you want to retain over the money, and for how long.

Account options to look at

Once you’ve narrowed down your specific goals, Stenz says, you can look at different account options.

Taxable brokerage accounts

"A grandparent-owned taxable brokerage account can be particularly attractive for a launch fund because of its flexibility," Stenz says. "The grandparent retains ownership and control, there are no education-only spending requirements, and the money can ultimately be used where it is most valuable."

If you’re going to use a taxable account, your investment allocation should reflect when you may need the money, Stenz says.

"A fund for a 2-year-old can generally accept substantially more market volatility than money intended for an 18-year-old," she explains.

529 plans

Stenz says a 529 plan is still an excellent option when creating a launch fund.

"Earnings receive favorable federal tax treatment when distributions are used for qualified expenses, and a grandparent can establish the account with the grandchild as beneficiary. I particularly like that the account owner retains control rather than simply handing the assets to the child," she says.

End says that funding college and young adulthood can be a tricky balancing act.

"The cost of education can vary greatly or be non-existent depending on the path taken," he says. "The best course of action is to decide what is most aligned with your values and give the gift that will make the biggest impact. For example, if education is important, prioritize making that accessible."

Thanks to recent rule changes, 529 plans allow the beneficiary to roll over up to $35,000 into a Roth IRA over their lifetime. That gives you the option to help a child or grandchild’s college education, save for graduate school and start a retirement nest egg if they don’t need all the money while earning degrees.

A number of parents and grandparents have "superfunded" 529 plans to support their heirs and get a nice tax break. As a result, some young adults have substantial 529 accounts that, even after a $35,000 rollover, would still leave them with more than they could spend on education. A Senate proposal would allow unlimited Roth IRA rollovers from unused 529 funds, but its fate is uncertain.

Custodial accounts

Custodial accounts are similar to brokerage accounts, only with a brokerage account, you retain control perpetually. With a custodial account, ownership eventually transfers to a child or grandchild at a certain age.

"Typically you structure them under Uniform Transfers to Minors Act or Uniform Gifts to Minors Act accounts where the ownership transfers at a set age, giving the beneficiary full control of the funds," End explains.

If you go this route, keep in mind that because a custodial account is owned by your child or grandchild, it could affect their ability to qualify for college financial aid. If you’re planning to fund their education entirely, this may not be an issue.

Trump Accounts

Trump Accounts, says Stenz, add another potential tool to the mix. You can contribute up to $5,000 per year, per child, to one of these accounts, and the money grows tax-deferred. Funds are locked until the beneficiary turns 18, when the account converts to a traditional IRA.

A Trump Account won’t help your child or grandchild cover the rent as a young adult or buy a new car. But it could give them a vital jumpstart in building retirement savings.

Share your plans so no one’s in the dark

Whether you’re saving to help a child or grandchild tackle young adulthood, End says it’s important to share your thoughts and get input from the loved ones you’re trying to help.

"Don’t hesitate to open communication with your family," he says. "You might have an idea of how to make the biggest impact, but opening the dialogue might help you learn what will make the biggest difference."

You may, for example, be inclined to prioritize 529 plan contributions. But if your teenage grandchild already knows they don’t want to go to college, your money might be better off in another account. Having open conversations could help you achieve your ultimate goal of making life easier for a child or grandchild you care deeply about.

Read More

• Use the 529 'Grandparent Loophole' to Maximize College Savings
• How to Help Your Adult Kids Without Hurting Your Retirement
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• We Retired at 70 With $4.3 Million. My Wife Won't Spend 'Our Grandkids' Inheritance,' but I Want to Travel.
• I Want to Help Pay for My Grandkids' College. Should I Make a Lump-Sum 529 Plan Contribution or Spread Funds Out Through the Years?

I live in Arizona, and during monsoon season, we know what a black cloud looks like.

You can see it building in the distance. The sky gets darker. The temperature changes. The wind starts to pick up. Even though nothing has happened yet, you worry about it.

Is it going to rain? How bad will it be? Will there be hail? High winds? A dust storm? Is it even going to hit us — or will it pass by?

The other day, the clouds were dark enough that I called my 17-year-old daughter and told her to be careful driving. There wasn't a storm at our house yet, but I knew there was enough risk that it was worth thinking ahead.

Those clouds are a good metaphor for how I look at long-term care: It's the black cloud of retirement planning.

You know the cloud is out there

Most people approaching retirement understand they might need some form of long-term care. What they don't know is what it will look like. They're likely asking themselves:

• Will I need long-term care at all?
• When will I need it?
• Will my spouse be able to take care of me?
• Will I need a little help at home or full-time care?
• Will I need help for six months or six years?
• How much might that care cost?
• What happens financially to my spouse if I'm the one who needs care?

That's a lot of uncertainty hanging over a retirement plan, which makes long-term care so uncomfortable to discuss.

• We can estimate how much income someone will need in retirement
• We can model Social Security
• We can build an investment portfolio
• We can discuss taxes and estate planning

But long-term care is different.

We don't know if or when the storm is coming, how long it will last or how severe it will be.

That's why we should plan for it.

The storm isn't just about money

When people hear "long-term care planning," they often think about the financial hit. But that's not always the biggest risk.

Long-term care can become a family issue before it becomes a financial problem.

Someone must coordinate doctors, medications, transportation and care facilities. A spouse might become the primary caregiver. Adult children might begin rearranging work schedules and family responsibilities. Families are often forced to make difficult decisions when they're already feeling stressed.

There's also the potentially substantial cost.

Imagine a married couple who have spent 30 or 40 years saving for retirement. They've built a nest egg that's meant to provide income for two people. They have travel plans. They want to help their grandchildren. Maybe they want to leave something to their children.

Then one spouse needs significant care.

Suddenly, the same pool of assets has two jobs. It must provide for the healthy spouse's retirement while simultaneously paying for the other spouse's care expenses.

That's why I believe the long-term care planning conversation should start with people, not products.

What would you want to happen?

Before discussing insurance and other options, I like the idea of asking some basic questions:

• If you needed care, where would you want to receive it?
• Would you prefer to remain at home as long as possible?
• Who would you expect to help you?
• What assets would you be comfortable spending?
• How important is preserving assets for your spouse?
• How important is leaving an inheritance?

These questions change the conversation. The plan comes first. The product comes second.

There are several ways to prepare for the storm

There isn't one long-term care strategy that will work for everyone. Generally, families have at least a few options, including:

1. Self-funding

Some people have accumulated enough wealth to comfortably pay for care from their own assets, and that's a perfectly legitimate strategy.

But self-funding should be a strategy, not an assumption. It should include modeling what happens if one spouse requires significant care for several years.

• From where would the money come?
• Which assets would be tapped?
• What happens to the surviving spouse's income?
• Does the rest of the retirement plan still work?

2. Traditional long-term care insurance

Traditional long-term care insurance allows someone to transfer a portion of the risk to an insurance company. In the right situation, it can provide significant leverage and help protect other retirement assets.

But the tradeoffs include ongoing (usually high) premiums and the possibility of premium increases, not to mention the discomfort some people have with paying for something they might never use.

3. Hybrid or asset-based strategies

Another option is a hybrid or asset-based strategy — usually a life insurance policy or annuity that includes long-term care benefits.

The money that goes into this strategy can serve multiple purposes. If long-term care is needed, those benefits are available. If it isn't needed, the death benefit or other value remains.

This can make the decision more acceptable for someone who dislikes the idea of "use it or lose it" insurance.

4. Combining strategies

Planning doesn't have to be all or nothing.

A family might choose to insure against part of the risk while retaining enough assets to cover the rest.

That's often how we handle other risks in life. We decide how much risk we're comfortable shouldering and how much we want to transfer to auto, home, health or other insurance policies.

Doing nothing is still a decision

You could decide to do nothing and figure it out as you go. That's the long-term care strategy many families have by default.

Maybe a spouse provides the care. Maybe the children step in. Maybe assets are spent down. Eventually, Medicaid might become part of the conversation for some families.

But there's an important distinction between intentionally choosing to retain a risk and ignoring it: The default plan might give you fewer choices when you need choices the most.

Plan while the sky is still clear

Having a strategy in place can help you feel more prepared and might reduce the urge to constantly watch the sky.

That's one of the primary goals of a good retirement plan: It can help provide confidence in the face of uncertainty.

Planning earlier might give you time to evaluate your financial resources, your family situation and the various ways you could handle the risk.

You don't necessarily have to purchase something. But you should have the conversation.

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

• How to Pay for Long-Term Care
• Long-Term Care Insurance: 10 Things You Should Know
• What You Need to Know About Long-Term Care Before You Need It
• A Financial Professional's Take on Long-Term Care Insurance: Buy or Not?
• If Not Long-Term Care Insurance, Then What?

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 main equity indexes slumped again on Friday, as semiconductor stocks sold off for a ninth straight trading session. Federal Reserve Chair Kevin Warsh shed only a little light on the central bank's upcoming decision on interest rates at an event in Asia. But he did heap a lot of praise on the potential upside for the broader economy from the artificial intelligence (AI) boom.

Still, CoreWeave (CRWV, -11.9%) remains a focal point, as investors, traders and speculators fixate on capex spending and whether what we're seeing instead is an AI bubble.

The VanEck Semiconductor ETF (SMH, -3.4%) extended its two-week losing streak, as Nvidia (NVDA, -1.4%) rallied into the green around noon but slumped after midday. Tech stocks, as well as AI stocks, generally dragged on the main equity indexes.

By the closing bell, the blue-chip Dow Jones Industrial Average, reversing early gains supported by rotation into energy and risk-off sectors such as consumer staples stocks, was down 0.3% to 52,002. Papa Dow held on for a 0.7% gain this week.

The broader S&P 500 slid 1.1% to 7,659, extending its weekly loss to 1.9%. And the Nasdaq Composite shed 2.1% to 26,140, as the tech-heavy index fell 4.5% from where it was last Friday.

The 2-year Treasury yield was down 3.0 basis points to 4.721%, as the short-term proxy for monetary policy traded in a wide range. Yields on the 10-year (+0.2 bps, 5.089%) and the 30-year (+0.7 bps, 5.435%) also moved up and down a lot on Friday.

'One Night in Bangkok' featuring Fed head Kevin Warsh

Warsh said little about the target range for the federal funds rate during an overnight "fireside chat" at the International Monetary Fund and World Bank Group annual meeting in Bangkok, Thailand.

While he was talking, though, equity index futures bounced to session highs, bond yields backed off a little more and the probability the Federal Open Market Committee (FOMC) will keep its policy rate unchanged at its late October meeting ticked up to 85.1% from 72.3% on Thursday.

That's according to CME FedWatch, which tracks price action in the 30-day fed funds futures market.

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"We removed a dose of accommodation about a month ago," Warsh said, referring to the 25-basis-point cut at the September Fed meeting. "I don't prejudge meetings. I don't believe in saying now what I might do at the meetings we have in the balance of the year."

Warsh also called AI "probably the most consequential change to the U.S. and the global economy in my lifetime. If you're a central banker and you're in the business of trying to ensure stable prices and full employment, you've got to recognize this as a shock."

Indeed, according to the Fed chair, AI will "fundamentally change the conduct of monetary policy."

With the official "blackout period" around its next policy decision starting tomorrow, that's the last we'll hear from the Fed until the conclusion of the next FOMC meeting on Wednesday, October 28.

Netflix needs a hit

Netflix (NFLX, -2.9%) announced its biggest layoffs since 2022 earlier this week, but naming a new chief content officer is probably a more important potential long-term catalyst for the communication services stock.

With NFLX down more than 15% year to date through Thursday, management is scheduled to report third-quarter results after the closing bell on Tuesday.

The stock has stagnated because of stale content that's left it struggling for engagement in an extremely competitive environment.

Co-CEOs Greg Peters and Ted Sarandos said in an internal memo that Netflix will be "disciplined about where we prioritize our people and resources" and focus on "high impact areas to improve our service."

For investors, that probably means a credible plan from the new management team to recapture eyeballs.

Flying car stock falls 2%

It's not the percentage part. It's the fact that the Magnificent 7 stock was down at all on the day Tesla (TSLA, -2.1%) introduced its Roadster, arguably the world's first flying car.

Say what you will about CEO Elon Musk and the grandiosity of his SpaceX (SPCX, -1.7%) project. This is the world's first flying car, people. "The Jetsons!" Right?

Well, actually, it's one thing to build a mind-blowing flying car, but another to introduce it when investors and traders, even speculators and policymakers, are focused on exploding capex and hyperscaler impact on the bond market.

Indeed, as Fed Chair Warsh acknowledged today, AI will boost central banks' ability to analyze data. It will also change the real economy, improve productivity and wealth.

At the same time, he cautioned, it's going to be a bumpy ride.

Related content

• Earnings Calendar and Analysis for Next Week
• What to Look Out for in Economic Data Next Week
• What the Midterms Mean for Your Stock Portfolio

How does an ordinary investor find a true professional financial planner when it can be like searching for a needle in a haystack?

The financial services industry includes hundreds of thousands of individuals who use titles such as financial advisor, wealth manager, financial consultant, retirement specialist or financial planner. Yet these professionals operate under very different business models, compensation structures and standards of care.

Over the years, I've developed three criteria that I believe help consumers identify a true financial planning professional:

1. Professional training and competency, often demonstrated through credentials such as the CERTIFIED FINANCIAL PLANNER™ certification.

2. A fiduciary relationship, where the advisor is legally obligated to place the client's interests ahead of their own.

3. Fee-only compensation, meaning the advisor is compensated only by the client and doesn't receive commissions or other sales-related compensation from financial product providers.

Financial advisers who are members of the Garrett Planning Network (GPN) are required to meet all three criteria. But they must also agree to one more, unique requirement.

Unlike many firms that require ongoing wealth management relationships, Garrett members must make financial advice available regardless of income, net worth or asset level. They must also offer time-based services, such as hourly planning or project-based engagements.

That may be the organization's superpower.

I spoke to Jean Keener, CFP®, founder of Keener Financial Planning in Keller, Texas and a long-time Garrett Planning Network member, to find out more.

The accessibility problem

One of the biggest challenges facing consumers today is simply gaining access to objective financial advice.

Many advisory firms establish minimum account sizes of $500,000, $1 million, $2 million or more. While those firms may provide excellent service, their business models can leave many Americans without access to professional financial planning advice.

According to Keener, when consumers attempt to seek help, they often encounter something very different from what they expected: "People maybe try to get some advice, but they end up getting a sales pitch instead.

"When people are looking for objective advice and the only solution that's available to them is a sales relationship, that's not what they're even looking for."

This distinction is important.

Consumers are often searching for advice. What they find instead is a product recommendation.

The Garrett difference

The Garrett Planning Network was built differently, Keener says: "I felt like it solved that problem of, 'how do we create a model that people can get the objective advice they're looking for without a sales pitch?'"

It allows consumers to seek professional advice without worrying whether they will meet a firm's minimum account requirements.

The practical impact of this policy cannot be overstated.

• A young physician beginning a residency
• A newly married couple saving for their first home
• A recently divorced individual
• A mid-career professional evaluating their stock options
• A retiree trying to make Social Security and Medicare decisions

All these individuals can benefit from professional financial planning advice, even if they don't have substantial investment assets.

Advice when you need it

One of the most interesting parts of my conversation with Keener involved the concept of comprehensive financial planning.

She described comprehensive planning as taking a holistic view of an individual's financial life, including investments, taxes, insurance, estate planning, retirement planning, cash flow, debt management and other financial decisions.

But she also emphasized that consumers don't always need a traditional comprehensive financial plan. Sometimes they simply need objective guidance on a specific issue.

That flexibility is particularly valuable for younger investors with modest assets. Keener said: "[A] 25-year-old doesn't need comprehensive financial planning the way our industry has defined it, but [they do] need holistic financial advice."

In other words, consumers should be able to access the advice they need today without waiting until they accumulate significant wealth.

Finding the needle in the haystack

The more financial planners I interview, the more convinced I become that true financial planning professionals represent a relatively small segment of the broader financial advice marketplace.

Many people who call themselves financial planners are primarily engaged in selling investment products, insurance products or investment management services.

By contrast, professional financial planners focus on providing advice.

That's why I continue to believe that three characteristics matter most:

• Professional training and competency
• Fiduciary responsibility
• Fee-only compensation

The Garrett Planning Network combines all three of those characteristics while also adding a fourth requirement that may be uniquely valuable to consumers: Accessibility.

Its members agree to make financial advice available regardless of a person's income, assets or net worth.

That commitment helps consumers find what can otherwise be a needle in a haystack: A professionally trained, fee-only financial planner who is willing to help them before they become wealthy.

How to find a Garrett planner

Consumers who are interested in working with a Garrett Planning Network member can begin by visiting the Garrett Planning Network's online advisor directory. The directory allows investors to search for fee-only financial planners who have agreed to the organization's membership standards, including providing advice without minimum income, asset or net-worth requirements and offering time-based planning services.

Before engaging an advisor, investors should review their credentials, regulatory filings, areas of specialization, compensation model and service offerings to determine whether they're a good fit for their personal financial situation.

The bottom line

When I asked Keener what continues to attract her to the Garrett Planning Network after nearly two decades of membership, her answer reflected the organization's mission.

She said Garrett members are committed to making objective financial advice available to a broader segment of the American public and helping consumers obtain the advice they need when they need it.

For investors searching for objective financial guidance, that commitment may be the organization's greatest strength.

In a marketplace crowded with salespeople, the Garrett Planning Network helps consumers find something increasingly rare: A professionally trained financial planner who combines fee-only compensation, fiduciary responsibility and a commitment to making financial advice accessible to everyone — not just the wealthy.

Related Content

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• 5 Do's and Don'ts for a Successful First Meeting With Your Financial Adviser
• Will a Financial Professional Always Act in Your Best Interests? 1 Question Will Tell You — and It's Not 'Are You a Fiduciary?'
• Complete Transparency and a 'Heart for Service': How Fee-Only Financial Professionals Put Clients First
• Revenue Sharing Is Great for Financial Pros — For You, Not So Much. How Can You Avoid This Sneaky Sales Incentive?

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.

Advisers spend a lot of time thinking about where their next client will come from. It's an important question. But I think there's another one worth asking: Have you earned the opportunity to manage the next dollar your existing clients invest?

For many advisory firms, organic growth is synonymous with new-client acquisition. More referrals. More prospects. More households.

Those things matter. But they're only one form of organic growth.

Consider a longtime client whose retirement accounts you manage, but whose 401(k) remains elsewhere. Or a couple where you manage one spouse's assets but not the other's. Maybe there's concentrated stock, an inheritance, assets from a former employer or money earmarked for the next generation.

Those aren't simply "held-away assets." They represent financial decisions happening in the lives of people who already trust you.

The question isn't how to capture those assets. It's whether you've earned the right to help with them.

Retention is the floor, not the ceiling

We often talk about asset management as a retention strategy. And it absolutely is.

When portfolios are thoughtfully constructed, monitored and adjusted as clients' lives change, advisers create an important foundation for long-term relationships. But simply retaining what you already manage shouldn't be the only measure of a healthy client relationship.

The strongest relationships tend to deepen over time.

A client changes jobs and needs to decide what to do with an old 401(k). A parent passes away and leaves an inheritance. A business is sold. A spouse retires. Stock compensation becomes a larger portion of the family's wealth. Parents begin thinking seriously about what they want to leave their children.

Each event creates another financial decision.

And every one presents an opportunity for the adviser to become more relevant to the client's financial life.

That doesn't happen because an adviser asks for more assets. It happens because the client has developed confidence that when the next decision arrives, their adviser is someone they want involved.

That distinction matters.

Start with curiosity, not consolidation

There's a phrase we use frequently in wealth management: "Share of wallet."

I understand why. From a business perspective, knowing how much of a client's investable wealth you manage can be an important measure of the depth of the relationship.

But I don't think advisers should approach clients thinking, "How do I get the assets they have somewhere else?"

A better question is: "Why are those assets there?"

Maybe the answer is inertia. Maybe no one has ever asked. But there could also be a perfectly good reason.

A 401(k) may offer attractive benefits. A concentrated stock position may require a careful tax strategy. Assets might be connected to a family relationship or another adviser. Or the client may simply not understand how those accounts fit with the rest of their financial picture.

The adviser's job is to understand before trying to solve. That kind of curiosity changes the conversation from an asset-gathering exercise into advice.

Instead of asking a client to move an account, you're asking whether their financial life is working together the way it should.

Sometimes the right recommendation will be to consolidate. Sometimes it won't.

Either way, you've demonstrated something valuable: Your first priority is helping the client make the right decision, not simply increasing the assets you manage.

That's how trust compounds.

Asset management can be the beginning of the conversation

For decades, investment management was often at the center of an adviser's value proposition.

Today, I increasingly see it as the foundation for a much broader conversation.

A portfolio can reveal questions about taxes. Concentrated positions can lead to conversations about risk. Required income can open broader retirement planning discussions. Appreciated assets can lead to charitable planning. An inheritance can prompt conversations about legacy planning and the next generation.

The investment portfolio isn't separate from a client's life. It's connected to nearly every important financial decision they make.

The opportunity for advisers is to use what they learn through managing assets to ask better questions.

• What has changed?
• What are we not planning for yet?
• What assets or decisions are we not discussing?
• Who else in your family should be part of this conversation?

Those questions can uncover needs that have little to do with beating a benchmark and everything to do with becoming more useful to the client.

Look beyond household count

There's another implication for advisory firms. We tend to measure growth through assets, revenue and new households. Those are all important metrics. But they don't necessarily tell you how deeply you're serving the clients you already have.

Imagine two advisers.

One adds 20 new households during the year but sees little additional growth within existing relationships.

Another adds five new households but becomes the primary adviser for more of her existing clients' financial lives. She helps with retirement assets she previously didn't manage, begins working with spouses she had rarely engaged with, develops relationships with clients' adult children and is brought into more significant financial decisions.

Which practice grew more successfully?

The answer may not be obvious from household count alone.

That's why I think advisers should pay attention not only to how many relationships they have, but to the depth of those relationships.

• Are clients consolidating more of their financial lives with you over time?
• Are you being brought into more decisions?
• Are you developing relationships with spouses and the next generation?
• When something changes in a client's life, are you one of the first calls they make?

Those can be powerful indicators of the health — and future growth potential — of an advisory business.

Earn the next dollar

None of this means advisers should stop pursuing new clients. Healthy firms need new relationships, and great client experiences should naturally generate referrals.

But client acquisition can be expensive and time-consuming. Before assuming the next stage of growth has to come entirely from people you haven't met yet, it's worth looking carefully at the relationships you've already earned.

• There may be retirement accounts you don't manage
• There may be spouses you don't know well enough
• There may be children who will someday inherit substantial wealth but don't yet view you as their adviser

And there are almost certainly financial decisions your clients haven't brought to you because they don't yet realize you can help.

The goal isn't to find a clever way to capture those assets.

It's to build the kind of relationship that makes clients want you involved.

The strongest organic growth doesn't always begin with a prospect. Sometimes it begins with a client you've served for years who faces another important financial decision and decides you're the person they trust to help make it.

So advisers should absolutely keep asking where their next client will come from.

But I'd encourage them to ask another question, too: Have I earned the right to manage the next dollar?

Because some of the most sustainable growth isn't simply acquired. It's earned.

Related Content

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• Winning Strategies for Financial Advisers as Clients' Lives Evolve
• Optimize, Grow, Retain: The Power of Annual Client Reviews

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

Each week in our Ask the 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 on deducting vehicle expenses, including the standard mileage allowance. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Standard mileage rate for Schedule C business driving

Question: I am retired but work part-time as a basketball referee. I am an independent contractor and file Schedule C. Can I claim the standard mileage allowance for driving from my home to the game site and back home?

Joy Taylor: Generally, no. The cost of business driving for self-employed individuals is a deductible business expense. However, the IRS generally considers the miles driven from your house to your first game site and the drive from your last game site back to your home as nondeductible commuting expenses. However, if you have multiple game sites in a day, you can claim the mileage traveling between game sites.

If you do take the deduction, you can claim either your actual expenses, including gas, repairs and depreciation on your car, or the IRS's standard mileage allowance. For 2026, the standard mileage rate for business driving is 72.5 cents per mile for the first half of the year and 76 cents per mile for July through December. If you use the IRS's standard mileage rate, you can also deduct the cost of any tolls or parking fees that you pay.

Be sure to keep a contemporaneous mileage log detailing each of your trips. It will make it much easier for you to figure out your total business mileage when you are preparing your tax return.

2. Employee driving

Question: I am a full-time employee and I get a W-2 each year. Sometimes, my job requires that I drive my own car between client meetings. My company doesn't reimburse me for any miles driven. Can I deduct the mileage expense on my tax return?

Joy Taylor: Unfortunately, no. Prior to 2018, employees who itemized on Schedule A were able to deduct miscellaneous itemized deductions, including their unreimbursed employee business expenses, to the extent the total amount exceeded 2% of adjusted gross income. The 2017 Tax Cuts and Jobs Act temporarily suspended these miscellaneous itemized deductions, and last year's "One Big Beautiful Bill" ended them permanently.

3. Buying a large pickup truck

Question: I bought a large pickup truck in March that I use 100% for my Schedule C business. I heard that I can expense the entire cost on my 2026 federal tax return. Is this true?

Joy Taylor: It depends. Yes, the federal tax laws allow self-employed individuals who buy a big truck that they use 100% for business to expense the full cost. However, there is a key limit to know when expensing business assets. The total amount expensed under Section 179 cannot exceed the taxable income from your business. First-year bonus depreciation doesn't have this limitation.

4. Tax breaks for business vehicles bought in 2026

Question: I am self-employed and am planning to buy a vehicle that I will use 100% in my business. Can I take a depreciation deduction for the auto?

Joy Taylor: Yes, you should be able to. There are generous tax breaks for business vehicles first put in use in 2026.

• For passenger vehicles, with first-year bonus depreciation, the first-year depreciation deduction is $20,300 for new and used cars. The second- and third-year depreciation caps are $19,800 and $11,900. After that, it is $7,160.
• For passenger vehicles for which bonus depreciation is not taken, the first-year depreciation cap is $12,300.
• For heavy SUVs, you can write off the full cost, thanks to bonus depreciation.
• For big pickup trucks, you can expense the full cost. Note that the total amount of business assets expensed can't exceed the taxable income from your business. Bonus depreciation does not have this limit.

About Ask the Editor, Tax Edition

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

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

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

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: 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

Editor's note: This is the second article in a two-part series on how advisors can help clients move from reactive decision-making to intentional retirement planning. Part one is Are Your Client's Retirement Income Withdrawals Out of Whack? How to Help Them Get the Sequence Right.

Taxes are one of the most overlooked risks in retirement planning. The goal isn't simply to reduce taxes this year — it's to manage them across your lifetime while maintaining consistent, reliable income. This is where professional advice becomes critical.

At Wealthcare Advisors (WCA), this is what we believe an advisor's process should include.

Proactive planning before RMDs kick in

The years between retirement and age 73 (when required minimum distributions (RMDs) typically begin under current law) can be a window of opportunity. During that time, strategies may include gradually repositioning assets, managing taxable income levels and exploring Roth conversion opportunities while tax brackets are more favorable.

These three strategies should be at the top of your pre-call meeting with your team before the client discussion.

Social Security claiming decisions

Deciding when to start claiming Social Security impacts more than just the client's benefit. It affects:

• Their overall income structure and cash flow
• Taxation of benefits
• Longevity of their portfolio

Coordinating Social Security claiming with the withdrawal strategy you've developed helps create a more balanced and efficient income plan.

Adjusting for legislative changes

Tax laws change — and planning opportunities change with them. Taking advantage of provisions while they're still in place can create meaningful long-term benefits.

At WCA, an initiative-taking approach allows us to adapt strategies before the rules shift, rather than reacting afterward. And as specific provisions evolve, so do WCA strategies, meaning they're always tailored to current law at the time of planning.

Coordinating income for consistency and efficiency

Rather than pulling income from a sole source, we help design a blended withdrawal approach that:

• Maintains predictable income
• Reduces unnecessary tax spikes
• Positions assets efficiently for the future

It is not just about minimizing taxes — it is about integrating taxes into the larger income plan.

The '3L framework'

As you collaborate with clients approaching retirement, you can use WCA's "3L framework" to move them from reactive decision-making to intentional planning.

Start with what they will "lean on" — guaranteed or reliable income sources, such as Social Security, pensions and structured income streams. This is where thoughtful Social Security claiming strategies and coordination with other income sources can establish stability.

From there, guide them toward what they will "live on" — their portfolio distributions. This is where sequencing withdrawals, adapting to market conditions and proactively managing taxes before RMDs take effect all come into play. Helping clients understand not just which accounts to draw from, but why and when, positions you as a strategic partner rather than a transactional advisor.

Finally, anchor the conversation around what they will "leave behind," which naturally brings tax efficiency and long-term legacy planning into focus. This is where proactive planning — such as taking advantage of current tax provisions while they remain intact and managing lifetime tax exposure — can have a meaningful impact on legacy outcomes.

By framing these decisions within the "3L" structure, you're not answering your client's questions in isolation — you're delivering a coordinated strategy.

More importantly, you are helping clients replace a "ready, shoot, aim" mindset with clarity, confidence and a disciplined process that connects every decision back to their broader retirement objectives.

From reactive decisions to intentional retirement

The biggest mistake pre-retirees make isn't lack of preparation — it's assuming the hard part is over once they've saved enough. Distribution planning is just as important as accumulation.

With your help and before they set their retirement date, take the time to collaborate closely with your clients to explain which accounts will fund their lifestyle — and why. Explain how your joint plan will adapt to changing markets, and how taxes will be managed — not just this year, but over decades.

When your client and your team approach retirement with those answers in place, everything changes. Decisions become clearer. Income becomes more predictable. Confidence replaces uncertainty.

Why? Because your client's retirement should not start with "ready, shoot, aim." It should start with a plan.

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• Old Annuities Contain Untapped Potential for Clients and Advisers: Here's Why
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Price action in the fixed-income market suggested bonds are in the process of finding a bottom, even as incoming data indicated inflation remains a problem. At the same time, during yet another difficult day for technology, the three main stock indexes rallied for modest gains on Wednesday.

By the closing bell, the blue-chip Dow Jones Industrial Average had added 1.1% to 52,177, the broad-based S&P 500 was up 0.3% at 7,744, and the tech-heavy Nasdaq Composite had rallied for a 0.08% gain to 26,713.

"As horrific as the PPI was," Louis Navellier of Navellier & Associates says, "believe it or not, Treasury yields actually declined on the perception that this may be the peak in the poor inflation news."

Indeed, the 2-year Treasury yield was down 4.5 basis points to 4.757%, while the 10-year (-9.9 bps, 5.091%) and the 30-year (-9.3 bps, 5.431%) pulled back even further.

As Navellier notes, Taiwan Semiconductor Manufacturing (TSM, -1,7%) reported 51% top-line growth and 59% bottom-line growth for its third quarter. Management also raised its full-year guidance.

Still, Nvidia (NVDA, -1.8%) was down again, as was the VanEck Semiconductor ETF (SMH, -1.0%) — the exchange-traded fund's eighth straight loss.

"A lot of market pundits think that stocks are priced for perfection," Navellier writes, "but I remain confident that when the third-quarter announcement season winds down, the S&P 500's earnings will be up at least 33%."

The Fed has 'work to do'

The Bureau of Labor Statistics (BLS) said before the opening bell that the Producer Price Index (PPI) rose by 1.3% in September, more than double a FactSet-compiled consensus forecast for 0.5% month-over-month acceleration. PPI was up to 6.3% from 5.6% compared to September 2025.

"PPI inflation was higher than expected in September as energy prices surged and food prices rose," Fifth Third Commercial Bank Chief U.S. Economist Bill Adams observes. "Core inflation exceeded forecasts, too."

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A red-hot September CPI report and today's PPI data "show no sign of inflation moving back to the Fed's target," Adams concludes, "leaving the central bank with 'more work to do,' to borrow Chair Warsh's phrase from his Jackson Hole speech in August."

Nike tops the Dow

Nike (NKE, +5.3%) is now the smallest of the Dow Jones stocks, and it's the worst performer of the 30 so far this year. But that didn't stop the sneaker company from leading the index on Thursday.

NKE was down 78.2% from an all-time closing high of $161.91 on November 5, 2021, to $35.30 at the end of regular trading on Wednesday, presenting what looks like a bargain to many investors, traders and speculators.

Indeed, the iconic athleisure brand has bounced off an intraday low of $31.97, plumbed on October 2 in the aftermath of a less-than-stellar fiscal 2027 first-quarter earnings report.

Perhaps what was once the consummate consumer discretionary stock will find its way to lists of the best value stocks to buy, perhaps not.

Wall Street remains skeptical about Nike's turnaround, with 10 analysts rating the stock a Buy, 25 calling it a Hold and seven saying it's a Sell. The average 12-month target price is $37.88, upside of 1.9% from NKE's closing price on Thursday.

Why we need to talk about CoreWeave

CoreWeave (CRWV, +5.9%), which completed one of the biggest IPOs of 2025 on the back of its AI cloud platform, has become the focal point for broad market concern about the health of the current industrial revolution.

CRWV has fallen about 64% from its June 20, 2025, all-time high, as questions about returns on the capex fueling the boom have mounted amid rising debt, spiking bond yields and growing perception of the risks of an AI bubble.

But Deutsche Bank analyst Brad Zelnick reiterated his Buy rating and his $150 12-month target price for the tech stock on Thursday and said recent price action presents an opportunity.

"A confluence of factors appear to have led to a sharp selloff in CoreWeave's public equity and debt over the past week," Zelnick writes. "There's no doubt CoreWeave's future is tied to the success of AI and demand for the underlying compute infrastructure supporting it, and thus its shares should reflect changes in sentiment here."

CRWV gapped down at Thursday's open, but rallied through the session to post a solid gain. "A strong customer base, established record of execution, backlog conversion and leading infrastructure performance is all supportive of their issuer profile relative to neocloud peers," Zelnick concludes.

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On October 19, a new rule by the Department of Transportation (DOT) will narrow the definition of what kind of flight disruptions are categorized as "air carrier delay." What sounds like a minor technicality will have a major impact on what you're entitled to as a passenger when a trip goes awry.

Your ability to get a refund for a delayed or canceled flight hinges on whether or not the flight disruption is considered to be within the airline's control.

At a time when airfare prices are soaring and your travel budget is already stretched thin, it's worth understanding how this seemingly technical change in definitions will impact your next trip. Here's how your rights are changing and what you can do to protect your investment under the new regulations.

What's changing about your right to a refund?

Technically, the new DOT rule is simply changing how certain events are categorized. Airlines are required to report their on-time performance to the Bureau of Transportation Statistics (BTS) every month. That report includes a breakdown of delays, cancellations and interruptions into a set of predefined categories.

One of those categories is called "air carrier delay" and includes all delays that the BTS considers to be within the carrier's control. The new rule removed the following 10 events from the list of delays that fall under the "air carrier delay" category:

1. Medical emergencies that weren't caused by the carrier
2. Removing an unruly passenger
3. Airport closures caused by volcanic ash, wind or wind shear
4. Unscheduled maintenance that must be addressed before flight
5. Overheated brakes when caused by the use of those brakes in an emergency
6. A government shutdown or system failure
7. Cybersecurity attacks
8. Aircraft damage
9. Aircraft cleaning due to the death of a passenger
10. Baggage or cargo loading delay when it's caused by a system outage or other factors not controlled by the carrier or its contractor

For passengers, however, it's more than just a change in definition. According to the DOT, passengers are entitled to a refund of the ticket price "if the airline significantly delays a flight or significantly changes a flight and the consumer chooses not to travel or accept travel credits, vouchers, or other forms of compensation offered by the airline."

In other words, with these 10 situations removed from the definition of what constitutes a delay caused by the airline, you now have 10 fewer situations where you're entitled to a refund or other form of compensation, including hotels and food vouchers.

That is, in fact, the intention behind the rule change. In the full text of the new rule published in the Federal Register, the DOT wrote, "it is expected that the total value of amenities and compensation currently provided by air carriers to consumers will be reduced under this final rule."

The goal with this category change is to create fewer scenarios in which you are entitled to a refund. That puts the onus on you to find other ways to protect your investment when you fly.

How passengers can protect their money when traveling

The new rule will make it harder to get a refund from airlines. But you still have some rights and other means to fill the gaps created by the changing regulations.

• Check the DOT Airline Cancellation and Delay Dashboard to find out what compensation and guarantees your airline voluntarily provides. The page provides a clear breakdown of what major airlines have agreed to provide to consumers in various scenarios. As of this writing, it was last updated in September 2025, so you should double-check with your airline to see if the information is still current. But it's a good place to start, especially when booking, as you can see which airlines might provide the most protections if a flight goes wrong.
• Buy refundable tickets. If the delay is so long that you choose not to take the flight at all, it'll be less of a headache to get a refund on a ticket that's already refundable. These typically cost a little extra, but you won't have to worry about whether the delay you experienced qualifies for a refund or not under the new rules.
• Check your credit card for trip delay coverage. This is not the same as trip cancellation protection, which only kicks in if your flight is cancelled. Trip delay coverage will reimburse you for any pre-paid expenses lost (like the missed connecting flight or the lost night at the hotel from arriving a day late) as a result of a delayed flight. It may also cover the additional costs caused by the delay, like last-minute accommodations and meals while waiting for your flight.
• Ask for a refund anyway. The "air carrier delay" category still exists, which means there are still situations in which the delay is considered to be within the airline's control. In those situations, you are still entitled to a refund. Even if you're not sure of the reported cause of the delay in the moment, it doesn't hurt to call customer service and ask for a refund just in case. Typically, if you have travel insurance through your credit card or a separate policy, you need to try to get a refund from the airline as a first step before filing a claim anyway.

Between higher ticket prices and fewer ways to get that money back if something goes wrong, protecting your trip is more important than ever. If your card doesn't offer trip delay coverage, buy travel insurance that does. This is a good way to fill in the gaps and make sure you can get your money back if your trip is interrupted or ruined for just about any reason.

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If your accountant only contacts you during tax season, you might be paying for a glorified report card, not strategy. But your professional may not be entirely to blame.

The tax preparation industry has been caught in a severe supply-and-demand squeeze. On the supply side, a talent drain is hollowing out the industry, with more than 300,000 accountants and auditors leaving the workforce in two years, according to Bureau of Labor Statistics data.

On the demand side, clients are increasingly frustrated and ready to move. A new report from financial directory Sam's List reveals that 36% of people seeking personal tax help want new professionals to replace their current provider. This urgency is driven by affluent households, with over half of those seeking a financial advisor reporting a net worth of $1 million or more.

That widening gap can leave overextended accountants concentrating on compliance and pushing strategic client conversations further down the road — often until tax season is already underway.

The problem: Tax preparers vs tax planners

Tax preparation and tax planning are distinct financial services, yet industry data show consumers often purchase basic compliance when their financial situations may require proactive planning.

"You can't expect an advisory relationship when you've only hired someone to prepare a tax return," tax strategist and enrolled agent David A. Perez told Kiplinger.

"If [the last time you spoke] was 'at my appointment in March,' nobody was looking at your tax situation while you were still making the decisions that affected your tax bill," he adds.

Perez, CEO of advisory service company Tax Maverick AI, suggests the disconnect stems from an industry business model prioritizing client volume over year-round advisory work.

"Think about the economics. When your pricing requires you to take on hundreds of clients, where does the time for deeper planning come from? At $1,000 per client, you need 300 clients to generate $300,000 in revenue — that's before expenses."

To maintain those revenue thresholds, many tax professionals work 50- to 80-hour workweeks during the traditional spring tax season, balancing expanding client rosters against smaller internal teams.

This high-volume workload correlates to a measurable drop in customer satisfaction.

• According to Sam's List, one in three taxpayers utilizing professionals are seeking a replacement.
• Among those taxpayers, 16% are unhappy with their current provider, and another 10% are seeking a more affordable option.

In addition to the CPA shortage, the friction is compounded as a new wave of buyers enters the market who may not have a clear baseline for service standards.

"For a lot of people, this is the first time they've hired anyone to help with their taxes," Kimberly Green, co-founder of Sam's List, noted in an email obtained by Kiplinger. "That's a big group starting from zero."

Who did you hire?

Most Americans first hire a tax professional at age 29, often hoping the expert will maximize their annual refund, as Kiplinger has reported. However, whether those expectations align with reality depends entirely on the specific service model you purchased.

While a tax preparer focuses on backward-looking compliance — logging what already happened — a tax planner focuses on forward-looking strategy executed before major financial decisions are made.

To distinguish between the two service models, Perez outlined three operational benchmarks that differentiate a planner from a traditional preparer:

1. Communication timing. If your tax pro last spoke to you in tax season, you are likely working with a preparer. Strategic planning requires ongoing conversations before major events occur — like taking a raise, selling stock, acquiring real estate, or launching a business.
2. Quarterly estimate methodologies. Standard preparation services often calculate your quarterly estimated tax payments based on the prior year’s bill to satisfy IRS safe-harbor rules and avoid underpayment penalties. A tax planner forecasts your current-year income trajectory and adjusts those estimated payments in real time, as circumstances change.
3. Actionable strategic deliverables. A traditional preparer reports what you owe. In contrast, a planner provides actionable recommendations, like restructuring business entities, optimizing retirement vehicle funding, or timing capital expenditures, alongside projected tax savings from those moves.

Understanding your current tax model makes it easier to decide whether to add year-round strategy to your financial plan or hire a new professional. Tax preparer fees, like those for a CPA, can range from $200 to over $2,500 for one income return. Adding tax planning on top of that can price out some taxpayers' budgets.

High earner risks (and rewards)

For households earning $250,000 to $500,000 or more — including pre-retirees and retirees — the gap between basic tax preparation and proactive tax strategy carries steep financial consequences.

Without planning, high-net-worth taxpayers may encounter costly year-end tax traps, including:

• The net investment income tax (NIIT): Crossing $200,000 in modified adjusted gross income (MAGI) as a single filer or $250,000 for married couples triggers an additional 3.8% surtax on investment income, including capital gains, dividends, and rental income. Strategically timing asset sales before year-end can keep your MAGI below those thresholds.
• The alternative minimum tax (AMT): High earnings combined with specific financial moves — like exercising incentive stock options (ISOs) or claiming a large state and local tax (SALT) deduction — can unexpectedly trigger the AMT, disallowing your standard deduction and recalculating your tax bill at a higher rate.
• Uncoordinated Roth conversions: There are several reasons to convert a traditional IRA to a Roth IRA, like achieving tax-free growth for your portfolio. But performing a conversion without modeling your overall bracket increases your current-year taxable income. This can accidentally bump you into a higher marginal federal tax bracket or trigger Medicare premium surcharges.

This risk exposure explains why higher-income taxpayers allocate significantly larger budgets to financial advisory services. Sam's List reports that two in three clients (66%) look for an accountant with a budget of $5,000 or less, while nearly one in five seekers plan to invest $20,000 or more annually.

Industry analysts estimate these larger budgets drive the need for year-round oversight, as proactive tax planners continuously evaluate income sources across multi-year horizons.

Steps to take in October and November 2026

Finding and sticking with a tax planner who meets your needs can feel daunting, particularly during the ongoing shortage of tax professionals. However, if you want to move from reactive filing to proactive tax strategy before the end of the year, there's still time to act.

"Schedule a real planning meeting now," Perez advises. "Not a quick email. Ask, 'What is my projected tax bill? What opportunities actually apply to me? What would I need to invest, and when do I need to act?'

Some actions, like updating your tax withholding or reviewing your required minimum distributions (RMDs), need to happen by December 31.

Other opportunities remain open after the year-end deadline, like making certain IRA contributions or the 4th quarter estimated tax payment for the 2026 tax year (usually due January 15 of the following year).

If you want a fresh start for 2027, establish the planning relationship at the beginning of the year — agreeing on the scope, the investment, and when you will meet long before filing season arrives. That way, when tax season finally rolls around, your return simply formalizes the work you've already done.

"Your tax return should reflect a plan you already worked on," Perez emphasizes, "Not be the first time you find out you needed one."

Read More

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I talk to a lot of 65-year-olds, and one of the biggest fears they have is making a mistake with Medicare. It's hard not to be afraid when you keep hearing well-intentioned, but conflicting advice such as:

• "You have to sign up for Medicare at 65."
• "You don't have to sign up for Medicare at 65."
• "You can change your Medicare insurance every year."

During my 20-plus years as a retirement-focused financial adviser, I've just about heard it all — some true, some false and just about all of it leaving near-65-year-olds wondering how they can figure it out in time.

Below are the five most common mistakes retirees make with Medicare and what you can do to try to avoid them.

What makes Medicare so different

Your health insurance choices used to be easy. Your work gave you two or three options and you chose the one that fit your family best.

Then you turn 64 and you get bombarded with advertisements in the mail touting how great a particular Medicare insurance plan is.

When I checked Medicare.gov's Plan Comparison Tool in September 2026, there were 81 different options near me in Wisconsin: 39 Medicare Advantage plans, 10 prescription drug plans and 32 supplement insurance (Medigap) options.

The number and types of plans available to you will depend on where you live.

With so much information and so many different plans, it's no wonder Americans keep making these five common mistakes.

Mistake No. 1: Assuming Medicare is automatic

Medicare feels automatic since many people enroll or get signed up for it at 65, but that feeling of "automatic" often turns into "I don't have to think about it" — and that's a big mistake.

Medicare enrollment generally is automatic if you've already been receiving Social Security retirement benefits for at least the four months before age 65. A few months before your 65th birthday, you'll get your Medicare card in the mail showing that you're enrolled for Part A and B.

If you have current employer-provided health insurance from a company with 20-plus employees, you may be able to delay starting Part B. Before you do, check with your employer to find out how your health coverage coordinates with Medicare.

If you're signed up for Part A and B automatically, that doesn't mean you automatically get signed up for other private Medicare insurance to pay for the gap between what Medicare covers and what Medicare pays.

You should still evaluate whether you're better off with Medicare Advantage or original Medicare with Medigap (supplemental) insurance — and you'll have to proactively sign up to get those coverages.

Mistake No. 2: Misunderstanding what counts as 'employer coverage'

Many people turning 65 think, "I don't need to sign up for Medicare. I already have insurance through my employer." It turns out they actually have retiree coverage, COBRA or even TRICARE from prior military service.

Retiree health insurance and COBRA plans are not coverage from your current employer. And TRICARE states that you need Part A and B to get TRICARE For Life.

If you have employer-provided health insurance based on your or your spouse's current employment with a company of 20-plus employees, you may be able to delay signing up for Medicare. That's true, and yet there's so much confusion around that.

Your "employer coverage" must be from active, current employment.

Retiree healthcare doesn't count as current employer coverage that could allow you to delay Part B. COBRA generally doesn't count either.

TRICARE states, "If you're eligible for both TRICARE and Medicare Part A, then in most cases, you must have Medicare Part B to keep TRICARE." (Emphasis added.)

Mistake No. 3: Confusing the different Medicare parts and choices

Medicare lists four different parts of Medicare, along with optional Medigap insurance, and points out the differences between Medicare and Medicaid. With similar names and so many parts, no wonder it's confusing.

Medicare Part A (hospital insurance) covers inpatient care in hospitals, skilled nursing facility care, hospice care and home healthcare.

Most people get Part A with no premium cost because they, or their spouse, qualified by working and paying Medicare payroll taxes for "40 quarters" — basically 10 years. Premium-free doesn't mean cost-free though. You can still have deductibles, copays and other out-of-pocket costs.

Medicare Part B (medical insurance) helps pay for doctor visits, outpatient care and preventive care, such as screenings, shots or vaccines, and yearly "wellness" visits.

Part B costs $202.90 a month, which is often a surprise to many retirees who think it's free. It can cost even more if you have a high enough income and must pay Income-Related Monthly Adjustment Amount (IRMAA) surcharges.

Medicare Part D helps cover the cost of prescription drugs.

Drug coverage is often part of a Medicare Advantage plan. But if you choose a Medicare Supplemental Insurance (Medigap) plan, you'll generally buy part D drug coverage separately, unless you have other creditable drug coverage.

Medicare Supplement Insurance (Medigap) helps you pay your share of the costs of original Medicare.

People often ask me, "What does Medicare Supplement cover?"

My answer is, "Medicare Supplement generally covers what Medicare covers, but it generally pays for many of the costs that Medicare makes you responsible for."

Medicare Part A has deductibles, coinsurance and copays that you are responsible for.

Medicare Part B has a deductible, after which you generally pay for 20% of the cost of the Medicare-approved amount for services Medicare covers.

That's where Medicare Supplement (Medigap) comes in, to help pay the costs of your healthcare that Medicare covers but doesn't fully pay. You could also choose a different route, called Medicare Advantage.

Medicare Advantage (also known as Part C) is an alternative to original Medicare. You get a "bundled" plan through a private insurance company that is Medicare approved and essentially brings your Part A, Part B and usually Part D coverages all together.

Many Medicare Advantage plans have low or even $0 monthly plan premiums, while Medigap policies generally charge a separate monthly premium.

However, those on Medicare Advantage generally must continue paying their Part B premium, along with deductibles, copayments and specific provider networks.

Mistake No. 4: Ignoring the potential extra costs of Medicare through IRMAA

Many people are surprised that Medicare Part B has a monthly premium. They expect the taxes they paid throughout their career to cover their Medicare in retirement.

What's even more surprising is when your income from two years ago causes you to pay extra for Medicare through the IRMAA.

I met a client recently who was upset that his Medicare premiums were higher this year than last year.

I discovered he had retired two years ago. His income from that year was high enough to go over the IRMAA threshold so that both his and his wife's Medicare premium was roughly double the normal amount.

Fortunately, you can appeal your extra Medicare costs through IRMAA, and "work stoppage" is one of the "life-changing" events Social Security will take into account.

My client had retired, and his income is now lower. So after the couple requested a new IRMAA determination based on his retirement and their reduced income, their combined Medicare premiums were reduced by roughly $5,000 for that year.

This client's IRMAA surcharge highlights how interconnected all the pieces of retirement are. Your added income in one year, from working or perhaps Roth conversions or stock sales, can affect your healthcare costs two years later.

Retirement isn't just about your Medicare decision and your investment decision, and your Social Security decision separately. It's about how each of these areas affect each other.

That's why I created a five-step retirement master plan to help all the pieces of retirement fit together, which you can find in my book Retire Today.

Mistake No. 5: Not re-evaluating your Medicare Advantage or drug plan each year

Each year during open enrollment from October 15 through December 7, I send a message to my clients encouraging them to review their Medicare Advantage or prescription drug plan for the following year.

By far, the most common response is, "Nothing changed for me this year, so I don't need to do this."

But here's the thing: Something may have easily changed. Your existing plan could have changed quite a bit.

Every year, your Medicare Advantage or Part D drug plan can change its cost, its network, its preferred pharmacy, its benefits, its provider list.

And even if your plan doesn't change one thing, all the other plans could change and you might be missing out on a better plan for you.

You may find another plan that better fits your healthcare needs, or your prescription drugs, providers and budget.

Whether you're on Medicare already, or getting ready for Medicare, follow these five steps to avoid big Medicare mistakes:

• File for Medicare at the right time
• Confirm how your current health insurance coordinates with Medicare
• Learn the different parts of Medicare and what they cover
• Understand how past income affects current Medicare costs — and whether you qualify for a reduction in those costs
• Re-evaluate your Medicare Advantage and drug plan options each year

Take these five steps before, and even after, you file for Medicare, and you'll feel much more confident in the Medicare decisions you make.

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

You probably know that money is taken out of your paycheck to help fund the Social Security program. But did you know there's a limit on how much of your income is subject to the tax? That threshold is rising in 2027, which means higher-paid workers could see more money withheld from their paychecks next year.

The Social Security Administration (SSA) just announced a new wage base for 2027 (roughly 4.2% higher than the 2026 tax limit), along with the annual cost-of-living adjustment (COLA) for more than 70 million Social Security recipients.

The new 3.6% COLA will boost monthly checks for beneficiaries, while the wage base determines how much of a worker's income is subject to Social Security payroll taxes.

Also worth noting: These updated numbers come as some lawmakers weigh proposals to shore up Social Security — including whether to eliminate the Social Security tax cap. Here's more to know.

New 2027 Social Security payroll tax limit

Every year, the SSA sets a limit on how much of your earnings can be taxed for Social Security. Any money you earn above this limit — also called the tax cap or wage base — isn't taxed and doesn't count toward your future retirement benefits. This limit usually goes up each year based on average wage changes across the country.

For 2027, the tax limit is $192,300, up about 4.23% from $184,500 for 2026.

High Earners: If you're at or above the taxable limit, you will pay the 6.2% tax on more of your income.

• The maximum tax an employee will pay in 2027 is $11,922.60, up from $11,439 for 2026.
• The taxable wage base is increasing by $7,800.
• So, an employee earning at least $192,300 will pay an additional $483.60 in Social Security taxes in 2027 (i.e., 6.2% of $7,800).

Other Workers: If your income is below the taxable limit, all of your income is already subject to Social Security tax.

Note: The wage base also matters for future benefits. Social Security uses a worker's earnings history to calculate retirement benefits, generally based on the highest 35 years of indexed earnings. Earnings above the annual cap don't count toward that calculation.

How much Social Security is taken from a paycheck

Employees pay 6.2% of covered wages toward Social Security, and employers pay another 6.2%. The combined rate is 12.4%. Self-employed workers generally pay both portions, for a combined rate of 12.4% on net earnings up to the annual wage base.

Self-employed individuals can generally deduct the employer-equivalent portion of their self-employment tax when calculating adjusted gross income (AGI).

It's also important to distinguish Social Security taxes from Medicare taxes.

• Medicare payroll taxes don't have the same wage cap.
• Employees generally pay 1.45% in Medicare taxes on all covered wages, and employers pay another 1.45%.
• Higher-income workers may also owe an additional 0.9% Medicare tax on wages above $200,000 for single filers and $250,000 for married couples filing jointly.
• Those thresholds are separate from the Social Security wage base.

Will the Social Security tax cap be eliminated soon?

As Kipliner has reported, Sens. Elizabeth Warren, D-Mass., and Bernie Moreno, R-Ohio, are calling for the elimination of the Social Security payroll tax cap. The proposal would require people with higher wages to pay Social Security taxes on more of what they earn.

If the tax cap were eliminated and assuming the 2026 limit, a worker earning $1 million, for example, would have another $815,500 of wages subject to the Social Security tax.

At the current 6.2% payroll tax rate, that would be about $50,561 more in Social Security taxes for the employee. The employer would generally owe another $50,561.

Warren and Moreno say the additional revenue could help protect Social Security benefits without raising the payroll tax rate for most workers (i.e., those whose wages remain below the taxable maximum).

But changing the Social Security tax cap would be more complicated than simply asking high earners to pay more taxes. Key questions Congress would have to address include how to change the cap and whether additional taxes would increase Social Security benefits for high earners.

• As mentioned, Social Security benefits are based in part on a worker's earnings history, and under current law, earnings above the existing cap don't count toward benefit calculations.
• Ultimately, the financial effect of eliminating the cap would depend partly on whether and how those additional earnings would be credited toward benefits.

For now, there's no major legislative change involving the tax limit, except for the just-announced annual adjustment.

Still, the debate surrounding Social Security taxes comes as the Social Security program faces a long-term funding shortfall. According to the 2026 Social Security Trustees Report, the retirement and survivors trust fund is projected to be depleted in late 2032 if Congress doesn't act.

At that point, continuing revenue would pay 78% of scheduled benefits. That could mean a 22% cut in benefits across the board. Stay tuned.

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We retired last year at 65 with $1.1 million, and our $6K monthly Social Security covers most of our expenses. I want to spend $80K on a pool so it's more fun for the grandkids to visit. My husband says it's a waste and we can't afford it. Who's right?

When you have grandchildren, your mindset tends to shift. Things you never would’ve spent money on for yourself, or even your own kids, are suddenly purchases you’re willing to seriously contemplate.

Here, we have the example of a couple who can’t agree on whether a pool is a sound investment. With $1.1 million saved and an estimated cost of $80,000, a pool would eat up a little under 7.5% of their portfolio.

Is that too much to spend? Let’s see what our experts have to say.

The actual math probably works

Spending your entire retirement nest egg on a pool probably isn’t wise. Spending a portion of it is a different story.

Derilyn Freeman, a financial planner with Prudential Wealth Advisors, says, "If you were my client, I would tell you the question at hand is: 'Can you buy an $80,000 pool without it negatively affecting your retirement plans?'"

If the answer is "yes," then that answers the math problem.

Since our couple covers most of their expenses with Social Security, they’re probably withdrawing minimally from their savings. So the question is, what sort of pressure does the pool place on their nest egg going forward?

"Let’s assume you withdraw the $80,000 for the pool, so now you have $1,020,000 left," says Freeman. "Let’s also assume you need an additional $1,500 per month for maintenance. That’s $18,000 per year, or about 2% that you’re withdrawing from your $1,020,000 in savings annually."

Freeman says high-yield savings accounts and CDs are paying 3% or more these days, which means even if all of your money was in savings and/or CDs, you could still see your account grow annually after withdrawing $18,000 for pool maintenance (assuming taxes and inflation don't outpace your conservative yields). And while these rates probably won’t stick around forever, you can shift into other stable assets, like bonds, that could offer comparable returns.

"This tells me that you can afford a pool for $80,000 without it negatively impacting your retirement," she says.

To argue that case even more, pool rental marketplace Swimply puts the average annual cost of owning a pool at $3,000 to $6,000. If you’ll be outsourcing everything, you might need to estimate at the higher end of that range. But that’s well below Freeman’s much higher number, which may be more relevant to upscale pools.

So clearly, the math works. But another issue may be whether your husband can part with the money mentally.

"You and your husband are not alone in struggling to spend for enjoyment in retirement," Freeman says.

Prudential just released a survey on retiree spending confidence, and it found that most respondents feel guilty spending their savings on things they enjoy. Your husband’s pushback may stem more from fear or guilt than from worries about the math.

It's also possible that your husband just doesn't want a pool as much as you do. If so, you'll need to find ways to compromise. For example, you could opt for a cheaper above-ground pool that, with a custom deck, can be attractive. If your grandchildren are older and you live in a colder climate, they may be just as happy with an outdoor hot tub for winter chats and cold plunges in the summer.

Is a pool the best way to spend your "fun bucket" savings?

With the math problem out of the way, Freeman says the next thing to focus on is whether a swimming pool aligns with your values and priorities.

"Think of your savings as a tool that you can use to build a life that reflects what matters most to both you and your husband," she says. "To me, this purchase reflects a priority on spending quality time with family and creating fun for the grandkids."

In other words, is a pool the best use of money you've set aside for family fun and bonding?

Freeman says, "There are other ways you could prioritize quality time with your grandkids, too, that do not include purchasing a pool."

If maintaining a pool, or making sure young children don't fall in it, feels overwhelming, you could put some of that money toward more flexible uses. For example, you could fund annual family vacations or cruises, stays at upscale national park lodges, or even an RV so you can visit the grandkids.

Also, just because you can afford pool maintenance doesn’t mean you want to deal with it. And you should also know that, from a resale-value standpoint, a pool isn't necessarily a smart investment. You'll need to weigh additional swimming pool issues such as higher home insurance costs, safety fencing and energy bills for heated pools.

As Steve Azoury, a Chartered Financial Consultant and owner of Azoury Financial, explains, "The $80,000 pool cost could be a good investment if it adds value to your home. However, sometimes pools in certain areas make homes harder to sell and can actually decrease a home’s value."

Geography could play a role in your decision. If you live in an area where you can use a pool year-round, it could be a smart purchase. But if you’re in a part of the country where the swimming season is only three months long, a pool may not be worth it. And it won’t solve the problem of what to do with your grandkids for the majority of the year when they visit.

That’s why Azoury, like Freeman, says you should think about what you really want. If the goal is to get your grandkids to come over more often, you can find other activities to entertain them that could do the job at a fraction of the cost, without forcing you to maintain a feature you don’t otherwise use much.

But if you both decide a swimming pool is the backdrop you want for your family’s memories, go for it. You’ve earned it.

Read More

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• In-Ground vs. Above-Ground Pools: Which Is the Best Investment?
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Bonds are suffering a rough spell, but this is not 2022, when fixed-income investments disgorged more than 10%. Even after several losing weeks, and despite palpable pessimism about whether the Federal Reserve and U.S. Treasury have answers to the darkening inflation picture, the Bloomberg U.S. Aggregate Bond Index is off less than 1% for the year through August.

Uncle Sam is now paying its highest interest rates on long-term debt in roughly 20 years, but the trading action in Treasuries is more drip-drip-drip than a rush to the exits. When bond opportunities arise, there are buyers. Alphabet (GOOGL) set off a stampede when it issued new debt at 4.875% for five years and 5.45% for 10.

However, medium-term and long-term fixed-rate investments have massive competition. Cash and ultra-short bonds pay 4%. Then come the newfangled and alternative ways to collect 5% and up: funds of variable-rate loans, options-driven income exchange-traded funds, high-rate credit and more.

Back in the day, those were unknown, inaccessible to small investors or cost a fortune in fees and commissions. Now, says Bill Merz, the head of capital markets research for U.S. Bank, alternatives and floaters are serious rivals to traditional bond markets and a factor in forcing yields higher, alongside inflation, the Treasury's mounting debt and a lack of confidence in the government's plans and performance.

Bond owners have three motivations: income, diversification and capital preservation. As higher rates gnaw away at principal, it is sensible to review how best to serve each of these aims. I don't advocate a total portfolio teardown. Municipals are in the green in 2026 and are keepers if your tax situation makes the numbers work.

High-yield bonds continue to outperform investment-grade corporate and government debt. But when you can get 4% with no risk, or much more with only a little risk, it pays to look around.

Where to find income

The Fed raised short-term rates in September and is likely to raise again by the end of the year. This means variable-rate credit tied to the Fed will churn out more cash.

Funds including Fidelity Floating Rate Income (FFRHX), Janus Henderson AAA CLO ETF (JAAA) or PGIM AAA CLO (PAAA), and WisdomTree Floating Rate Treasury Fund (USFR) are outpaying and outgaining most bond funds, with high yields and year-to-date total returns of 4% and above — and that is before any rate hikes.

Use options-powered ETFs to diversify your portfolio

Unlike past economic cycles, long-term bonds and stocks are moving in the same direction. So, for insurance against a stock market correction or prolonged bond rout, it is logical to pursue high cash distributions that can offset price declines.

This explains the appeal and success of options-powered ETFs, such as Calamos US Equity Autocallable Income (CAIE) and two from Global X: NASDAQ 100 Covered Call (QYLD) and S&P 500 Covered Call (XYLD).

I would ignore the flaw that the options limit the growth from rising share prices and instead consider these to be high-yield income sources, not part of a stock allocation. I grant that these are complex. But they are paying out roughly 10% and more, and without interruption.

The best way to preserve capital

The surest way to guarantee that your savings stay intact is to lock them away. As the Fed tightens, money market funds and short-term certificates of deposit (CDs) will pay 0.25 or 0.50 percentage point more.

And inflation is not so high that cash is trash. Or, with individual bonds, as opposed to funds, you can hold to maturity and ignore fluctuating bond indexes.

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

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AI became a larger part of our ordinary lives quickly.

We already had AI assistants like Amazon's Alexa and Apple's Siri. And in March, Amazon added a health assistant to its website that can read your medical records and book your appointments.

In May, Schwab gave retail clients a tool that summarizes why their portfolio moved. The technology turns up in the search bar and the banking app whether you asked for it or not. Schwab includes a disclaimer on their AI tool saying the output, "should not be construed as investment advice or recommendations and are for informational and educational purposes only."

A general-purpose chatbot like ChatGPT or Claude includes no such disclaimer when someone asks whether to pull $60,000 out of an IRA for a new roof and to replace windows.

Yet, people keep asking. A July J.D. Power survey found that 40% of respondents had sought help from AI to manage their personal finances. In the same survey, 34% said AI helps them make smarter financial decisions, 1 percentage point behind the 35% who said that about their own bank.

A chatbot answers in the same confident tone whether it has the facts or not, and it doesn't flag what might be left out.

The chatbot doesn't know:

• Your marginal tax bracket
• Whether the money sits in a traditional IRA, a Roth or a taxable account with a low cost basis
• How your state treats the distribution
• That a two-year lookback on your income sets your Medicare premium
• That your income will drop in 18 months when you move to part time
• If you have carryforward losses to utilize

None of those details, which can sway the answer completely, enter the conversation unless you introduce them. The chatbot answers the question that is asked, not necessarily the ones that are exclusive to your situation.

Sixty thousand dollars out of a traditional IRA arrives as ordinary income, and if the rest of your income already sits near a tax line, that money can push the total past an IRMAA threshold that resurfaces as a higher Medicare premium two years later.

The same $60,000 from a taxable account with a high cost basis might barely register on your tax return.

None of those details require the chatbot to be wrong. It's answering a loaded question for the general reader without the specificity and complexity of your personal situation.

Where AI helps

AI makes a good study partner and can prepare you for more productive meetings with your adviser.

For example, researching and learning about qualified charitable deductions (QCDs) at home saves time that doesn't have to be spent on explanations.

Other ways it can help include:

Translating documents. Paste in the section of your summary plan description that governs in-service withdrawals or the paragraph of an annuity contract that lays out the surrender schedule, and ask the chatbot to explain it in plain language. Those documents get written for compliance review rather than for you, the reader. Delegate the explanation to the chatbot.

Build a question list before the meeting. Provide the chatbot with three sentences about your situation and request questions you should ask your adviser. This will create an agenda for an efficient and productive meeting.

Argue the other side. Ask it to make the strongest case against a recommendation you've already received, including mine. The objections it raises are worth bringing to the person who made the recommendation.

Ask it what it does not know. Some version of "what would you need to know about my situation to answer this well?" returns insightful questions to consider.

One note to keep in mind. Account numbers, Social Security numbers and full statements don't belong in a general-purpose chatbot. Round numbers and account types give the tool everything it needs to be useful.

What's next

Forty percent of consumers have already taken a money question to AI, and that number is likely rising. There are smart ways to use these tools. Moving money on an answer that never had your full picture is not one of them.

The tools will keep improving, and more people will walk into meetings with better questions because of them.

Take the response for what it is, which is a starting point. Reading it against your own numbers is where we come in.

Related Content

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• If AI Is Doing More of the Work, What Are You Paying Your Financial Adviser For?
• More of Us Are Using AI for Financial Advice: Here's Where I'd Draw the Line
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Positioning your portfolio with the outcome of electoral politics in mind is a bad idea. So if you're planning on messing with your allocations ahead of November's midterm elections, you might want to think again.

For more than two decades, Barry Ritholtz, co-founder of Ritholtz Wealth Management, has urged folks to keep politics out of their investing process. His latest book, How Not to Invest, even has a chapter titled "Why Politics and Investing Don't Mix." Ritholtz stresses that politics is fundamentally emotional, while "investing is done best when it's logical and rational."

Besides, predictions about which sectors are set to outperform or lag are too often just plain wrong. Recall that ahead of President Donald Trump's first term, investors were advised to load up on Big Oil and small-cap stocks (wrong and wrong) and avoid Big Tech and renewable energy names (wrong and wrong, again).

Most importantly, stocks tend to do quite well at this point in the cycle, notes Jeffrey Buchbinder, chief equity strategist at LPL Financial.

"One of the strongest 12-month seasonal periods of the four-year presidential cycle for stocks is fast approaching," he writes. "The year following midterm elections has generated the strongest average annual S&P 500 return at 17.2%, significantly above returns during first-year, election-year and midterm-year periods."

And how. The S&P 500 has risen during the 12 months following midterm elections 18 straight times dating back to 1954, according to LPL.

"History suggests investors may be better served focusing on market behavior rather than political predictions," Buchbinder adds.

Ryan Detrick, chief market strategist at Carson Group, wholeheartedly concurs, noting that the best part of the four-year presidential cycle is now.

"The fourth quarter of a midterm year is historically the best quarter of the year, up more than 80% of the time and up 4.2% on average, twice the next best quarter," Detrick says.

Why gridlock could be good for equities

True, Democrats could flip the House of Representatives, but Detrick notes that gridlock can be good. A divided Congress is often positive for the stock market. After all, the status quo can be preferable to the uncertainty of sweeping legislative changes.

Even if you do want to handicap the election outcome, the polls suggest the market could be poised for a period of outperformance, says Monica Guerra, head of policy and geopolitical strategy at Morgan Stanley Wealth Management.

"Under a Republican president and split Congress, the S&P 500 has historically gained about 23% in the post-midterm year, compared with 12% across all midterm outcomes," she writes.

Who holds power in Washington, D.C., matters, of course, but not nearly as much as the outlook for corporate earnings, interest rates and the macroeconomic environment, experts say.

"Regarding political party control of Congress, other issues matter more to the market's medium- and long-term performance, including Fed policy and innovation," writes Kelly Bogdanova, portfolio analyst at RBC Wealth Management. "Despite the increasing likelihood that party control could shift partially or fully in the next Congress, RBC Capital Markets equity analysts see little overall impact on S&P 500 sectors."

How investors should prepare

The bottom line: Since 1945, U.S. stocks have climbed under both parties and across nearly every configuration of the legislative and executive branches, says Anthony Saglimbene, chief market strategist at Ameriprise Financial.

"Through it all, the long-term direction of the stock market has generally been higher," he writes. "Midterm election results have typically had a limited impact on the long-term performance of the broader market."

No matter which party is in control, staying focused on a long-term plan and maintaining a well-diversified portfolio has generally been the best approach, Saglimbene adds.

To reiterate the point, we'll give the last word to Michael Townsend, managing director of legislative and regulatory affairs at Charles Schwab.

"Given the political atmosphere in the United States right now, the 2026 midterm elections are likely to be particularly emotional," he says. "Investors should remember to keep those emotions in check when making investment decisions."

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With growing excitement around IPOs such as SpaceX and ongoing speculation about others, many investors are asking the same question: How can I get in on the action?

While chasing the newest investment opportunity might be tempting, building wealth rarely happens through one hot IPO, a trending stock or the latest market craze.

The most successful investors rarely get caught up in hype. They follow a disciplined process rather than searching for shortcuts.

The danger of chasing the hot, new investment

When investors hop on a highly anticipated company, early enthusiasm can push prices far beyond what the business is actually worth.

This can create that fear-of-missing-out (FOMO) feeling, as investors get in early and make money while others eagerly wait their turn.

But chasing hype can be risky. What looks like a quick win can just as quickly turn into a painful lesson once the initial excitement fades and the investment's true value becomes clearer.

A good example is Rivian. Many investors believed they were buying when the hype had settled, but even purchases that appeared to be on the dip resulted in significant losses as valuations continued to fall.

It often takes months or even years for the market to determine a company's true value.

Consistency is the name of the investing game

There's nothing wrong with wanting a piece of the pie when it comes to investing. The problem is when investors begin to view some of these opportunities as shortcuts to wealth.

Everyone is looking for the next big winner that will magically get them to retirement faster, but contrary to popular belief, wealth building isn't complicated.

I like to compare it with a new fad diet promising dramatic results. The people who are successful in losing weight or maintaining good health typically follow the same principles: Eat well, exercise consistently and stick to a routine.

The same is true about investing. Just as you can't junk-food your way to good health, you can't junk-invest your way to a secure retirement.

The three keys to long-term retirement success

Investors who build meaningful wealth focus on three things:

Consistent contributions. The most reliable way to build wealth is not by trying to guess which shiny new idea will take off next, but to consistently invest over time. Regular contributions allow investors to benefit from market ups and downs. Dollar-cost averaging removes the pressure of trying to time the market. They keep investing regardless of what the headlines say.

Time in the market. Successful investors give their money time to grow. Compound interest is one of the most powerful tools in investing, but it requires patience. Wealth accumulation can feel slow at first, but it accelerates over time. The earlier you start, the greater the potential payout.

Risk management. For your money to grow, it requires a certain level of exposure to growth assets. While market volatility can be tough to stomach at times, avoiding risk entirely can make it difficult to achieve the returns needed to meet long-term goals. Investors should take on as much risk as they can reasonably tolerate.

A good retirement strategy is not about hitting home runs. It's about creating a system that works over years and decades. That means saving consistently, staying invested and choosing the right mix of investments that fits your risk tolerance and time horizon.

When to dial back risk

Risk is largely based on your time horizon, or how far you are from retirement. If you're early in your career, your focus should remain largely growth-oriented. Major market swings have less of an impact when time is on your side.

If you're about 10 years from retirement, you should start taking a closer look at your future spending, retirement income needs and overall strategy.

If you're about five years from retirement, begin balancing growth opportunities with greater protection of the assets you've worked to accumulate.

This is the stage in life that we specialize in at Blue Ridge Wealth Planners. We help clients optimize their retirement by implementing strategies to help preserve their assets and generate lifelong income. The goal shifts from building wealth to preserving and distributing it effectively.

That doesn't mean abandoning growth entirely. It means making sure your portfolio aligns with your timeline and goals.

How to handle 'hot' investment opportunities

How should investors respond when a hot new opportunity dominates the headlines?

Ask yourself:

• Does this investment fit my overall plan?
• Am I investing because of the company's fundamentals or because everyone is talking about it?
• What happens if this investment loses significant value?

Start by reminding yourself what has always been true. Exciting investments will come and go. Some will succeed and some won't. Predicting which is which is often much harder than it appears.

If you're interested in a particular company or industry, there might be other ways to gain exposure through diversified investments, such as ETFs, rather than relying on a single company to carry your entire portfolio.

In the end: Trust the process

Don't let the pursuit of a shortcut distract you from the process that works. Building wealth is rarely exciting. It usually consists of saving consistently, investing wisely, managing risk appropriately and staying committed regardless of market conditions.

You don't need to find the next SpaceX to reach your financial goals. Trust the process and remain disciplined long enough for it to work.

Blue Ridge Wealth Planners is an investment adviser registered with the Securities and Exchange Commission. SEC registration is not an endorsement by the SEC nor does it imply a certain level of skill or training.

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

If you want guaranteed returns on some of your cash, it's hard not to consider a certificate of deposit. Some of the best CD rates offer higher APYs than high-yield savings or money market accounts.

This is essential, too, as persistent inflation and the possibility of future Federal Reserve interest rate hikes create an uncertain economic climate. Right now, savers must balance maximizing immediate growth and remaining flexible enough to adapt if economic conditions shift.

With that in mind, here are three CDs I recommend using right now, as someone who monitors CD rates on a weekly basis.

Short-term CDs maximize growth with flexibility

A short-term CD of three months to a year is a smart move given the current economic climate. Why? Because you'll likely earn a guaranteed rate of return that outpaces inflation.

You'll also have access to your cash within the year. If prices continuously rise, you can pivot to other options that protect your purchasing power. Also, if the Federal Reserve hikes rates again, you might earn even more on your next CD.

You can use this Bankrate tool to compare short-term options quickly.

While this option works well for most savers, if you want to move a significant portion of cash (think at least $50,000) into a CD, here's another smart option.

A short maturity for larger sums

For large deposits ($50,000+), I recommend a jumbo CD. They offer some of the highest returns compared to other savings accounts, with maturity windows between six months and one year.

CreditOne Bank offers a 12-month jumbo CD at 4.60% APY with a $100,000 minimum deposit. If you deposit $100,000, you'll earn $4,600 effortlessly.

A few things to consider with this approach: Like all CDs, look for a bank offering FDIC insurance. This protects each depositor up to $250,000 if your bank goes under.

Two, because you're dealing with a larger cash balance, only use one if you don't need to touch the money until the term expires. If you need to break it open, you could lose thousands of dollars.

Most CDs come with early termination fees. Those fees depend on the CD's term. For shorter-term CDs of one year, you'll likely forfeit a few months of interest, whereas with longer CDs, it could be up to six months.

If cash flexibility is a priority, then consider this CD instead.

A safe solution with no penalties

A no-penalty CD can be an excellent start if you've never had a CD before and don't want to commit to a longer-term option. How it works: You'll open and deposit as you would with any other CD. They even come with short maturity windows, usually six months to a year, depending on the bank.

My recommendation: Climate First Bank has a six-month no-penalty CD, where you'll earn 4.33% APY with only a $500 minimum deposit.

However, unlike regular CDs, you can withdraw from them. Some banks allow you one withdrawal per month, while others will just close your CD without any early termination fees.

Before signing up, pay attention to the vesting period: It's the time banks require you to keep funds in the account before you can withdraw. Thankfully, for no-penalty CDs, this is usually one week to one month, so you can change your strategy right away if you need to.

High interest rates present a rare opportunity for savers. Choosing the right CD can lock in high guaranteed returns, outpace inflation and maintain the flexibility to respond to changing economic conditions.

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Treasury yields surged and equity indexes sank after the government said consumer prices rose last month at a faster clip than Wall Street forecast. Technology and other sectors closely connected to the artificial intelligence (AI) revolution reflected today's sharp risk-off turn, as healthcare, consumer staples and energy stocks caught bids.

The 2-year Treasury yield (+1.5 bps, 4.808%) spiked more than 10 basis points within minutes of the release of a red-hot September CPI report, but eased back through Wednesday's trading session. "On balance," Barclays economist Pooja Sriram writes, "this morning's inflation data are unlikely to provide much comfort to policymakers."

Sriram says risks economists "have flagged for some time, including energy pass​-​through into core prices, resilient consumer spending, and AI​-​related price pressures" are becoming bigger factors in the price stability equation.

As the economist concludes, "Although favorable base effects should mechanically lower annual inflation rates next year, the recent run of prints casts doubt on how much progress is being made on underlying inflation."

The 10-year Treasury yield (-2.7 bps, 5.19%) and the 30-year Treasury yield (-4.6 bps, 5.517%) were lower at the end of a volatile session in the bond market. CME FedWatch now shows a 34.9% probability of a 25-bps rate hike at the conclusion of the October 27-28 Federal Reserve meeting, up from 22.1% on Tuesday.

Investors, traders and speculators will turn their attention to the release of September's Producer Price Index (PPI) and retail sales data before Thursday's opening bell for the next clues on interest rates and monetary policy.

ASML sends a risk-off signal

By the closing bell, the Nasdaq Composite had taken a 1.9% tumble to 26,692, the tech-heavy index anchored by a seventh straight losing session for chipmakers on a mixed earnings calendar showing from one of the industry's overseas stalwarts.

The broad-based S&P 500 was down 1.1% to 7,719, and the blue-chip Dow Jones Industrial Average had slipped 0.09% to 51,622, as other groups boosted by the AI buildout reflected the macro mood.

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.

Netherlands-based ASML (ASML, -3.9%) reported a 47% increase in third-quarter revenue and 127% earnings growth, just missing on the top but easily beating on the bottom line. Management raised fourth-quarter sales guidance, too.

ASML also said it would struggle to meet demand for its chips in 2027 and 2028, indicating a healthy order backlog that should signal good things for semiconductor stocks.

Alas, Nvidia (NVDA, -3.2%) was among the worst Dow Jones stocks on Wednesday, joined by Caterpillar (CAT, -3.1%). The industrial stock is among those names, beyond tech and communication services stocks, benefiting from AI-driven demand.

Amid broader curiosity about the trajectory of the federal funds rate, markets seem wary of any and all kinds of open questions, even (perhaps especially) as they relate to growth expectations.

“Uncertainties around ASML's ability to ship DUV [deep ultraviolet lithography] tools to China remains a hot topic with investors," BofA Securities analyst Didier Scemama wrote ahead of ASML's report. "However, we think this is likely largely baked in the stock."

Scemama reiterated his Buy rating and his $2,915 12-month price target on ASML's American Depositary Receipt (ADR), which closed at $1,650 on Wednesday.

Bank of America pays up

Bank of America (BAC, -4.7%), because of a potential positive impact on net interest margin, is among the best stocks to buy for rising interest rates this fall.

The big bank also looks like a big bargain after BAC suffered its worst post-earnings share-price decline since the early aftermath of the global financial crisis more than a decade and a half ago.

As Jefferies analyst David Chiaverini notes, the Treasury Department announced a $1.2 billion fine on Bank of America for violations of anti-money laundering rules previously identified in a December 2024 consent order.

The fine resulted in a 17-cent-per-share hit to BAC's bottom line. But Chiaverini, who has a Buy rating on BAC and considers the financial stock a "Franchise Pick," now sees upside from here of about 36% based on his 12-month target price of $70.

"While the charge is a meaningful one-time hit," the analyst observes, "we believe remediation costs are largely embedded in the current expense base. The key debate is how long the consent order could be in place and the extent to which it could impede operations, if at all."

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"Perhaps it takes courage to raise children," John Steinbeck wrote in 1952's East of Eden. The American classic has a lot to say about parenting — and a lot to say about how money can twist relationships within families, despite good intentions.

Without giving away spoilers, I'll just say that East of Eden is ultimately a story about what we do and do not inherit from our parents. Because of that, with a new adaptation of the Cain-and-Abel tale now available to stream on Netflix, we partnered with our sister site CinemaBlend to ask some cast members about handling inheritances.

CinemaBlend sat down with actors Hoon Lee, Joseph Zada and Joe Anders. The latter two play brothers Cal and Aron, the younger generation of the story. Where Aron (Anders) is kind and trusting, Cal (Zada) is scheming and suspicious. To put it another way, a Kiplinger-Morning Consult survey found that 33% of adult children expect an inheritance will create conflict with their siblings: Cal and Aron are the types of squabbling siblings trusts and professional executors were created for in estate planning.

CinemaBlend asked Anders and Zada what they think would've happened if their characters' parents passed their businesses down to the brothers to run.

"I think I would've killed that," Zada said, in characteristically Cal fashion.

Turning to his onscreen brother, he said, "I don't know about you, dude. You're a little all over the place. I think you really wouldn't have done very well. You would've thought that you would've done great."

"Aron would've been totally convinced he was doing amazingly," Anders agreed. "And then I think he would've had a wake-up call at some point."

The 'wake-up call' of inheritance

There's a lot of confidence when it comes to inheritance. Our survey found that 70% of adult children feel confident in their ability to manage an inheritance.

But expectations and confidence don't always align with reality. Eight percent of adult children said they believe their parents' estate includes business assets — but only 2% of parents said business assets were in their estate. On the flip side, 54% of parents said real estate, including their home, is part of their estate — but only 32% of the younger generation said the same. These differences demonstrate the lack of understanding adult children have about what they may inherit, and those surprises could lead to, as Anders put it, shocking "wake-up calls" about how prepared you actually are.

"Confidence and competence are different things," Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth®, told me in our Kiplinger Conversation about inheritance. That's why it's important for parents to have open and honest conversations about their estate with their children (although, well, Aron and Cal may not have wanted to hear all about it from their mother).

By having these conversations, and especially by having these conversations throughout life stages from a young age, parents can better ensure that their legacy won't be squandered by overconfident and underprepared children. They can help their children know what to be ready for and how to manage certain money challenges.

When we asked adult children in our survey what they'd want to use an expected inheritance for, one respondent said, "I hope to use it to get a nice family business going for our future generations."

It's a lofty idea to start a business you hope to be a family legacy, but as each generation steps up with their own hopes, dreams and, let's face it, faults, it's not a given that even a successful business will survive a second generation. It's often not enough to simply build an estate; you also have to educate your children to be capable of managing it.

Because while it may seem like a gift to leave an inheritance, East of Eden is a prime example of how it can all go terribly wrong.

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A financial adviser can help you make sense of your finances, set realistic goals and develop a plan to achieve them. But a little preparation before your first meeting can help you get more out of the conversation.

Start by identifying your top three financial goals or concerns. Consider both your short- and long-term priorities, whether that's paying down debt, saving for a home or planning for retirement. Knowing what matters most to you will help the adviser understand your needs and recommend a path forward.

You don't need to have all the answers before your first meeting. The goal is to come prepared with a clear picture of your priorities and questions. This will help you make the most of your time and determine whether the adviser is the right fit for your financial needs.

Gather a snapshot of your finances

To help your financial adviser get a clear picture of your financial situation, gather a few key documents before your first meeting. These include:

• Recent pay stubs or other proof of income
• Most recent federal income tax return
• Current checking and savings account balances
• 401(k), IRA, pension and other retirement account statements
• Brokerage and other investment account statements
• Mortgage statements showing your balance, interest rate and monthly payment
• Credit card, auto loan, student loan and other outstanding debt balances
• Social Security benefit estimate, if applicable
• Life, disability and long-term care insurance policy details
• Will, trust and other estate planning documents, if applicable
• Employee benefits information, including retirement plans, insurance and stock options

Your adviser may ask you to upload these documents to a secure online portal before your appointment or bring them to the meeting. Don't worry if you can't find everything on the list. Bring what you have and follow up with any missing documents afterward. There's no need to delay your first meeting.

Know where your money is going

It’s helpful for your financial adviser to understand where your money goes each month; with that information, they can help you decide how to best save and invest your money to meet upcoming expenses or goals.

Estimate your typical monthly spending. If you have a budget, that can be a good place to start, since it outlines your recurring expenses. Identify any major recurring expenses, like your mortgage, health insurance and car and home insurance costs, and make sure you factor these expenses into your monthly spending.

It’s also important to flag any large expenses coming in the next few years, such as:

• Buying a home or making major renovations
• College tuition or other education expenses
• Major travel or vacations
• Purchasing or replacing a vehicle
• Medical expenses or planned procedures
• Retirement or a planned career change
• Supporting aging parents or other family members
• Weddings or other major family events

Be sure to account for any income that varies throughout the year, such as commissions, bonuses, freelance earnings, rental income or stock-based compensation. Let your adviser know if you expect any significant changes to your income, too.

Be ready to talk about more than money

During your first meeting with a financial adviser, you won't just talk about the specifics of your saving and spending. An adviser might ask you questions to better understand your priorities and attitudes about money, such as:

• At what age would you like to retire?
• What does your ideal retirement look like?
• How comfortable are you with investment risk and potential market losses?
• Does anyone depend on you financially, such as children or aging parents?
• Do you expect to receive an inheritance?
• Do you want to leave an inheritance for your family or other beneficiaries?
• Is charitable giving important to you?
• What are your biggest financial concerns?
• Do you anticipate any major life changes, such as marriage, divorce, a career change or relocation?
• How confident do you feel about managing your finances?
• Would you prefer to be actively involved in financial decisions or have an adviser take a more hands-on role?

Prepare questions for the financial adviser

Your first meeting with a financial adviser gives you a chance to get to know them and make sure that they’re the right fit for your needs, too. Don't be afraid to ask about their experience, qualifications, fees and approach to financial planning. Come prepared with a few questions to ask, including:

• How are you compensated, and do you earn commissions?
• What will I pay in fees, and are there any additional costs?
• What financial planning and investment management services are included?
• What professional credentials and certifications do you hold?
• Do you regularly work with clients who have financial goals and circumstances similar to mine?
• Do you have minimum investment or account balance requirements?
• What is your approach to investing and managing risk?
• Who will manage my investments and oversee my financial plan?
• How often will we meet to review my financial plan?
• How will we communicate between meetings?
• How will we measure progress toward my financial goals?
• Are there any potential conflicts of interest I should know about?
• How can I verify your credentials and check your disciplinary history?

Understand how financial advisers get paid

Financial advisers may be compensated in several ways, and that structure can affect what you pay. Don't hesitate to ask about how the adviser is paid, and then ask any follow-up questions you might have about how the structure affects your costs.

Your adviser should be willing to help you understand how their structure works, but here are a few common fee structures for financial advice that advisers may use:

• Assets under management (AUM): Adviser charges a percentage of the assets they manage for you
• Flat fee: Client pays a set amount for a financial plan or ongoing advice
• Hourly fee: Adviser charges for the time spent providing advice
• Subscription or retainer: Client pays a recurring monthly, quarterly or annual fee
• Commissions: Adviser may receive compensation when a client purchases certain investments, insurance products or other financial products
• Combination: Some advisers use more than one compensation method

Fee-only and fee-based advisers may sound similar, but there's an important distinction.

Fee-only advisers are compensated directly by their clients and don't earn commissions from selling financial products.

Fee-based advisers also charge clients for their services, but they may earn commissions from recommending or selling certain investments, insurance policies or other financial products.

To understand what you'll actually pay, ask the adviser to explain their fees in dollars, not just percentages. Find out which services are included, such as financial planning, investment management, tax planning or estate planning guidance.

Also, ask about additional costs, including investment fund expenses, trading fees or account maintenance charges. These expenses may not be included in the adviser's fee and can add up over time.

Know what happens after the first meeting

After your first meeting, your financial adviser may ask for additional documents or schedule a follow-up appointment to discuss their recommendations. Ask when you can expect to receive a financial plan and what steps you'll need to take next.

You may also receive an engagement agreement outlining the services the adviser will provide, their responsibilities and the fees you'll pay. Review the agreement carefully and ask questions about anything you don't understand before signing.

Don't feel pressured to make a decision right away. Take the time to choose a financial adviser you trust, feel comfortable working with and believe can help you achieve your financial goals.

Don't feel pressured to make a decision that day

You don't need to have your finances perfectly organized before meeting with an adviser. What's more important is having a clear understanding of your financial goals and being prepared to discuss your priorities. Remember, the first meeting is just as much about evaluating the adviser as it is about reviewing your finances.

By the end of the meeting, you should understand what services the adviser offers, how much you'll pay and what to expect next. Most importantly, you should feel confident that they're someone you can trust to help you reach your financial goals.

Use the tool below to connect with a financial professional who can help:

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The Social Security cost-of-living adjustment (COLA) for 2027 will be 3.6%, the Social Security Administration (SSA) announced Wednesday. The increase matches Kiplinger staff economist David Payne's final estimate of 3.6%, follows a 2.8% boost in 2026, and sits near the long-term historical average of 3.8% since automatic COLAs began in 1975.

According to the SSA fact sheet, the 3.6% increase will translate to an additional $75 per month for the average retiree. In January 2027, the average payment will be $2,170, up from the pre-COLA amount of $2,095. Married couples will see an average increase of $117, raising the average monthly benefit for couples to $3,355 from $3,238.

The 2027 COLA in context

The 3.6% COLA is 0.8% more than the 2.8% increase in 2026 and is close to the historical average of 3.8%.

Payne, economist for The Kiplinger Letter, was right on the mark and projected a 3.6% COLA, arguing that "high energy prices bleed into other categories." September's inflation numbers supported his conclusion. The Bureau of Labor noted in its press release that "the index for gasoline rose 9.1% in September, accounting for over half of the monthly all items increase" and that "the energy index increased 5.2% over the month."

Will this increase help retirees? "Retirees shouldn’t interpret a higher COLA as having more spending money. If their benefit rises 3% or 4%, it is because the prices used to calculate the adjustment have risen, as well. The objective is preservation of purchasing power, not an increase in purchasing power," Martha Shedden, co-founder of the National Association of Registered Social Security Analysts (RSSA), told Kiplinger.

Historic COLAs. The COLA hit a low of 0.0% in 2016 during a period of price declines but surged to 8.7% in 2023 when pandemic-fueled inflation peaked. The biggest COLA increase was 14.3% in 1980. That was also the same year the U.S. prime rate reached a record high of 21.50% on December 19, 1980.

Below are the three lowest and highest COLAs beneficiaries have received since the formula was implemented in 1975.

Earnings test when you receive benefits while working

Earned income can cost you if you continue to work after claiming Social Security benefits before your full retirement age (FRA). How? The Social Security earnings test for annual income is applied to your gross wages and reduces your monthly benefit. Bonuses, commissions and vacation pay also count as income for the earnings test.

The SSA does not count:

• Other government benefits
• Distributions from tax-deferred accounts, such as 401(k) or tax-exempt accounts, including Roth IRAs
• Investment earnings, including interest, dividends and capital gains
• Pension benefits, including Social Security benefits
• Payments from annuities.

How much SSA withholds. The SSA temporarily withholds $1 of your benefits for every $2 earned above $25,560 or $2,130 per month for 2027. This is an annual increase of $1,080 from $24,480 and a monthly increase of $90 from $2,040 in 2026.

In a year the worker hits FRA, the test is more generous — the worker forfeits $1 in benefits for every $3 in 2027 earnings above $67,920 or $5,660 per month. This is an increase of $2,760 and $230, respectively, over the 2026 earnings limits of $65,160 or $5,430 per month.

Social Security tax wage cap for 2027

Social Security caps the amount of income you pay taxes on and get credit for when benefits are calculated. The new Social Security tax limit is $192,300 in 2027, up $7,800 from $184,500 in 2026. The tax limit is indexed to inflation, so you can anticipate it will rise again in 2028.

How much you need to earn to qualify for Social Security credits in 2027

You must earn a minimum of 40 Social Security credits to qualify for retirement benefits, up to four credits per year. The SSA cannot pay you benefits if you don’t have enough credits.

The SSA also uses the number of credits you’ve earned to determine your eligibility for retirement or disability benefits, premium-free Medicare Part A and your family’s eligibility for survivor benefits.

To earn one credit in 2027, you must have wages and/or self-employment income of $1,970, and you must earn $7,800 to get four full credits. In 2026, you only needed to earn $1,890 to earn a credit, $80 less than what you need to earn in 2027. This amount increases annually and will rise in 2028.

How is the COLA calculated?

The Consumer Price Index (CPI-W) for Urban Wage Earners and Clerical Workers is the benchmark the SSA uses to determine the COLA, but that is a recent development. Initially, a new act of Congress was required each time benefits were increased.

However, the rapid and persistent inflation in the 1970s quickly eroded the purchasing power of fixed pensions and Social Security benefits. As a result, Congress enacted the COLA provision in the 1972 Social Security Amendments, and automatic annual COLAs began in 1975.

The COLA is now determined by the inflation observed in July, August and September in the CPI-W. The SSA calculates the percentage change between average prices in the third quarter of the current year (2026) and the third quarter of the previous year (2025).

This is the formula: (328.746 - 317.265 ) / 317.265 x 100 = 3.6%

Some proposals call for the COLA to be based on the Consumer Price Index for Americans age 62 or older (CPI-E), but they have so far failed. Proponents of using this price index argue that it reflects the costs older adults incur more accurately than the broader CPI-W. Medical expenses, an increasing burden on older adults, are weighted more heavily in the CPI-E than in the CPI-W.

However, the COLA applies not only to retirement benefits but also to disability and survivor benefits. A COLA geared toward older beneficiaries wouldn't necessarily address the needs of the other two groups.

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Homeowners insurance rates naturally go up over time, but State Farm has just increased homeowners insurance rates in Illinois for the second year in a row. The 8% increase follows a more significant 27.2% State Farm insurance rate hike in 2025 that drew criticism from many.

According to State Farm, the 8% increase will add about $10 per month to the average Illinois homeowner's insurance bill, though individual increases will vary. The higher rates took effect for new policies on October 1, 2026, and existing policyholders will begin seeing increases when their policies renew starting in December.

State Farm's rate hike reflects a broader trend of rising homeowners insurance costs nationwide. Even if you're not affected by the increase in Illinois, you could face higher premiums when your policy renews. Understanding what's driving these increases can help you prepare for higher costs and identify opportunities to lower your home insurance premium.

Why State Farm is raising homeowners insurance rates again

According to State Farm, the rate increase is driven by losses caused by extreme weather. The University Corporation for Atmospheric Research (UCAR) reports that as the U.S. warms faster than the global average, storms are more likely to form in that warmer environment.

During the 1980s, the U.S. averaged just three billion-dollar weather disasters annually, each causing at least $1 billion in damage. By 2024, that number had climbed to 27, including 17 severe storms involving tornadoes, hail and straight-line winds.

As severe storms become more frequent, insurers pay out more in claims to repair or replace insured property. Rebuilding expenses have also increased, driven up by higher material and labor costs.

Rising homeowners insurance costs aren't limited to Illinois. Homeowners nationwide are feeling the pressure as premiums continue to climb. According to a report from the National Association of Insurance Commissioners, homeowners insurance premiums rose faster than inflation between 2018 and 2024, putting additional strain on household budgets.

How much more could homeowners pay?

For Illinois homeowners insured by State Farm, an 8% rate increase could add hundreds of dollars to their annual insurance costs, depending on their current premiums. Here's what that increase could look like at different price points.

Figures are hypothetical and illustrate an 8% premium increase. Actual increases will vary by policyholder.

For homeowners who pay their insurance premiums through a mortgage escrow account, higher insurance costs can also mean higher monthly mortgage payments. Even with a fixed-rate mortgage, your total payment can increase as property taxes and insurance costs rise.

The latest 8% increase follows State Farm's 27.2% rate hike in 2025, adding to the financial burden for Illinois homeowners who have already seen their insurance costs climb.

With homeowners insurance costs continuing to climb, now is a good time to see whether you're getting a competitive rate. Comparing quotes from multiple insurers could help you find similar coverage at a lower price.

Use the tool below to explore your options:

What Illinois' new insurance laws mean for homeowners

State Farm's 27.2% rate hike in 2025 drew criticism from Illinois Governor JB Pritzker and raised concerns about rising homeowners insurance costs. In August 2026, Pritzker signed House Bill 4273, now Public Act 104-0752, to strengthen oversight of homeowners insurance rates.

The law gives the Illinois Department of Insurance greater authority to review rate increases and requires insurers to provide policyholders with at least 60 days' notice before renewal premium increases exceeding 10%. The new requirements take effect July 1, 2027.

5 ways to lower your homeowners insurance costs

Though homeowners insurance rates are rising, there are several ways you may be able to bring your premium down.

• Shop around: Shop around for insurance annually before your premium renews. Compare quotes from at least three insurers, and make sure you're comparing the same coverage limits and deductibles. You might be able to save money by switching home insurance providers.
• Review your coverage: Make sure your coverage is appropriate for your needs, but also verify that you're not paying for more coverage than you need. Check your dwelling replacement costs, endorsements and coverage limits. If some of your coverage limits are high, you may be able to save money by lowering them — just don't leave yourself underinsured.
• Consider a higher deductible: Increasing your home insurance deductible can lower your premiums, saving you money every month. A higher deductible comes with additional out-of-pocket risk. Since you'll need to pay your deductible if you have to file a claim, it's a good idea to keep a deductible payment accessible, such as in a high-yield savings account, so it's there if you need it.
• Ask about discounts: You might be able to save money for bundling homeowners and auto insurance policies, installing a security system in your home, investing in storm-resistant home improvements and remaining claims-free. Contact your insurer, make sure you're receiving the discounts you qualify for and ask about what other discounts are available. 
• Review your policy annually: Before automatically renewing your coverage, check your coverage changes and premium increases. Contact your insurer to ask about discounts, changes in coverage and more before you decide to renew.

Higher insurance rates don't mean you have to overpay

State Farm's latest rate hike reflects a broader trend of rising homeowners insurance costs nationwide. While insurance is essential for protecting one of your most valuable assets, you don't have to accept a higher renewal premium without exploring your options.

Start by running a home insurance checkup to make sure your coverage still meets your needs. Then, compare quotes from multiple insurers to see whether you can get a better deal. Don't focus solely on price. Review coverage limits, exclusions and deductibles to find a policy that offers the right balance of protection and affordability.

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Having a pension can provide a powerful foundation for retirement. If you also have significant savings, your planning challenges may look very different from those of the average retiree.

For many Americans, retirement planning revolves around one question: "Will I have enough money to last?" But what if you have a pension that will provide reliable income for life, and you've also accumulated $1 million or more in savings?

This changes the retirement planning equation. I know this because, as a CERTIFIED FINANCIAL PLANNER® professional and the founder and CEO of Peak Retirement Planning, I specialize in serving those with pensions and more than $1 million saved.

You may have more flexibility than you realize when it comes to investing, withdrawing money and managing taxes. At the same time, having a pension and significant assets can create planning challenges that are easy to overlook, particularly when it comes to required minimum distributions (RMDs), Roth conversions and your eventual legacy.

I call this group the 2% Club: People who have both a pension and substantial retirement savings (I even wrote a book about this group — you can request it for free).

Many also fit what I call the Midwestern Millionaire profile: Hardworking, frugal and diligent savers who spent decades prioritizing saving over spending.

If that sounds like you, congratulations. You've done the hard part. Now comes the part that requires a different kind of planning.

Here are seven areas to put on your retirement checklist. And if you'd like to watch a video about it, here you go:

1. Build an investment plan around your pension

One of the biggest mistakes I see is assuming that every retiree needs the same investment portfolio. You may have heard that retirees should simply use a traditional 60/40 portfolio, but there is no universal investment allocation that works for everyone.

A pension can significantly change your risk profile because it provides a source of income that isn't dependent on the performance of your investment portfolio. Think of your pension as one part of your overall retirement income picture, then ask:

• How much income will I need from my investments?
• How much of my spending will my pension cover?
• What are my goals for leaving money to my children or grandchildren?
• Do I have charitable goals?
• How much investment risk am I comfortable taking?
• How important is preserving principal vs maximizing long-term growth?

For someone whose pension covers most or all of their essential expenses, their investment portfolio may have a different job than it does for someone who depends heavily on portfolio withdrawals. That could mean taking more investment risk because you have a reliable income floor.

On the other hand, it could mean taking less risk because you don't need your portfolio to generate aggressive returns.

The key is that your pension should be incorporated into your investment strategy, not treated as a completely separate issue.

2. Pay attention to tax location, not just asset allocation

Once you have determined what you should own, the next question is: "Where should you own it?" Many retirees have money spread across several types of accounts:

• Traditional IRAs and 401(k)s
• Roth IRAs
• Taxable brokerage accounts

These accounts don't all receive the same tax treatment, which creates an opportunity to think strategically about tax location.

For example, if you have growth-oriented investments that you expect to appreciate substantially over time, holding some of those investments in a Roth account may allow that future growth to occur tax-free, assuming you follow the applicable Roth account rules.

At the same time, assets designed primarily for preservation or income may be candidates for tax-deferred accounts, depending on your broader strategy.

Your taxable brokerage account presents another opportunity. Investments that generate capital gains may receive different tax treatment than investments generating ordinary income.

Tax-loss harvesting can also potentially help offset capital gains and ordinary income, while a properly constructed portfolio may offer greater tax efficiency.

The point isn't that one type of investment always belongs in one particular account; it's that your investment and tax strategy shouldn't operate independently. Where you hold an investment can be almost as important as what you invest in.

3. Prepare for RMDs

If you have accumulated substantial money in traditional IRAs, 401(k)s or other tax-deferred accounts, RMDs deserve attention well before they begin.

Under current law, the applicable starting age depends on your birth year, with some individuals subject to RMDs beginning at age 73 and those born in 1960 or later generally beginning at 75.

For someone with a large tax-deferred balance, RMDs can become significant.

Consider a hypothetical retiree who is 60 and has $2 million in tax-deferred accounts. If those assets continue to grow for another 15 years, the balance could be substantially larger by the time RMDs begin.

This is where having a pension can create an unusual situation. Many retirees have been told that they'll automatically fall into a lower tax bracket after they stop working, but if you have a sizable pension, Social Security and substantial tax-deferred savings, your taxable income in retirement could remain high, or even increase.

Your pension provides valuable income, but it can also mean that you have less room to absorb large RMDs at low tax rates.

That's why planning for RMDs should begin years before the first distribution is required.

4. Consider whether Roth conversions make sense

Roth conversions can be one tool for addressing a large future RMD problem. The basic concept is straightforward: You move money from a tax-deferred account, such as a traditional IRA, into a Roth IRA and pay the applicable income taxes on the converted amount.

In exchange, the money can potentially grow tax-free in the Roth account, and qualified Roth IRA withdrawals are tax-free. The challenge is determining how much to convert and when.

Converting too much in a single year could push you into a higher tax bracket or trigger other tax consequences. Converting too little could leave you with a large tax-deferred balance and potentially larger RMDs down the road.

That's why I prefer to think about Roth conversions as a multiyear tax-planning strategy rather than a one-time transaction.

For retirees with pensions and substantial tax-deferred assets, the goal may be to create greater tax diversification by having money available in taxable, tax-deferred and tax-free accounts.

This diversification can provide more flexibility later. You don't necessarily know what your future tax rate will be, but you can give yourself more options by not having your entire retirement portfolio concentrated in one tax bucket.

5. Plan for the 'widow's penalty'

For married couples, retirement planning shouldn't stop at determining whether both spouses have enough money. You also need to ask: "What happens financially when one spouse passes?"

When a married couple file taxes jointly, they benefit from married-filing-jointly tax brackets and a larger standard deduction. After one spouse passes, the surviving spouse may eventually have to file as a single taxpayer, and at the same time, the surviving spouse may lose some income, depending on the pension and Social Security benefits involved.

This combination can create what is sometimes called the "widow's penalty." The surviving spouse could have less income but pay more in taxes. This is one reason tax planning should happen before a spouse dies.

For example, a married couple may want to evaluate whether Roth conversions or strategic withdrawals make sense while both spouses are alive and filing jointly.

And don't overlook the practical side of the equation. If one spouse has always handled the investments, taxes and financial decisions, what happens when that spouse is gone?

A successful retirement plan isn't just one that works mathematically; it needs to be a plan that the surviving spouse can understand and implement.

6. Don't overlook legacy planning

If you've accumulated significant wealth, retirement planning eventually becomes estate planning. That means making sure the legal documents supporting your wishes are in place and up to date.

At a minimum, review whether you have the appropriate documents, such as:

• A will
• Financial and healthcare powers of attorney
• Healthcare directives or a living will
• Beneficiary designations
• Appropriate trust arrangements, when applicable

But estate planning isn't just about determining who gets your money; it's also about determining how efficiently they receive it.

For example, inherited retirement accounts can have different tax consequences than inherited taxable investments.

Under current rules, many non-spouse beneficiaries who inherit retirement accounts are generally subject to the 10-year rule, meaning the account must be distributed within 10 years. This can create significant tax consequences for beneficiaries, particularly if they inherit a large traditional IRA and are already high-income earners.

State estate and inheritance taxes can also matter, particularly for retirees living in states with their own estate tax systems.

The more you've accumulated, the more important it becomes to look at your retirement and estate plans as one integrated strategy.

7. If you haven't retired yet, carefully evaluate your pension options

If retirement is still a few years away, don't wait until you're ready to walk out the door before examining your pension options. This is particularly important when evaluating survivorship options and lump-sum choices.

A pension may offer several ways to structure your benefit. You might have to choose between receiving a larger monthly payment for yourself or accepting a reduced payment that continues to a spouse after your death. There isn't one universally correct answer.

Your decision should consider your spouse's age, health, other income sources, assets, life expectancy and the amount of income they would need if you passed first.

In some cases, life insurance could potentially be part of the equation. In other situations, retaining the pension's survivor benefit may make more sense. And some households may have enough assets that they can effectively self-insure.

The key is to calculate the actual need. Don't spend thousands of dollars for a survivorship benefit simply because you're afraid of what could happen. But also, don't eliminate a valuable survivor benefit simply because you're trying to maximize your own monthly check.

The same principle applies to the lump-sum option. The attractiveness of taking your pension as a lump sum can depend on factors such as interest rates, the pension's financial strength, your investment strategy, your income needs and your legacy objectives.

It shouldn't be an emotional decision driven by fear; it should be a mathematical and financial decision based on your specific circumstances.

Having a pension and significant retirement savings is something to celebrate, but it also means you shouldn't necessarily follow generic retirement advice designed for someone with an entirely different financial picture.

Your pension may give you greater flexibility with your investment portfolio. Your savings may create opportunities for Roth conversions and tax diversification. Additionally, your higher retirement income may make tax planning even more important.

The biggest mindset shift may be this: Your goal isn't simply to avoid running out of money. If you've spent decades being a disciplined saver, you may actually have the opposite problem; you may need to learn how to confidently use the wealth you've accumulated.

That means planning not only for how to maximize your money, but also for how to maximize your life, purpose and experiences in retirement.

A successful retirement plan should answer more than "Will I have enough?" It should answer, "How can I use what I've built to live the retirement I actually want?"

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

Would you like to leave a legacy to your children, grandchildren or other loved ones?

A trust fund will accomplish that, but you'd likely need to hire a lawyer to draw up documents. There also may be ongoing management fees that will reduce the amount your heirs will receive.

Unless you're leaving a vast estate, a trust fund is likely overkill. Simpler, cheaper ways to leave a defined legacy include cash-value life insurance, a 529 college savings plan and annuities.

All three have their advantages, but I'm going to focus on how different types of annuities can fund your legacy. (As founder and CEO of AnnuityAdvantage, I'm a retirement income expert.)

Income annuity keeps on giving

One of the better options, a lifetime deferred income annuity, is often overlooked. It's the only gift guaranteed to keep on giving for a lifetime. The vehicle converts a cash deposit into a stream of future income, much like a private pension.

Here's how it would work using a grandchild as an example. (It would work the same way for a child.) You would buy a lifetime annuity — also called a deferred income annuity — for your grandchild. It defers income payments until a future date that you choose.

Let's say your granddaughter is 10 years old. You make a $100,000 deposit. You decide to have payments begin when she reaches age 25 and continue for the rest of her life.

There won't be the normal 10% penalty the IRS levies on interest withdrawals before age 59½, because there's an exemption for systematic distributions over life expectancy.

As of mid-September 2026, when I was writing this article, one top insurer will guarantee a payment of $1,229.71 per month, with $1,083.37 of it taxable. If your grandchild lives to age 85, she would collect $885,391, including $785,391 in taxable interest plus tax-free return of the $100,000 of principal, over the payment term.

It's foolproof

An income annuity has no cash surrender value. Your grandchild or child won't be able to blow the money all at once on a fancy pickup or lavish vacation. And since he or she will receive a check from you every month, you'll be remembered fondly.

If you choose annual payments, you could have the electronic or paper check arrive each year on your grandchild's birthday or on Christmas, Hanukkah or another holiday.

The checks can increase if you add an inflation-protection rider so that the amount will go up over time. This option will help the recipients retain future purchasing power. However, it will reduce the initial payments.

Another advantage is tax efficiency. When income is received, only a portion of it will be taxable. This is because part of the income from this type of annuity is considered a return of principal, and part is considered earnings.

While earnings are taxed, return of principal is not. Once all principal has been repaid after many years, the payments will be fully taxable.

Guaranteed annuities with cash value also work

The drawback of an income annuity is that because there's no cash value, the child or grandchild can't tap it to pay for education or a home or anything else. Three types of deferred annuities — variable, fixed-rate and fixed-indexed — do offer cash value as well as income options.

Variable annuities offer growth potential but are not principal-guaranteed, so we'll focus on the other two varieties.

Multi-year guarantee annuities (MYGAs), the main type of fixed-rate annuity, behave much like a bank certificate of deposit (CD), paying a set, guaranteed interest rate for up to 10 years. Interest is tax-deferred until withdrawn.

Most MYGAs allow penalty-free withdrawals, sometimes up to 10% of the policy value annually.

Fixed-indexed annuities pay interest based on the performance of a stock market index, giving policyholders a portion of the index return. So they offer more growth potential than MYGAs.

However, when the market is down for the year, they normally pay nothing, but they never decrease in value. Therefore, the interest rate fluctuates markedly from year to year.

Indexed annuities usually also allow penalty-free withdrawals of a portion of the policy value.

Tax matters

To avoid tax problems, the child or grandchild should be listed as the primary beneficiary, not the owner of the policy. Then, upon the death of the policyholder, the contract value will be paid out as a death benefit and won't be subject to the 10% IRS early-withdrawal penalty. They will still owe standard income tax on the untaxed gains.

The beneficiary can receive a lump sum, but some insurers will charge surrender penalties and market-value adjustments for a full death-benefit payment if the contract is still subject to an early surrender penalty.

Other options for the beneficiary typically include various monthly payout options, such as lifetime payments.

An insurance company cannot pay a deferred annuity's death benefit directly to a minor. To name a minor as a beneficiary, specify a Uniform Transfers to Minors Act (UTMA) account, which designates a trusted adult custodian to manage the funds until the child reaches legal adulthood. An UTMA is easy to set up.

While others may give gifts that are soon forgotten, providing loved ones with an ongoing gift of income that will last for the remainder of their lives will ensure that you have created a legacy for yourself as well as a nice financial cushion for the younger generation of your heirs.

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

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

Carlos, an experienced accountant based in Los Angeles, called me with a six-word question: "When should I claim Social Security?"

Then his Mexican pension pulled up a chair.

His final year of work sat down beside it. A planned move back to Mexico arrived, carrying two suitcases. The tax rules brought a calculator and no sense of humor.

Within minutes, Carlos's one question had formed a committee.

He had worked legally in the U.S. since 2009. His Mexican pension was expected to begin in January 2027. His initial plan was to continue working in the U.S. until approximately September 2027 and then return home to Mexico.

But even as an accountant, he struggled to navigate all the rules and scenarios of the Social Security Administration (SSA). He worried: Should he claim when the pension began, when work ended, after moving, at full retirement age or at 70?

Five dates. Each had an argument in its favor.

Carlos had come looking for a date. I needed to understand what he wanted that date to accomplish.

First confirm which choices are available

Before weighing the alternatives, I confirmed that Carlos qualified on his U.S. earnings record. We couldn't assume his Mexican work history would fill any gaps: The U.S.-Mexico Social Security agreement has not entered into force.

His remaining earnings also mattered. Claiming before full retirement age while still working could cause benefits to be withheld under the retirement earnings test.

SSA later adjusts the retirement benefit at full retirement age to account for affected months.

Fortunately for Carlos, his Mexican pension wouldn't trigger a reduction under the Windfall Elimination Provision (WEP) as it no longer applies to benefits payable for January 2024 and later. But overseas payment rules and tax residency still needed attention.

Those rules established the boundaries. They didn't choose a filing date for him.

The pension changed the question

Near the end of our conversation, I asked, "How much money will you need each month once you return to Mexico?"

"About $2,200," he said.

Carlos was single and already owned his home there.

"And how much will your Mexican pension provide?"

"The equivalent of $2,500 a month."

His expected pension exceeded his stated monthly budget by about $300, before adding any U.S. Social Security. We still needed to consider taxes, unexpected expenses and whether that budget would remain adequate over time. But the numbers changed the discussion.

Returning to Mexico and claiming Social Security were separate decisions. Once his pension began, he could consider going home, living on that income and delaying his U.S. benefit.

Delaying retirement benefits beyond full retirement age earns credits until age 70. That could give Carlos a larger monthly payment and, depending on his lifespan, greater lifetime benefits.

It was a reasonable option. Then he explained what the comparison had missed.

Waiting meant postponing generosity

"Ray, I was kinda thinking that if I had my Social Security money now, I could use it to take care of my family and friends."

For the first time, the committee went silent.

Carlos missed the people he loved. His parents had both died in their 60s. Many of the friends and relatives he wanted to return to were now in his age bracket. He didn't know how many years they would have together.

His parents' experience didn't predict his lifespan. It did help explain why a larger check years later held less appeal than the opportunity to help someone sooner.

An accountant understands that money has a time value. Carlos was also thinking about the value of time.

I quickly understood his real question: How much future income would he give up by claiming earlier, and was using that money sooner worth the trade-off to him?

That required calculation. It also required listening.

Give the math the right assignment

I explained that a complete individualized analysis could compare the filing dates, incorporate his remaining earnings and quantify the differences. The pension's apparent ability to cover his budget didn't make the alternatives financially identical.

It gave him room to weigh something beyond basic bill-paying.

My responsibility was to help Carlos understand the consequences of each choice. The largest number on his Social Security statement wasn't a commandment.

You don't need a foreign pension to face a similar decision. You might want to retire while a spouse is healthy enough to travel, reduce work to care for a parent or preserve dependable income for your later years.

Start by describing that objective. Then compare realistic claiming dates using your spending needs, other income, taxes and family circumstances. Include a longer-than-expected life in the analysis.

Wanting to enjoy the present doesn't eliminate the need to finance the future.

Carlos's pension gave him an option worth exploring. His wish to help people explained why he valued it.

A financial analysis could estimate the price of claiming earlier. It couldn't calculate the value of generosity delivered on time. The most useful question we discussed wasn't printed on his benefit statement: What is the money for?

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

A proposed bill could be a game changer for families with well-funded 529 plans. Sens. Ted Cruz, R-Texas, and Lisa Blunt Rochester, D-Del., are calling for an end to a current law that places a $35,000 lifetime cap on rollovers from 529 education savings plans to Roth IRAs.

Both sponsors of the bipartisan bill, dubbed the 529 Retirement Enhancement Act of 2026, say it will give parents and 529 account owners more flexibility to save and invest in a child’s future.

If passed, the bill would further reduce the uncertainty about what happens to unspent money in 529 plans, adds Paul Stanley, a wealth adviser at Arca.

"It would be a positive development," says Stanley. "One of the biggest impediments to people saving money in a 529 was the risk that the money was going to just go to waste (and be subject to taxes and penalties) if the kid didn't go to college."

While 529s are not so-called "use it or lose it" plans, if you withdraw savings for nonqualified educational purposes, the earnings portion is taxed as ordinary income plus a 10% federal penalty. Account holders, though, can retain the funds for future qualifying educational expenses or change the beneficiary to an eligible family member, such as a sibling.

However, having the ability to roll over more 529 dollars into a Roth IRA, a retirement fund that offers tax-free withdrawals, enables parents to avoid taxes and penalties to access unspent 529 savings and gives their child a jumpstart on retirement savings.

The SECURE Act 2.0, passed by Congress at the end of 2022, allows individuals to roll over $35,000 from a 529 plan into a Roth IRA. Aside from eliminating the $35,000 lifetime cap on unused funds, the proposed legislation keeps all other requirements from the 2022 law, which allows excess 529 assets to be transferred into a Roth IRA over time rather than leaving the assets stranded in 529 accounts.

"The initial SECURE Act was a really, really great idea," explains Ernie Wingard, a financial adviser at Capital Choice Financial Group. "This proposal (if passed) will make it even better."

How the new bill could boost financial flexibility

When introducing the bill, Cruz said the existing law "penalizes" families who build up savings in a 529 plan but don't use all the money because their child got a scholarship, went to a less expensive school, or chose not to attend college.

The new bill, adds Blunt Rochester, gives 529 savers other uses for the money if education plans change.

"Families should be able to preserve financial flexibility regardless of what their child's education decisions are years down the road," says Blunt Rochester.

529s are a popular educational savings tool. Funded with after-tax dollars, the money in these savings accounts grows tax-deferred. While there's no federal upfront tax deduction for contributions, some states offer deductions for in-state 529 plans, according to Fidelity Investments.

Increasingly, the dollar amounts that pile up in 529s can reach sizable numbers. Why? There's no annual federal contribution limit for 529 plans, although each state's plan sets a maximum total balance per beneficiary. For gift-tax purposes in 2026, contributions of up to $19,000 per person ($38,000 for a married couple) per 529 beneficiary qualify for the annual exclusion. What's more, in 2026 a 529 contributor can front-load 529 deposits, giving five years of annual gifts in a single year, or $95,000 per person or $190,000 for a married couple.

These huge balances can potentially result in unused dollars. The downside of using leftover 529 dollars for nonqualified educational expenses is that they are subject to income tax and a 10% federal tax penalty on any earnings associated with the distribution, according to Fidelity.

"That's where a transfer to a Roth IRA could make sense," according to a Fidelity blog post.

Four things to know about 529 to Roth IRA rollovers

Consider a few things before transferring unused 529 dollars to a Roth IRA.

1. The 529 plan in the beneficiary's name must have been open for at least 15 years prior to the rollover. The new rollover IRA must also be in the beneficiary's name.

2. The amount rolled over in any given tax year must not exceed the Roth IRA annual contribution limit applicable to the beneficiary. The Roth contribution limit for 2026 is $7,500 for those under 50. Because transfers are capped annually, moving a large 529 balance into a Roth IRA can take many years — meaning families must start the process early while the child is still working and earning income.

3. The transfer amount must come from contributions to and earnings from the 529 account at least five years prior to the transfer date.

4. The beneficiary must have earned income that equals or exceeds the amount rolled over to a Roth IRA in any given year.

Turning leftover college funds into a multimillion-dollar nest egg

Passing the bill would likely boost 529 savings plans, as parents would no longer have to worry about the downside of this savings product if their kid doesn't go to college. "It gives the 529 more power," says Wingard.

Extending the amount of time 529 savings can stay tax-deferred can add up to huge dollars for beneficiaries through compounding. Under current law, Wingard notes that a 22-year-old who rolls over the maximum $35,000 and earns a 9% annual return can watch that money double every eight years, turning it into $1.12 million by age 62.

"That’s why I think this bill is huge," says Wingard.

But eliminating the lifetime cap takes that growth potential to a whole new level, as shown in the table below.

Under the proposed bill, if that same 22-year-old has $75,000 in excess 529 plan funds, they could roll over the entire amount over 10 years. By age 62, those tax-free contributions could compound into an estimated $2.1 million nest egg.

"Financial flexibility is incredibly important," says Stanley.

Currently, families concerned about penalties for non-educational distributions from 529s are reluctant to put all college savings in a single 529 bucket.

In contrast, the new bill "allows planners to look at planning purely from the perspective of saving in the best tax-preferred way we can," says Stanley.

Will the bill pass?

Financial advisers are split on whether Congress will pass the bill. Stanley thinks the odds are low, citing high U.S. deficits and lost tax revenue. But Wingard thinks the odds are higher, as both parties would benefit from making it easier for families to save for their children's futures.

The bottom line: If the child goes to college, the money grows tax-deferred under the proposed changes. And if the child takes another route in life, the dollars keep growing tax-deferred and become a retirement nest egg.

"That’s going to give your kid a leg up in retirement," says Stanley.

Read More

• 529 Plans and College Savings: 4 Urgent Questions
• Best 529 Plans of 2026
• Grandparents' Guide to 529 Plans for College and Private School
• Roth IRA vs 529 Plan for College Savings

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

Artificial intelligence will be transformational, akin to the dawn of the internet, but unfolding at a faster pace. But overspending on AI is creating a bubble, in our judgment, like other major industrial projects in history, such as railroads, electrification or the web.

Here’s how we currently see the state of play.

AI outpaces previous building booms

AI is the largest infrastructure project ever. U.S. spending is double the dot-com peak, when the telecom and fiber build-out hit 1.2% of GDP in 2000, according to an analysis by the investment firm Apollo. AI is now at 2% of GDP and will soon be 3%.

Big Tech spending will hit $1 trillion next year in capital expenditures from Alphabet, Amazon, Meta and Microsoft, according to data compiled by Bloomberg. That’s up from $700 billion this year and $380 billion in 2025. Back in 2022, it was $150 billion. With big spenders Oracle and SpaceX, it’s even higher. Though the spending is expected to level off, there’s no end in sight for $1 trillion-plus yearly outlays.

Unlike previous infrastructure build-outs with up-front spending on things that lasted decades, AI spending resets every four to six years as high-priced AI chips in data centers need to be upgraded, along with other equipment.

And improving AI is getting more expensive, requiring more computation and electricity to develop leading-edge AI. New AI models can cost $1 billion. A huge, 1-gigawatt data center? $60 billion, according to Nvidia CEO Jensen Huang.

Some of the most significant risks

Among risks that bear watching: The drastic business shift of tech giants from high-margin software to capital-intensive infrastructure. Once fountains of cash, most of the top AI spenders will have negative free cash flow this year and in 2027. S&P Global doesn’t project a recovery of FCF for most major players until 2029, a timeline that would lead to mounting pressure and possible investor blowback.

Debt-fueled financing with increasingly complex structures, such as special-purpose vehicles, or SPVs, which get debt off Big Tech’s books. Recently, Nvidia spearheaded a plan with investment firms, such as BlackRock and Goldman Sachs, to unleash $500 billion in AI financing. The plan seeks to turn AI chips in a data center into an investable asset and highlights how the AI boom is being financed by unconventional means. BlackRock CEO Larry Fink compared it to the creation of mortgage-backed securities in the 1970s. Those MBS securities went on to play a leading role in the 2008 financial crisis.

The massive spending commitments. For example, Alphabet has $811 billion in obligations, mostly for AI. OpenAI has plans to spend $800 billion through 2030 to build some of the world’s biggest data centers in New Mexico, Texas, Wisconsin and Michigan. Flexibility may be hard to come by with multiyear deals for chips, power and land. Big Tech spenders are forecasting demand for AI years in advance, an inherently dicey proposition.

Circular deals, such as Nvidia financing the purchase of its own chips. For example, Nvidia is providing up to $105 billion in financing for an OpenAI data center in Ohio. Even with a torrent of cash from soaring chip sales, Nvidia can’t maintain the pace of its recent extensive dealmaking, according to a report by Morningstar’s PitchBook. Another example: Microsoft has a 25% stake in OpenAI, which accounts for 70% of Microsoft’s AI sales.

The collective action problem of tech executives, all willing to overspend in the pursuit of “superintelligence,” an ill-defined AI breakthrough. “The risk of underinvesting is dramatically greater than the risk of overinvesting,” said Sundar Pichai, the CEO of Alphabet, back in 2024. Four or five tech companies breaking the bank to build the most advanced AI is not viable over the long run. It would not be surprising if, eventually, the race results in two to three leading-edge providers.

Other risks include AI turning into a low-cost commodity, stemming from both efficiency gains and cheaper AI services, including Chinese models, flooding the market. That could lessen demand for the most advanced, premium-priced AI. A terror attack or other rogue event involving AI could spur regulations that slow down or restrict the technology in an onerous way. Or AI improvements could slow or stall, lessening the pressure to spend so heavily on developing new AI systems.

The arguments against a bubble

Many analysts take issue with bubble talk, since revenue is exploding at Anthropic, OpenAI and other firms. Tech giants such as Alphabet and Amazon have diversified global businesses that cater to both businesses and consumers, with massive amounts of revenue. Plus, demand for AI is vastly outpacing supply, even as businesses cope with high costs.

AI use has exploded among businesses and consumers as free chatbots from Meta, Alphabet and OpenAI have proliferated. OpenAI has 900 million active weekly users, plus over 50 million consumer subscribers, with plans starting at $8 per month. Anthropic has hundreds of thousands of paying business customers and is on track to make tens of billions of dollars in sales per year.

But the revenue earned from AI is still far from keeping up with the necessary computing’s soaring cost. For AI spending to be sustainable, the tech must expand beyond employee productivity software or even entire IT budgets. AI must disrupt and reshape entire industries, from manufacturing and financial services to health care and retail. Businesses would need to shift huge amounts of spending that they now devote to labor and funnel it to AI products and services.

Amid AI’s fast adoption, tech executives have acknowledged the risk of a bubble. For example, Amazon founder Jeff Bezos has called what’s happening an “industrial bubble,” where investor excitement leads to certain money-losing bets but also breakthrough ideas. Meta CEO Mark Zuckerberg has said that a bubble is “definitely a possibility,” like those stemming from major infrastructure projects of the past.

"I am worried about the world's compute build-out plans," said OpenAI CEO Sam Altman in an interview in early September. Altman sees the first signs of "unsustainable silliness" of certain AI cloud companies, known as neoclouds, that claim they will build “gigantic amounts of compute” without securing the needed financing or customers.

The bottlenecks to AI progress

There are likely bottlenecks that slow AI adoption by businesses and consumers, ranging from human behavior to regulatory issues. That friction is sure to delay the full potential of AI, including all the enhanced productivity it promises. For Big Tech spenders, such delays will be hard to endure as they seek higher revenue and profits.

Another issue not to be overlooked is the major roadblocks to AI deployment, especially accessing the needed power, along with shortages of chips, equipment and labor. Some analysts point to roadblocks as a built-in factor staving off a bubble, preventing too much development, too fast. But those roadblocks will be more evident over the long term rather than in the short run. The explosion of data center opposition is a real concern, but tech giants have ample data centers in the pipeline for now.

Bubbles fund breakthrough ideas

It’s not clear when a bubble would burst or deflate. A fallout could include AI start-ups going out of business and certain infrastructure providers facing lumbering debt loads. The Kiplinger Letter’s view is that a pullback in spending could spark a mild recession, as the tech bust did in 2001.

Still, overspending on AI will be useful, pouring money into valuable areas that lay the foundation for an economic leap. Promising areas include AI software that automates complex white-collar office tasks, AI models that accelerate drug discovery and AI coding tools that automate computer programming. The ultimate winners of the race may not be the heavy spenders of today, but future start-ups that launch new products and services enabled by AI.

But on the cusp of all this potential, there’s no doubt that uncertainty and financial risk are rising.

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

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For years, retirees were told that saving $1 million was the benchmark for a comfortable retirement. Today, that number feels increasingly outdated, and recent studies bear that out. Americans now believe they will need nearly $1.5 million to retire comfortably.

Rising costs, longer life expectancies and market uncertainty have left many retirees wondering whether they'll outlive the money they spent decades building.

That fear is only becoming more common. Whether you're a young saver just starting your career or on the brink of retirement, the worry is less about if you can retire and more about if you've saved enough to maintain your current lifestyle.

The real retirement problem isn't always saving — it's spending

One of the biggest retirement planning mistakes people make is that they assume that their spending habits will remain the same or decrease in retirement; in reality, they might increase. Their lifestyle no longer matches what their savings can support.

High earners typically struggle with this more than most. They were used to increased spending during their working years, but once the paycheck stops in retirement, they're met with a rude awakening.

I've seen many retirees struggle with this problem throughout my career. Rarely is the issue about whether they saved enough, but whether they can live on the income their savings generate. That's why I believe it's important to find ways to replace the paycheck you've lost.

Replacing your paycheck

If you're no longer receiving monthly income from an employer, how do you replace it?

For many, Social Security alone won't be enough to cover essential living expenses. The answer lies in building a retirement plan around guaranteed income first and investment growth second.

Utilizing guaranteed income sources, such as annuities, allows the rest of your portfolio to remain invested in the stock market for growth and added flexibility.

This approach can reduce the emotional stress that often comes with relying entirely on the stock market for retirement income. All it takes is one bad year in the markets to potentially threaten the longevity of your money.

Creating multiple sources of income

Annuities are designed to address those fears directly. Think of an annuity like a self-funded pension. Instead of a company paying into a retirement savings vehicle, you're the one funding the investment. You contribute funds to the annuity, and in exchange, an insurance company promises to pay you a certain amount of money for a set period, depending on the type of annuity you purchase.

This predictable income stream can help cover basic living expenses such as housing, healthcare and utilities, replacing the paycheck you lost once you stopped working.

Annuities tend to be a safer investment because the value never goes down due to market conditions. It reduces the need to sell investments during downturns or worry about whether one bad year in the market will hurt your monthly cash flow.

The other portion of your money should stay invested in equities and other growth assets for discretionary spending and long-term opportunity.

Don't miss your window; plan early

Like many things in life, timing matters. I recommend people start building their retirement income plan about three to five years before retirement. That window gives you time to structure income strategies, evaluate expenses and prepare assets for the transition from accumulation to distribution.

Planning early gives you more flexibility and a better sense of whether you're on track to retire when you want. Instead of wondering whether you can afford to retire, you can start envisioning how you want to spend your time and what you want to do in your golden years.

Interest rates and opportunity

The current interest rate environment has also created a unique opportunity for retirement income planning.

While consumers often associate higher interest rates with expensive mortgages and credit cards, higher rates can also improve payouts on certain guaranteed income products such as annuities.

When interest rates were hovering near historic lows a few years ago, retirement income payouts were far less attractive. Today, higher rates have significantly changed the math for some retirees looking to create predictable income streams.

The bottom line: Retirement confidence comes from income security

Retirement planning isn't about hitting a magic savings number. It's building a strategy that aligns with the life you want to live.

1. Start planning three to five years before retirement. Create an income strategy before leaving work.

2. Build your retirement around income, not just portfolio size. Focus on replacing your paycheck to ensure essential expenses are covered.

3. Understand if your retirement can support your current lifestyle. If they don't match, make the appropriate adjustments to ensure your savings last.

The retirees who most often struggle are those who focus only on growing their money, without a plan to turn that money into predictable income, should market volatility strike.

On the other hand, the retirees who feel most confident know exactly where next month's paycheck is coming from, even if they no longer work for one.

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

Stocks closed lower Tuesday as market participants took in a lackluster start to earnings season and looked ahead to Wednesday's key inflation update. A steep sell-off in several semiconductor stocks didn't help, with reports that China's CXMT is making progress on its memory chip designs putting pressure on this corner of the market.

At the close, the blue-chip Dow Jones Industrial Average was down 0.4% at 51,670 and the broader S&P 500 was 0.02% lower at 7,805. The tech-heavy Nasdaq Composite, meanwhile, shed 0.2% to 27,204 as mega-cap memory stocks, including SK Hynix (SKHY, -3.2%) and Micron Technology (MU, -3.6%), slumped.

Johnson & Johnson (JNJ) was the worst Dow Jones stock today, falling 5.7% after the drugmaker reported earnings. JNJ beat top- and bottom-line estimates for its third quarter, but sales in its medical devices division fell short of Wall Street's expectations due to the ongoing conflict in the Middle East.

There are "countries that still value and actually want premium healthcare systems, think Kuwait, UAE, Saudi Arabia," J&J Chief Financial Officer Joe Wolk told CNBC. "They pride themselves on having solid healthcare, very good healthcare. But their budgets now are being resourced and allocated towards defense."

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.

JPMorgan reports a double miss

Elsewhere on the earnings calendar, JPMorgan Chase (JPM, -0.9%) reported second-quarter earnings of $5.75 per share, up 13.4% year over year but below analysts' estimates. JPM's revenue of $50.2 billion also fell short of expectations.

"JPMorgan had a rare miss against expectations," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. "Dimon called it another quarter of strong results, but gave few clues on the shortfall, which was partly securities losses, and he said the bank cut back on share repurchases in the quarter. The franchise still looks healthy, but the quality of the quarter was a step below what investors have come to expect."

Among the other big banks reporting, Wells Fargo (WFC, -3.1%) fell short on revenue, while Goldman Sachs (GS, -0.2%) and Citigroup (C, -5.6%) beat on both the top and bottom lines.

Bumble goes private in $1.3 billion deal

Bumble (BMBL) surged 56.6% today and is up 134% this week on news the dating app will be taken private by Ithaca Holdings in an all-cash deal valued at $1.3 billion.

The female-founded platform, which prioritized user safety, went public in 2021 and closed its first day with a market cap of $7.7 billion. It has been a downhill slide since then, with BMBL stock's current market value closer to $783 million.

"Bumble was founded on a simple belief: meaningful relationships are essential to a healthy, happy life. Today, that belief feels more important than ever," said Whitney Wolfe Herd, Bumble's founder and CEO, in the press release. "In Ithaca, we have found a partner who shares our vision, believes in our women-first mission, and is committed to investing in Bumble's future."

Inflation data is on deck

Earnings will remain in focus on Wednesday, with Bank of America (BAC, -1.1%) and Morgan Stanley (MS, -1.8%) among those reporting. But most of Wall Street's attention will be on the release of the September Consumer Price Index (CPI) report.

"The September CPI could determine whether the Fed's next hike is imminent, or simply still ahead," explain UBS Global Research economists. "An upside surprise, particularly in the core, could revive the October debate, both moving market pricing and influencing the decision itself," while a print closer to forecasts "would leave the Committee with room to wait."

According to CME Group FedWatch, futures traders are currently pricing in a 78% probability that the Federal Reserve keeps interest rates unchanged when it meets later this month. Odds for a December rate hike are at 70%.

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In mid-September, the Federal Reserve raised interest rates for the first time in three years. In its policy statement, the central bank stated that "inflation remains elevated," and the rate hike "will support a timelier return to the Committee's 2 percent goal."

The decision followed the August Consumer Price Index (CPI) report, which showed headline inflation was "uncomfortably high," explains David Payne, staff economist and reporter for The Kiplinger Letter. The pickup, he says, was driven by higher gas and fuel oil prices, shelter costs and airfares.

And with energy costs likely to stay elevated as the situation in the Middle East remains unresolved, Payne believes the annual CPI rate will end the year at 4%, while core CPI will be at 2.7%.

With another Fed meeting on the near-term horizon — the central bank will announce its next policy decision on Wednesday, October 28 — the release of the September CPI report is a key economic event we're tracking.

According to the Bureau of Labor Statistics (BLS), the CPI rose 0.6% from August to September and 3.7% year over year.

This is faster than the 0.4% monthly and 3.4% annual increases seen in August, with the year-over-year rate coming in above economists' estimate of a 3.6% rise.

"The index for gasoline rose 9.1 percent in September, accounting for over half of the monthly all items increase," according to the BLS. "The energy index increased 5.2 percent over the month following a 2.1-percent increase in August."

Shelter costs were higher, too, while food prices were unchanged.

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 rose 0.3% month over month in September, the same as in August. Year over year, core inflation was up 2.6%, faster than the 2.4% rise from the month prior.

Economists expected core CPI to rise 0.2% month over month and 2.5% year over year.

Prices for recreation, used cars and trucks, education, airline fares, medical care and apparel were higher, while communications costs were slightly lower.

With the September CPI report on the books, we looked at what economists, strategists and other Wall Street experts are saying about the data and what it means for the Fed and the economy. These outlooks, edited at times for brevity, are below.

What Wall Street thinks about the September CPI report

"Chairman Warsh advised market participants to focus on the trend and not the incremental data. September CPI leaves intact the upward trend in core prices over the last 6 months. At the margin, it bolsters the case for a hike at the October FOMC. However, we think the bigger picture is the balance of risks. The economy is growing strongly so the FOMC can place more emphasis on the inflation mandate." - Brad Conger, Chief Investment Officer at Hirtle & Co.

"Today's warmer core CPI release bolsters the case for additional rate hikes, but recent dovish Fed-speak from New York President Williams and Governor Jefferson suggests that the bar is high for an immediate hike. In our view, September's print was likely not sufficient for the Fed to execute back-to-back increases at the October FOMC meeting. The steady rise in long yields has increased corporate/consumer borrowing costs and tightened financial conditions alongside the Fed's move, meaning the bond market has been doing some of the heavy lifting for the Fed." - Jeff Schulze, Head Investment Strategist at Franklin Templeton Institute

"Wednesday's CPI was stronger than expected, and it's clear as ever that inflation is stubborn and moving in the wrong direction. The inflation uptick is likely to lead the Federal Reserve to start a rate-hiking cycle. While we expect the Fed to pause on any rate changes in October, we expect rate hikes to resume in December and continue until June 2026. The Fed will not tolerate inflation at these levels and will apply the same playbook as it did in 2022 to keep it in check with a series of interest rate increases." - Skyler Weinand, Chief Investment Officer at Regan Capital

"Today's CPI report came in hotter than expected with September headline rising 0.649% MoM and core CPI increasing 0.335% MoM, versus expectations of 0.58% and 0.21%, respectively. With underlying inflation failing to cool, the September rate hike now looks like a start rather than a final move, and expectations for further rate hikes have increased. The Fed will remain data-dependent, but the focus now turns to October 28, where a second consecutive hike is firmly on the table." - Dustin Thackeray, CFA, Head of Portfolio Management at Crewe Advisors

"In our view, today's print puts the Fed's tactical breather priced into the market for October in question. With $100-plus crude adding friction to already sticky core prices, the latest data increasingly complicates the disinflation narrative and may limit the Fed's flexibility." - Tim Urbanowicz, Chief Investment Strategist, Innovator ETFs from Goldman Sachs Asset Management

"CPI came in hot and it wasn't just fuel prices, as core inflation ran at a 3.7% annualized pace in September and 3.2% over three years. The only surprise is that investors keep getting surprised by broad-based inflation. And we've yet to see the full impact of higher diesel prices and the AI boom. Another Fed hike to 4.3% looks likely this year, but that's hardly restrictive enough to bring inflation down to 2%." - Sonu Varghese, Chief Market Strategist at Carson Group

"Inflation is cooking with gas. It is abundantly clear where the inflation impulse originates, but two wars need to end before we get any relief. The Federal Reserve made the mistake of calling COVID-era inflation transitory, and now it appears they are set to make the same mistake in reverse on the energy supply shock." - Jamie Cox, Managing Partner for Harris Financial Group

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