While Roth conversions are often talked about in retirement planning, they aren't the right strategy for everyone.

For retirees with modest savings and no pension, leaving traditional accounts untouched until it's time to start RMDs can work well. But retirees with pensions face an entirely different tax reality.

In a recent article, Joe F. Schmitz, a CFP® and CEO of Peak Retirement Planning, explains why Roth conversions are so important for retirees with pensions. Schmitz is a regular contributor to Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation.

Check out these five questions to test your knowledge about Roth conversions, pensions and taxes.

Good luck! (Don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

• Why a Roth Conversion Is Wrong for Most People But Often Right for Pension Holders
• When Is a Roth Conversion a Bad Idea? 6 Situations Retirees Should Consider Carefully
• If You're Converting to a Roth IRA, Don't Do It Like This
• 5 Reasons Roth Conversions and Pensions Work Well Together
• 7 Times to Dip Into Your Roth IRA if You Have a Pension (and When to Leave It Alone)

For decades, the traditional balanced portfolio has relied on stocks for growth and bonds for stability. The classic stock-and-bond allocation became the foundation of retirement investing because it offered investors a practical way to pursue long-term returns while managing risk.

But investing has evolved and today, we have access to solutions that didn't exist when the traditional portfolio was developed.

One product receiving increased attention is the registered index-linked annuity (RILA), prompting an important question: Should investors rethink whether traditional bond allocations are the only way to help manage portfolio risk?

The key is downside protection

Unlike bonds, which are influenced by interest rates and credit markets, a RILA may provide returns linked to the performance of a market index, such as the S&P 500, while providing a defined level of downside protection over a specified outcome period.

Many contracts today offer downside protection against the first 10% to 30% (or even 100% in some cases) of market losses over a six-year term while allowing investors to participate in the market's gains, subject to participation rates, upside caps or other contract provisions.

Protection features are subject to contract terms and limitations, and investors can still experience losses.

Portfolio construction should evolve as investment solutions evolve. For years, investors had two primary choices for long-term assets: Stocks for growth potential and bonds for stability.

Additional tools

Today, investors have additional tools that may deserve consideration depending on their objectives.

That shift has led many advisers to think less about replacing one investment with another and more about expanding the conversation. Whether a RILA, bond allocation or other strategy is appropriate depends on an investor's objectives, risk tolerance, liquidity needs, time horizon and tax circumstances.

Rather than viewing a portfolio as consisting of only two buckets (growth potential and stability), some advisers now view buffered investment strategies as a potential third category, positioned between traditional equities and fixed income.

Worth evaluating

For investors seeking growth potential with a predetermined level of downside protection, that middle ground could offer an alternative worth evaluating.

The goal isn't to declare that one investment is universally better than another. It's to ask whether the traditional portfolio deserves a fresh look.

Investors today have more choices than previous generations, and sometimes the best solution is one that didn't exist when conventional wisdom was established.

RILAs are not appropriate for everyone.

• Investors generally forgo dividends
• Upside returns may be limited by participation rates or caps
• Downside protection applies only according to the contract's terms only if the contract is held through the applicable outcome period

Most contracts also include surrender charges during the early years, and withdrawals from nonqualified contracts are generally taxed as ordinary income to the extent of earnings.

In addition, distributions taken before age 59½ may be subject to a 10% federal tax penalty unless an exception applies.

Bonds continue to play an important role for many investors by providing income, liquidity and diversification. The point is not that bonds have become obsolete. Rather, it is that today's investors have more choices for managing risk than they did a generation ago.

Perhaps the conversation is no longer simply about stocks vs bonds. Maybe it's time to consider whether modern portfolio construction includes a third bucket —one designed to bridge the gap between growth potential and downside protection. For many investors, that conversation may be long overdue.

Related Content

• Have a Negative Perception of Annuities? Consider RILAs and FIAs
• For Your Fixed-Income Pot, Consider an Annuity That Behaves Much Like a Bank CD
• I (Used to) Hate Annuities: Then I Looked at the Math
• The Truth About Annuities: The Question Isn't 'Are They Good or Bad?' It's 'Are They Appropriate for You?'
• Too Scared to Dive Into a Fixed-Rate Annuity? Interest Rates Make It Worth Dipping Your Toe In

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.

Living cheaply is the dream, but in 2026, high housing costs are often the reality.

Even after securing a home, many homeowners face recurring ownership expenses — like property taxes, utility bills, and sudden home insurance spikes — that come as a costly surprise.

Some relocate to a state without an income tax in search of financial relief. However, to offset the lack of a personal income tax, several states have steep sales taxes or heavy property tax bills. Others rely on natural resources, energy production, or tourism taxes to keep the burden off resident homeowners.

Below, we rank all nine states with no personal income tax by their homeowner cost score, ordered from most costly to least costly. Here's the result.

States that don't tax income ranked by home costs

To rank each state, Kiplinger combined three key homeownership expenses into a single weighted homeowner cost score:

• Property taxes (50% of the score): Using PropertyShark data (citing 5-year U.S. Census Bureau estimates), Kiplinger examined the median property tax bill. Because property taxes can be a homeowner's largest recurring bill (besides a mortgage), this metric makes up half of the state's total score.
• Utility bills (30% of the score): Using Move.org data, Kiplinger aggregated average annual costs for electricity, natural gas, water/sewer, and internet/TV. This accounts for nearly a third of the score.
• Home insurance costs (20% of the score): Using LendingTree data (sourced from Quadrant Information Services), Kiplinger analyzed average annual premiums for a standard policy with a $1,000 deductible.

To account for recent market conditions, scores also reflect present-day market adjustments, including coastal insurance spikes, heavy summer cooling demand, and remote freight/heating overhead.

9. New Hampshire: Low home insurance, high property taxes

Homeowner cost score: 155

Ranking as the most costly state on our list, New Hampshire incurs a weighted score of 155, driven primarily by exceptionally high property taxes. This is largely due to the Granite State's high effective property tax rate of 1.5% — well above the national average of around .90%, according to the Tax Foundation.

High costs: Lacking a state sales tax and state income tax, New Hampshire relies heavily on local property taxes to fund public services. Utility bills are also elevated (around 21% above the national average).

On the bright side: New Hampshire homeowners enjoy relatively low insurance costs due to minimal coastline exposure and stable climate risks. Plus, the state levies no state estate or inheritance tax, meaning family real estate can be passed down to heirs without a state "death tax."

8. Texas: High insurance costs for a no-income tax state

Homeowner cost score: 150

Texas ranks near the bottom for homeowner affordability due to high property tax rates and surging homeowners insurance. Texas homeowners pay high monthly housing costs that rank among the highest in the nation relative to local incomes, according to 2026 reports by Rice University's Kinder Institute for Urban Research.

High costs: Like New Hampshire, Texas relies on high effective property tax rates to fund local government (since there is no personal income tax). Simultaneously, severe weather risks drive up average annual homeowners insurance premiums substantially, along with high summer air-conditioning electric bills.

On the bright side: Residents age 65 and older can ease their tax burden through homestead exemptions that decrease assessed property values for school districts. Texas also charges no estate tax, preserving wealth for heirs and keeping select areas relatively affordable.

Related: 10 Cheapest Places to Live in Texas

7. Florida: Insurance crisis drives homeowner costs

Homeowner cost score: 103 to 155

Florida's score spans a wide range because homeowners insurance premiums vary widely by location. In inland counties, costs remain closer to national averages; in coastal zones, persistently high insurance rates push Florida toward the top of the overall unaffordability rankings, according to data from the Insurance Information Institute and LendingTree.

Related: 10 Cheapest Places to Live in Florida

High costs: While Florida's median property tax bill is moderate, homeowners insurance premiums have surged in recent years — often reaching $5,000 to $10,000 annually — due to increased hurricane risks and reinsurance spikes. Year-round air conditioning demands also drive up utility bills.

On the bright side: Florida offers a standard $50,000 homestead property tax exemption for primary residences (with expansions being considered on upcoming ballots). Florida also levies no state estate tax, which can potentially save heirs money.

See also: Florida Voters to Decide on $250,000 Property Tax Exemption

6. Alaska: High utility bills and low property tax burden

Homeowner cost score: 84 to 151

Alaska presents a unique financial landscape: while its vast rural boroughs are entirely free of property taxes, this benefit is confined to remote areas. For most residents, living in the state means balancing significant urban property taxes against extreme geography that triggers high utility and shipping costs, as highlighted in Move.org's annual utility report.

High costs: Alaska's annual utility bills are among the highest in the nation — with electric and heating bills running roughly 50% above the U.S. average due to harsh winters and remote fuel delivery.

On the bright side: Alaska homeowners enjoy low base insurance rates thanks to zero hurricane risk, and substantial state oil revenues eliminate state income and state-level sales taxes. Plus, Alaska pays eligible residents an annual Permanent Fund Dividend (PFD) check, offers a $150,000 homestead exemption for homeowners 65 and older, and charges no state estate tax.

5. Washington: Moderate utility bills, higher property tax

Homeowner cost score: 133

Washington lands in the middle tier of non-income-tax states. Although the Evergreen State levies no personal income tax on standard wages, high home prices drive up annual property tax bills, according to U.S. Census Bureau estimates.

High costs: Property tax bills exceed the national average because local municipalities rely considerably on property assessments for funding. Total utility costs are higher than average, and Washington levies a state tax on certain high-value capital gains in addition to a state estate tax capped at 20% (as well as a 9.9% Washington income tax starting 2028 for earners with more than $1 million).

On the bright side: Washington state homeowners insurance premiums remain 35% below the national average, per LendingTree data, even though some local premiums have climbed in recent years. Also, homeowners continue to benefit from lower electricity rates than most of the country, thanks to relatively cheap hydroelectric power.

Related: 10 Cheapest Places to Live in Washington

4. South Dakota: Near national averages for homeowner costs

Homeowner cost score: 102

South Dakota aligns closely with the weighted national baseline for recurring home bills, scoring about 2% above the U.S. average according to data from LendingTree and PropertyShark.

High costs: Severe Midwest weather, including frequent hail and tornado risks, drives home insurance premiums higher than the national average. However, despite the state's rural nature, everyday costs like groceries generally remain at or below the U.S. average due to a strong local agricultural economy.

On the bright side: Local property tax bills hover near or slightly below national midpoints, partially offset by state sales tax revenues. Renewable wind power and hydroelectric generation help keep utility costs manageable. South Dakota also offers a senior property tax assessment freeze for qualifying households and levies no state death tax.

3. Nevada: Relatively low taxes with seasonal utility shocks

Homeowner cost score: 100

Nevada can be tax-friendly for homeowners, but its final cost score depends greatly on the season.

High costs: Nevada summer heatwaves trigger utility bill surges that push utilities above average, while mild winters may help keep costs low. For this reason, peak summer bills can surpass the national average, even though recent statewide averages have dropped significantly below it, per Move.org and LendingTree.

On the bright side: Nevada limits annual tax growth through state-mandated property tax caps and a low assessment ratio. Additionally, weighty tourism tax revenue from millions of out-of-state visitors helps fund public infrastructure, keeping residential property taxes and insurance rates down. Nevada also has no state estate or inheritance tax, making it attractive for passing assets to heirs.

2. Wyoming: Below-average homeownership costs

Homeowner cost score: 96

Wyoming is the second-most affordable state without an income tax for homeowners, boasting property tax burdens up to 40% below the national average according to Tax Foundation property tax maps.

High costs: Rising energy prices have increased utility bills in Wyoming. Groceries and other essential goods can be more expensive in remote towns.

On the bright side: Like Alaska, Wyoming funds much of its state budget through natural resource extraction (coal, oil, and gas) rather than residential property taxes. Low base property taxes and reasonable insurance keep total carrying costs well below national midpoints. Wyoming charges no estate or inheritance taxes, which can preserve real estate value for future generations.

1. Tennessee: Lowest overall homeownership costs

Homeowner cost score: 95

Tennessee claims the #1 spot as the most affordable state for homeowners among those with no income tax. A combination of low property tax assessments and stable carrying costs gives the Volunteer State the lowest overall score, according to PropertyShark and Census data.

High costs: Home insurance rates have risen sharply in recent years, making Tennessee the 7th most expensive state for homeowners insurance, according to LendingTree. Tennessee also has one of the highest sales tax rates in the U.S..

On the bright side: Tennessee boasts some of the lowest average property tax rates in the nation. Plus, the overall cost of fixed housing overhead keeps recurring homeowner bills highly competitive compared to most other non-income-tax states. The state also has no estate tax and offers property tax relief programs for low-income seniors aged 65 and older — making some places in Tennessee cheap to live.

Read More

• 10 Can't-Miss Tax Breaks for Homeowners and Homebuyers
• States With the Lowest Property Tax Bills Ranked by Affordability
• Most Expensive States for Homeowners in 2026

Americans who are over the age of 55, mainly baby boomers, own more than half of the country's wealth. Over the next two decades, it will be passed down to the generations that follow, marking the greatest wealth transfer in our country's history.

While many of us look at inheritance as something purely for the wealthy, 66% of Americans either expect to or have already received an inheritance from their parents, according to a survey from Choice Mutual.

Receiving any kind of inheritance can be overwhelming, and being unprepared can lead to losing much of that money to poor financial decisions or taxes. If you think you may be a part of the Great Wealth Transfer, either as a provider or a beneficiary, here's how to avoid those pitfalls.

1. Start conversations now

One of the biggest issues with the trillions of dollars expected to be passed down during the Great Wealth Transfer isn't the money itself, but beneficiaries being unprepared to manage the assets they receive.

Although it may be uncomfortable, discussing the plan for these ahead of time helps family members know exactly how much they will receive and what taxes they might expect.

If beneficiaries don't have a chance to discuss the inheritance before their loved one passes away, they may end up making important decisions while they're grieving.

Bringing the topic up well beforehand will give them time to plan before their emotions take over, helping reduce the likelihood of poor decisions or impulsive spending.

Some of the most successful inheritances I have seen are among families who prioritize these conversations.

2. Avoid spending sprees

If you suddenly receive a windfall, it can be tempting to spend money on the things you've always dreamed of. You may want to buy a bigger house, a more expensive car or finally take that extravagant vacation. But going on a shopping spree can lead to disaster.

Your dream items will come with additional costs, such as taxes, insurance and maintenance, and those will stick around long after the initial purchase.

You should look at your inheritance as a long-term investment, not an excuse for a one-time splurge. If you have a good plan for the assets, they should help provide financial security for years.

Using the money to pay down any debts you have or starting an emergency fund is much more valuable than spending it on an asset that will eventually lose its value.

3. Consider tax implications

While the tax implications that come with an inheritance will depend on what you inherit and where you live, receiving an inheritance can trigger estate, capital gains, inheritance or income taxes.

For example, while many people may believe they will owe federal income taxes on any inherited money they receive, that may not be the case. Cash that is passed down from a person who has passed away is not considered taxable income for the beneficiary.

If you are gifted a property as an inheritance, receiving it is not taxed in most cases. However, depending on how you plan to use it, you need to consider a few things:

• Ongoing property taxes, insurance and maintenance costs
• Capital gains tax if the property value increases significantly before it is sold
• How you will use the property (personal, investment, rental) determines which tax deductions you can take

Most people don't have a full understanding of which processes will be triggered when estates are handed down. It's important to work with a financial professional before signing anything.

4. Build a strong team

Being part of the Great Wealth Transfer may be life-changing, but it could also be overwhelming. You may be faced with financial decisions you've never had to navigate before.

Having a strong team of professionals, such as a trusted financial adviser, tax professional or estate attorney, can help everyone involved avoid costly mistakes and create strategies that align with their goals.

A large inheritance is a life-changing event, and surrounding yourself with the right people can be the difference between enjoying it and watching it disappear.

Related Content

• Manage an Inheritance Like a Pro in Just Seven Steps
• Preparing for an Inheritance: Don't Let Your Blessing Become a Curse
• What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You Everything
• Four Things to Know About Managing a Loved One's Finances
• I'm a Financial Planner: Here's How to Make the Most of Your Charitable Giving on a Budget

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 ultra-wealthy don't just have more money than 62% of Americans. They have a handful of estate-planning secrets to help protect and pass on their wealth. From revocable trusts and Roth conversions to tax-efficient investments, these high-level tactics are designed to minimize taxes, shield assets, and create a lasting legacy.

And what a legacy. Baby boomers are expected to pass down $84.4 trillion to their heirs by 2045 as part of the "Great Wealth Transfer." Roughly half of that amount will come from high-net-worth and ultra-high-net-worth households. The good news? Many of the proven strategies used by these households can be adapted by retirees with modest incomes, without breaking the bank.

Matt Odgers, co-founder of Opelon LLP, says one of the biggest misconceptions is that estate planning is a tax strategy used only by the wealthy. "For most retirees, it has nothing to do with tax. What wealthy families are really buying is control and privacy; it's a clean handoff, and those things cost the same for everyone."

Here are 8 powerful estate planning secrets the rich actually use that you can realistically "steal."

1. The revocable living trust

The ultra-wealthy rarely let their assets go through probate. Instead, they place most of their major assets, including homes, investment accounts and other property, into a revocable living trust, Odgers says.

“The wealthy aren't leaning on a will. A will does not avoid probate, and probate is generally slow, public, and costly. A revocable living trust does the quiet work instead.”

How you steal it: Place major assets in a revocable living trust to avoid probate and allow a seamless transfer to your heirs. A living trust is flexible and can be set up easily with an attorney for about $400–$4,000. Then, “fund” the trust by transferring your house, bank accounts, and other assets into the trust’s name. Don't worry. The trust can be changed or revoked anytime during your lifetime, giving you full control while also protecting your family from the hassle of court delays and probate (and high fees) later.

2. The gift tax exclusion

The ultra-rich understand that making a gift or leaving their estate to their heirs doesn’t ordinarily affect their federal income tax, according to the IRS(pdf). With a bit of strategic planning, they avoid tax implications by using both the annual gift tax exclusion and the lifetime exemption, while shielding their wealth from future tax increases.

How you steal it: You don’t need to be rich to benefit from the annual gift tax exclusion. In 2026, you can gift up to $19,000 per recipient (child, grandchild or anyone else) completely tax-free. A retired couple can gift $38,000 per person annually. Over 10–15 years, this can move significant money out of your estate while helping your loved ones when they need it most.

3. Spousal Lifetime Access Trusts (SLATs)

A SLAT is an irrevocable trust that one spouse creates for the primary benefit of the other spouse. Ultra-wealthy couples use SLATs to remove assets from their estate while still allowing their spouse to receive income or even principal from the trust if needed during their lifetime.

How you steal it: Create an irrevocable trust for your spouse by transferring assets, such as cash, investments, or property, into the trust. That removes the assets from your taxable estate immediately. Your spouse can serve as a beneficiary and can access the funds if needed during their lifetime. This is particularly useful for retirees who want to shield their assets from the high costs of long-term care or future changes in tax law.

4. Life insurance

Permanent life insurance — either whole or universal life — is a favorite strategy among the wealthy because it passes money to heirs completely income tax-free. To maximize this benefit, high-net-worth families often avoid owning policies directly. Instead, they place them inside an Irrevocable Life Insurance Trust (ILIT). When structured properly, an ILIT keeps the death benefit out of the taxable estate, giving heirs tax-free cash to cover estate duties, debts or living expenses without forcing a fire sale of the family home or core assets.

How to steal it: Use permanent life insurance placed in an Irrevocable Life Insurance Trust (ILIT) to leave tax-free money to heirs while keeping it out of your taxable estate. You can often cover the premiums using your annual gift tax exclusion. In the end, you get to leave behind tax-free money for your family while protecting the assets you've worked so hard to build.

5. Family LLCs

By bundling assets — such as real estate or a family business — into a Family Limited Liability Company (Family LLC), the ultra-rich can transfer non-controlling shares to their heirs over time at a discounted valuation. This strategy lowers the gift's taxable value, preserving more of the owner's lifetime exemption and reducing future estate taxes.

How to steal it: Even with more modest assets, you can set up a Family LLC with the help of an estate planning attorney. But the main point is that anyone can benefit from holding assets in entities like trusts or family LLCs. “Heirs can secure access, enjoyment, and management without direct ownership,” says estate planning attorney Kevin Quinn, President at Legacy Counsellors, PC. “This structure shields wealth from creditors, divorces and lawsuits, while ensuring a structured legacy for future heirs.”

6. TOD and POD designations

Transfer-on-Death (TOD) and Payable-on-Death (POD) designations on brokerage accounts, bank accounts, certificates of deposit (CDs), and even some vehicles allow funds to be transferred directly to a beneficiary upon the account holder's death, bypassing probate. Many people overlook TOD and POD designations in estate planning — but not the wealthy.

How to steal it: Setting up TOD and POD designations on your accounts allows assets to transfer directly to beneficiaries upon your death, bypassing probate. Through your financial institution, you choose your assets, fill out a form and name your intended recipients.

However, because TOD and POD designations supersede instructions in a living trust, they must be carefully coordinated. For the best protection, complex assets like real estate are placed in the trust, while simpler accounts — such as checking, savings or CDs — can name the revocable trust as the TOD or POD beneficiary. This keeps your cash out of probate while ensuring every dollar is distributed according to your estate plan.

7. Roth IRA conversions

It's no surprise that the ultra-wealthy are obsessed with managing future taxes and carefully time their Roth conversions to pay taxes when the rate is lowest, giving their heirs tax-free money down the road.

How to steal it: Ryan Maynard, Managing Partner at Vaquero Private Wealth, offers this advice. “Convert traditional retirement money to a Roth during your low-income years — often the stretch after you stop working but before Social Security and required minimum distributions (RMDs) begin. In those years your taxable income can be unusually low, so you convert at a very low ordinary rate and move that money into a Roth, where it grows and comes out tax-free for the rest of your life and for your heirs.” This strategy works especially well for retirees with smaller nest eggs.

8. Long-term capital gains

The ultra-wealthy value long-term capital gains because they are taxed at much lower rates than ordinary income. By holding investments for more than one year, they can pay significantly less tax on their profits. Besides that, they can afford to hold assets for years or even decades because they don't have to rely on selling them to cover daily living expenses.

How to steal it: Try to hang onto your investments for at least a year before you sell them. You’ll often qualify for the lower long-term capital gains rates, which are usually 0%, 15%, or 20%, instead of getting hit with regular income tax rates. You don't need to be ultra-wealthy to take advantage of this. “It is one of the most valuable breaks in the tax code,” Odgers adds, “and it is not based on your estate size.”

Use the best strategies for you

You don't have to copy the ultra-wealthy exactly. Mixing and matching just a couple of these ideas can make a real difference and protect your savings, cut taxes, and leave more for the people you love.

Trent Von Ahsen, CFP®, and Managing Partner at Cedar Point Capital Partners, offers a final word. “There are clearly some differences, but I do think the biggest misconception about estate planning is that it's only for the ultra-wealthy. Affluent families may use some sophistication. But overall, I'd say the same underlying principles are available to basically anybody."

Related content

• 10 Things You Should Know About Estate Planning
• How to Save Money on Estate Planning
• What Does It Really Take to Retire Rich?
• The 13 Best Things Rich Retirees Do

Raising financially literate children requires intentionality. By making financial literacy a regular part of family life, parents can empower their kids to make informed, responsible financial decisions that will benefit them throughout their lives.

And that attitude helps your kids — and yourself — throughout all phases of raising children.

First, starting a family — maybe in your 20s or 30s — means a shift in both your lifestyle and your finances, but it also means that you are responsible for teaching your children good financial hygiene and money habits.

Later, your 40s often bring a unique blend of increased responsibilities and high earning potential, and you might find yourself balancing the financial and emotional needs of growing children with your own financial planning goals.

Finally, as your children approach their teen and young adulthood years, it is important that you set them up for success in college and beyond by building on earlier lessons.

Here are specific ideas for each stage.

Start talking to them about money when they're young

Start early and normalize talking about money. Begin as early as when they are 5 years old. Introduce age-appropriate financial activities that help them understand the value of money and how to manage it.

Making "money memories" with your kids is one way to educate them about financial responsibility while having fun: Giving them a piggy bank to learn about saving, practicing budgeting on family outings and celebrating savings wins are a few ways to teach kids about money, and they can also create positive memories.

Today's kids may never carry as much physical cash as adults, but they still need to understand the value of every dollar. Whether money lives in a wallet or on a phone, the habits of saving, spending intentionally and planning never change.

To help children recognize that continuity, openly discuss financial decisions and share your household budgeting process in simple terms.

Later, this foundation will help as children reach their teen years. You can encourage them to track their spending habits and get a part-time job or step into a small entrepreneurial venture.

Just like any skill, practicing good financial habits over time makes children more adept at managing money as they grow older.

Go digital, but don't ignore physical cash

I send my preteen daughter's allowance through Apple Pay because that is most likely how she'll interact with money as she gets older. It is important for her to learn how to make digital payments and manage her account in a world that continues to move toward "tap" or "double click" to pay.

This also teaches her independence and empowers her to make her own money decisions — and potentially money mistakes. I would rather have her make a $20 purchase that she regrets at age 12, than a $20,000 mistake when she's 22.

While embracing digital tools, I also intentionally use physical cash to teach my daughter about other financial concepts. We talk about where cash comes from and how to count it, and we take physical money to the bank to deposit into her savings account.

I want her to understand that the numbers on the screen in her Apple Wallet represent real dollars, and I want her to be comfortable managing her money both ways.

Teach them about trade-offs

Teens — like all of us — need to understand that every financial decision involves a trade-off. Spending money on one thing means that money won't be available for something else.

For example, buying the latest gaming console might mean saving less for a car, college or future experiences. This concept helps them prioritize and understand the long-term implications of their choices.

Help teens learn to resist the bombardment of messages promoting instant gratification and luxury, often amplified through social media. Help them differentiate between needs and wants, understand the true cost of things (including the impact of debt) and resist the pressure to keep up with trends.

Encourage them to use critical thinking about advertising and social media influencers and emphasize that a healthy money mindset often comes from smart choices and delayed gratification, not just outward displays of wealth.

If they're working, consider helping them open a Roth IRA to teach them about investing early. You should also discuss responsible credit use before they get their first credit card.

Don't stop when they get to college

The goal isn't to raise a child who can balance a checkbook — it's to raise a young adult who feels confident making financial decisions. That confidence comes from hundreds of small conversations and real-life experiences over many years, not one big lesson.

College provides a perfect context for in-depth discussions, both when saving and spending. It's never too early, or too late, to start saving for college.

If you anticipate that your child will contribute to the costs of their higher education, that's something to discuss earlier rather than later. That way, as they grow up, they'll have a full understanding of the plan.

Raising financially savvy children is more important than ever in today's fast-paced, digital world. Teaching your kids about the value of money and how to manage it responsibly can have a lasting impact on their future success.

Related Content

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• 4 Practical Ways to Prepare Your Children for Their Inheritance
• 3 Ages, 3 Money Lessons: A Parent's Guide to Raising Financially Savvy Kids
• The 7 Worst Assets to Leave Your Kids or Grandkids
• If You Want to Give Money to a Child in Your Family, Some Options Are Better Than Others

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.

Roth conversions have become one of the hottest topics in retirement planning. Browse financial headlines long enough, and you'll likely encounter conflicting advice.

Some experts argue that everyone should convert their traditional IRA to a Roth. Others insist it's a costly mistake. The truth is far more nuanced.

As a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that for most Americans, a Roth conversion probably isn't necessary. However, retirees with pensions often live by a different set of tax rules (I wrote a book for those with pensions, The 2% Club, that you can request for free here.)

Their guaranteed income can create tax challenges that don't apply to the average retiree, making Roth conversions worth a much closer look.

Before deciding whether a Roth conversion belongs in your retirement strategy, it's important to understand the factors that actually determine whether the math makes sense. You can learn more about this in my YouTube video:

The only question that really matters

Many investors focus on whether they can afford to pay the taxes on a Roth conversion today. While that's certainly part of the equation, it isn't the deciding factor. The more important question is this: Will your total tax rate be lower today than it will be later?

That "total tax rate" extends beyond your federal income tax bracket. A Roth conversion can also influence:

• State income taxes
• Medicare IRMAA surcharges
• Social Security taxation
• Capital gains taxes
• Estate planning outcomes

When viewed together, your true tax cost could look very different than your federal bracket alone suggests.

Why most people don't need a Roth conversion

For many retirees, taxable income will naturally decline when they stop working. Someone who retires with modest retirement savings, no pension and Social Security as their primary income source usually remains in relatively low tax brackets throughout retirement.

In those situations, paying taxes today through a Roth conversion could result in paying more tax than necessary.

Roth conversions are frequently overpromoted, as they can be powerful, but they aren't universally beneficial.

Pension holders face a different tax reality

Rather than seeing their income in retirement decline, retirees with pensions often have multiple sources of guaranteed retirement income arriving simultaneously:

• Pension payments
• Social Security benefits
• Required minimum distributions (RMDs) from traditional retirement accounts

Each source adds taxable income, and together they can keep retirees in higher tax brackets for decades.

For households that have accumulated substantial balances in tax-deferred accounts, such as 401(k)s, IRAs, TSPs or 403(b)s, RMDs can make the situation even more challenging as they grow over time.

That's why many pension recipients find themselves paying as much, if not more, in taxes during retirement than they did while working.

Today's tax environment creates planning opportunities

Another consideration is today's tax landscape: Current tax laws provide relatively favorable tax rates and expanded standard deductions compared with historical norms.

While no one can predict future legislation, many economists expect government revenue needs to increase over time because of rising national debt and the long-term funding challenges facing programs such as Medicare and Social Security.

If future tax rates eventually rise, converting portions of traditional retirement accounts while rates remain relatively low could produce meaningful lifetime tax savings. The objective isn't simply to pay taxes sooner, but to pay them when they're expected to be lower than they otherwise would be.

Don't look only at your tax bracket

One of the biggest mistakes retirees make is evaluating Roth conversions using only the federal tax tables. Your retirement tax picture is much more interconnected.

Increasing taxable income through a Roth conversion could:

• Cause more of your Social Security benefits to become taxable
• Push you into a higher Medicare IRMAA bracket, increasing Medicare Part B and Part D premiums
• Raise your capital gains tax rate
• Increase state income taxes

This is why comprehensive tax planning frequently produces better results than simply converting up to the top of a particular tax bracket.

The widow's penalty can create future tax problems

Married couples regularly overlook one significant future risk: When one spouse dies, the surviving spouse generally transitions from married filing jointly to single tax status. At that time:

• Tax brackets and IRMAA thresholds shrink
• The standard deduction lowers
• One Social Security benefit typically disappears
• The surviving spouse often continues receiving pension income and RMDs

The result can be substantially higher taxes for the surviving spouse. Completing Roth conversions while both spouses are alive allows couples to take advantage of the wider married tax brackets before this transition occurs.

Your children's tax situations matter, too

If leaving money to your children is one of your goals, their future tax bracket deserves consideration as well.

Under current law, most non-spouse beneficiaries must empty inherited retirement accounts within 10 years. A child inheriting a large traditional IRA might be required to recognize hundreds of thousands of dollars of taxable income during that period, potentially pushing them into significantly higher tax brackets.

On the other hand, if your children are likely to remain in relatively low tax brackets, leaving them traditional retirement assets instead of paying higher taxes through Roth conversions today could prove more efficient.

Estate planning isn't one-size-fits-all, and understanding your heirs' financial circumstances is an important part of the analysis.

Tax diversification provides flexibility

Many retirees have accumulated the vast majority of their wealth inside tax-deferred retirement accounts, and that creates a challenge. Every dollar withdrawn becomes taxable income, leaving retirees with limited flexibility when tax laws or personal circumstances change.

Building assets across multiple account types — including traditional retirement accounts, Roth accounts and taxable brokerage accounts — creates what many planners call tax diversification.

Having multiple "tax buckets" allows retirees to decide where retirement income comes from each year, making it easier to adapt to changing tax laws, Medicare thresholds or unexpected expenses.

Where you live can affect the timing

State taxes can also influence whether a Roth conversion makes sense. Someone planning to relocate from a high-income-tax state to one with no state income tax could benefit from delaying Roth conversions until after the move.

Conversely, someone expecting to move into a higher-tax state might decide to accelerate conversions before relocating.

State taxes generally receive less attention in planning than federal taxes, but they can meaningfully affect lifetime tax costs.

A common Roth conversion myth

One objection frequently raised against Roth conversions is that paying taxes today means losing years of investment growth. That argument overlooks an important concept: Taxes on a traditional IRA already represent a future liability.

Paying that liability earlier doesn't necessarily reduce long-term wealth if tax rates remain unchanged — it simply satisfies the government's share sooner.

Where Roth conversions can create additional value is by reducing future RMDs, potentially lowering Medicare premiums, limiting Social Security taxation, providing greater withdrawal flexibility and protecting against higher future tax rates.

The comparison isn't simply about investment growth — it's about maximizing what you keep after taxes over the course of retirement.

The bottom line

Roth conversions aren't appropriate for everyone. In fact, many retirees with modest savings and no pensions might be better off leaving their traditional retirement accounts untouched.

Pension holders, however, ordinarily face a different reality. Guaranteed income, RMDs and long retirement horizons can create tax burdens that make proactive planning far more valuable.

Rather than asking whether Roth conversions are "good" or "bad," ask a better question: Will paying taxes today likely cost less than paying them later?

For retirees with pensions and substantial retirement savings, the answer is often worth exploring through a comprehensive, long-term tax strategy that considers not only income taxes but also Medicare premiums, Social Security taxation, estate planning and future tax flexibility.

Because when it comes to retirement, it's not just about how much you've saved — it's about how much you'll ultimately keep.

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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.

Annette Kruzynski, a 79-year-old retiree from West Hempstead, N.Y., used to think her 401(k) survived the dot-com bust, the Great Recession and the COVID pandemic because she moved all her money to cash. She proudly told anyone that being in CDs, bonds and money market accounts saved her from the massive sell-offs in the stock market.

But in hindsight, she knows she was wrong. "I wish I didn't keep everything safe," says the retiree and grandmother of five. "I think if I had invested, I would have had much more money saved."

Kruzynski can't change the past, but she and other retirees can help future generations avoid similar mistakes, particularly their millennial children, the oldest of whom are turning 45 this year.

It's a prime age to take your finances seriously and, more importantly, hear some sage advice. At this point, you're typically in the peak earning years (or about to enter them) and still have time to build a nest egg. You're also likely juggling multiple expenses, making it difficult to save.

"In your 40s is where everything starts to become a priority, and those priorities for spending are competing with each other," says Pam Krueger, founder and CEO of Wealthramp, a free service that matches consumers with fee-only fiduciary financial advisers. "This is where money decisions start to have bigger consequences."

Today’s 45-year-olds may think they have it all figured out, but the retirees who have come before them know better. Having learned the hard way, these older adults want to spare the younger generation the pain, knowing that preserving family wealth starts with avoiding costly mistakes. Whether it's investing, saving, or spending, here are the crucial, hard-earned lessons retirees and financial professionals say 45-year-olds need to know.

Investing: Siloed accounts and too much risk

Even if 45-year-olds have figured it out by now and are contributing to their 401(k)s and IRAs, financial pros say some common mistakes still linger, including these:

Viewing your retirement accounts in silos. Treating your and your spouse's different retirement accounts as separate, standalone investments rather than a unified portfolio could result in additional fees or overexposure to a single market segment. "You might not have diversification, you might pay three times in fees or your returns may be beaten down because you didn't coordinate," says Krueger. "It's important to clean up, organize and have a clear view of the accounts consolidated in one place."

Taking on too much risk or being too conservative. This might be the age of the buy-and-hold Millennial, but there are plenty of 45-year-olds investing in crypto, meme stocks or other speculative investments. "People buying the next hot, shiny thing and taking unnecessary risk is the worst action I see, especially with retirement money," says Derrick Longo, a financial adviser at Savant Wealth Management in Huntersville, N.C. "A lot of people will hear something on social media or from a friend, and they let that influence their investment strategy. They might get a short bump, but in the long term, it doesn't keep up with market returns."

If you want to make speculative investments, Longo says, do it with money you can afford to lose. On the flip side, taking too little risk can also be detrimental to a 45-year-old's investment portfolio. With 20-plus years left in the workforce, a 45-year-old can afford to have more growth — and more risk — in their 401(k) than a 55- or 60-year-old.

Having been a little too conservative is one thing Sharon and Roger Gibbs wish they could change. The married retirees worked for the state of California for over 30 years and retired in their mid-50s. "Thinking back to age 45, we probably should have been more of a risk taker, but we’re pretty conservative. We regret not renting out a cabin vs selling it at one point," says Sharon, 73, who lives with Roger in Watersound, Fla. "But, for us, our jobs were our investment for our future. We were told by so many people, ‘If you can retire early, do it; you never know what tomorrow brings.’ "

Saving: Standing still on contributions and matches

In the age of the automatic 401(k) enrollment, many 45-year-olds don't have a choice when it comes to saving for retirement, granted that they work for a company that offers one. But that doesn't mean they don't make costly mistakes. One is not contributing enough to get the company's 401(k) match. That's free money they're leaving on the table.

Another mistake is leaving their contribution rate steady instead of automatically increasing it. Most plans offer the ability to automatically increase your savings rate by 1% each year. You can also have your plan increase contributions when you receive raises and bonuses.

Failing to save more aggressively is one of Kruzynski's primary regrets. In addition to being too conservative, she wishes she had contributed more to her 401(k). She worked for over 30 years, and while she has enough money to live comfortably in retirement, she could have had more cash to travel and to leave to her heirs. "Not adding more money to my 401(k) was a mistake," says Kruzynski.

Spending: Living on the edge with a 40-something budget

Many retirees remember all too well how managing their spending in their mid-40s was a constant exercise in discipline. Between paying down mortgages and funding children's educations, a multitude of expenses pull at the household budget all at once. When trying to manage it all, it was easy to make mistakes. A big one that throws everything else off course is winging it, says Michael Conrath, JPMorgan's chief retirement strategist. They have a vague idea of their monthly expenses and savings goals, but nothing concrete.

"On the fundamental level, they need to ask themselves, how much do I spend monthly, what are my known expenses and what do they cost me?" said Conrath. "It's important to have that foundation."

Lots of 40-somethings also live beyond their means, worrying about saving later. "They tend to believe they will keep earning the same amount they are right now and when you make that assumption, you might go for the bigger house or the bigger and better car," says Krueger. "You're living on the edge of your budget instead of putting that money to work."

The view from the finish line

Making sense of money in your 40s is a balancing act with the financial realities of spending and saving pulling you in different directions. While the oldest Millennials may feel they have plenty of time to fine-tune their investing, saving, and spending strategies, retirement will arrive before they know it. That's why it's so important for them to listen to the hard-earned lessons of the retirees who came before them. After all, sharing their lessons on unified investing, disciplined spending and aggressive saving is the best way to protect everyone's wealth.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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In April, the IRS and the Department of the Treasury released Revenue Procedure 2026-12. Here's what it means in plain English: The federal government handed state governors the official playbook, and the official map, for nominating the next generation of Opportunity Zones.

When the One Big Beautiful Bill Act (OBBBA) made Opportunity Zones permanent in July 2025, the industry had to wait nine months for the guidelines to be released.

Here are five things I think every investor with significant capital gains needs to understand.

1. We know exactly which communities are eligible

Revenue Procedure 2026-12 doesn't just describe the nomination process. It identifies, by name and by census tract, every community in America that qualifies for Opportunity Zone designation in 2027.

The number? 25,332 population census tracts across the United States, the District of Columbia and U.S. territories. Every single one of them meets the definition of a low-income community under the updated rules of the OBBBA.

The IRS formally adopted the 2020-2024 American Community Survey five-year dataset as the controlling data source for determining eligibility — locking in the methodology and removing any ambiguity about which tracts qualify and which don't.

Not all 25,332 tracts will become Opportunity Zones. Governors can nominate up to only 25% of their state's eligible tracts. But investors and developers are no longer guessing which tracts are eligible to be nominated.

2. Rural America is a bigger part of the story than ever

Of those 25,332 eligible tracts, 8,334 are classified as fully rural. That's roughly one out of every three eligible communities.

This matters for two reasons. First, the OBBBA created powerful new incentives specifically for rural Opportunity Zone investments. Investors in Qualified Rural Opportunity Funds receive a 30% basis step-up after five years, triple the standard 10%, and rural properties benefit from a reduced substantial improvement threshold of just 50% instead of 100%.

These aren't minor tweaks — they fundamentally change the math on deals that wouldn't have penciled out under the original program.

Second, the law requires that states give rural communities meaningful representation in their nominations. With a third of all eligible tracts classified as rural, governors will have both the incentive and the inventory to direct capital into parts of the country that have historically been overlooked by institutional investors.

For those of us who believe Opportunity Zones should be about real economic development in communities that genuinely need it, this is encouraging news.

3. The clock is ticking

Here's the timeline every investor should have on their calendar.

The nomination window opened on July 1, 2026. State governors — along with the mayor of Washington, D.C., and territorial executives — have less than 45 days to submit their nominated census tracts to the Treasury Department.

That puts the initial deadline at September 28, 2026, with a provision for a single 30-day extension that could push final submissions to October 28.

One important detail from the new guidance: States can submit and revise their nominations multiple times during the window, and nominations filed early in the window aren't processed until the window closes. In other words, this isn't a race to gain first-mover advantage — it's a thoughtful, deliberative process designed to arrive at the best possible outcome.

If you're a developer or community leader trying to make the case for a particular tract, you have a genuine window to advocate right up until the deadline.

After the nomination window closes, Treasury will review and certify the selections. The IRS has indicated it expects to publish the final designated Opportunity Zones before January 1, 2027, the date the new OZ 2.0 map officially takes effect.

Treasury has also announced that it will roll out online tools and resources to help state officials with the nomination process, which should make this round smoother than the sometimes chaotic 2018 experience.

But here's what I want you to take away: If you're an investor or a fund manager, you don't have the luxury of waiting until the final map drops in December.

The smart money is positioning now, identifying likely zones, building relationships with developers and local officials and structuring deals to be ready to deploy capital the moment the new designations go live.

4. Fewer zones, fixed boundaries and more competition for the best deals

One thing that sometimes gets lost in the excitement is this: OZ 2.0 will almost certainly have fewer designated Opportunity Zones than OZ 1.0.

Under the original program, there were 8,764 designated zones. Industry estimates suggest the new round will produce roughly 6,300 to 6,500, a reduction of about 25%.

That's because the eligibility rules are tighter:

• The median family income threshold dropped from 80% to 70%
• The contiguous tract loophole (which allowed some higher-income areas to qualify under OZ 1.0) has been eliminated
• Tracts that qualify based on high poverty rates are now disqualified if their median family income exceeds 125% of the area median

Here's something else the new guidance confirms that should matter to anyone doing long-horizon underwriting: The OZ 2.0 tract boundaries are drawn from the 2020 decennial census map and are set in stone for the entire decade the designation is active, which is January 1, 2027, through December 31, 2036.

No redrawing of lines. No splitting of tracts. No adjustments of any kind. Whatever map gets certified in late 2026 is the map for the next 10 years. That's the kind of certainty that serious investors and fund sponsors can build a strategy around.

Fewer zones do not mean fewer opportunities. It means the zones that do get designated are more likely to be genuinely distressed communities where investment capital can make a real difference. But it also means that the best deals in the best locations are going to attract more competition. Early movers will have a meaningful advantage.

5. Puerto Rico investors: Your timeline is different

If you have Opportunity Zone money in Puerto Rico, this one's for you, and it may come as a surprise.

Most investors know that the original OZ 1.0 designations across the 50 states run through December 31, 2028. What many don't realize is that Puerto Rico has always operated on its own schedule.

Back in 2018, the Bipartisan Budget Act gave the island a unique deal: Every eligible tract was automatically designated as an Opportunity Zone, and that designation was backdated to the passage of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017. That was a full year before most states received their designations.

Both parts of that unique deal are now history.

A 10-year clock that started in December 2017 doesn't end in December 2028. It ends in December 2027. The new guidance makes this point clearly, and that gives Puerto Rico investors one less year than they may have been counting on.

In addition, Puerto Rico will play by the same rules as everyone else going forward: No more automatic island-wide coverage. The governor will nominate up to 25% of eligible tracts, just like every other state.

That's a dramatic reduction in scope for a territory where nearly all census tracts were previously designated.

If you have exposure to Puerto Rico in your OZ portfolio, now is the time to review and make sure your timeline assumptions still hold up.

What all of this means for you

If you have unrealized capital gains — whether from real estate, a business sale, stock or any other appreciated asset — and you've been thinking about Opportunity Zone investing, the new guidelines should sharpen your focus.

The OZ 2.0 framework is no longer theoretical. The eligible tracts are published. The timeline is set. The boundaries are locked. And the enhanced benefits, especially for rural investments, are some of the most generous tax incentives the federal government has ever offered.

This is the starting gun. The investors who do their due diligence now, not in January 2027, will be the ones best positioned to capture the full power of what OZ 2.0 has to offer.

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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.

Power outages are more than inconvenient; for homes relying on medical equipment, they're a safety risk. Additionally, there's another, quieter crisis hitting homes: The 116% surge in electricity costs over the past 25 years.

To illustrate, the average electricity rate in August of 2000 was 0.091 cents per kWh. In July of 2026, that rate increased to 0.197 cents per kWh, according to the Federal Reserve Bank of St. Louis.

For many homeowners, the conversation around solar use circles back to a single metric: The financial return on investment. However, if you're looking at the next chapter of your life, the true value of these systems extends far beyond a monthly electric bill. It represents building a resilient homestead and moving away from reliance on an outdated and overtaxed grid.

How homeowners can prepare for an unreliable grid

The reality is we are relying on an electrical grid built over 100 years ago. Dr. Michael Stadler, an expert in energy systems and the Chief Technology Officer at Xendee, told Kiplinger this will become increasingly problematic as demand from climate change and AI data centers increases.

The Department of Energy released a report last year titled Report on Evaluating U.S. Grid Reliability and Security. It warns that blackouts could increase one hundredfold in 2030 if the US continues to shutter reliable power sources and doesn't add more firm capacity.

Reliability on an aging network is a cost issue. Most importantly, it's a stability issue too. If you're a homeowner, this creates an almost must-have shift away from traditional means to energy sovereignty. A solar and battery system can serve as an insurance policy, ensuring your home remains powered and secure even with increasing blackouts.

How to make your home more energy independent

One of the shifts is seeing homeowners move away from passive consumption, where you rely on your electric utility/supplier for power, to self-sufficient hubs. Using photovoltaics (PV) and battery storage means you've created a localized microgrid.

This has several advantages for your home's journey toward energy independence. It means that when rolling blackouts or power outages occur, your home will retain power since it isn't relying on the grid. And you can sell your excess power (offsets or net metering) to your local energy company if your state laws allow.

What's more, smart control systems make it easy to manage power. It optimizes how you use and store electricity, and when to sell it, based on real-time grid needs. Dr. Stadler recommends selling offsets during peak demand, when you're likely to earn more for them. This automation not only helps you optimize earnings, but it also protects your home for years to come.

Is the ROI worth it?

While these systems require a significant initial investment, usually in the $20,000 to $40,000 range, federal tax incentives, such as the Clean Electricity Investment Credit, provide a six percent tax credit on the qualified investment. Dr. Stadler notes that if your current rate is at or above 20 cents per kWh, the economics of installing such a system become increasingly favorable.

Keep in mind that your electric rate is only one component of your bill. In my case, I found that the transmission/delivery fee is almost half of what I pay. With solar, the excess energy gained and sold could help offset these delivery fees while reducing your energy reliance on the grid, bringing down costs even more.

Another consideration is that solar is clean energy. In some cases, the energy you receive from your electric company can be dirty. Dirty electricity can take the form of high-voltage spikes, harmonic distortions and surges that, over time, can shorten the lifespan of your appliances and electronics.

Is your home ready for a microgrid?

Keep in mind that not every home will be an ideal fit for a microgrid. Use this checklist to evaluate whether your home has the elements required for a successful transition:

• Roof health: Make sure your roof shingles and structure are in good shape since solar panels last 25 to 35 years. If not, you'll need to budget for a new roof.
• Sun exposure: Does your home have obstructions such as large trees or neighboring buildings that cast ample shade? This might limit its effectiveness.
• Energy use: Examine the last year of utility bills to determine your average kWh monthly. This is essential for choosing the right-sized system for your home.
• Local regulations: Read up on your state's net-metering policies. Some homeowners associations might also have restrictions on where you place panels.
• Critical load: Determine which appliances you want on during an outage, as this will decide the battery storage system size you need.

Taking these considerations into account can help you determine if your home is ready for a microgrid.

Ultimately, investing in solar isn't only about reducing your electricity bills; it's about building a resilient, energy-efficient asset. Solar is becoming an essential home improvement that secures your property's independence in a future where grid reliability isn't guaranteed.

Making your home more energy independent can be a significant investment. A financial professional can help you build a plan for upgrades such as solar and battery storage while balancing them with your other financial priorities.

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

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Some of the saddest meetings I have aren't with couples. They're the ones where a client comes to see me for the first time after losing their spouse.

After nearly 30 years as a financial adviser, I've noticed a pattern. In most marriages, one spouse becomes the family's de facto chief financial officer. They know where the accounts are, when the required minimum distributions begin and why certain beneficiaries were chosen. The other spouse understands the big picture, but not always the details.

When the spouse who handled the finances passes away, the survivor isn't just grieving. They're suddenly responsible for a financial life they may never have expected to manage, often while well-meaning family members and financial institutions are pushing them to act fast.

In my experience, the families who fare best aren't the ones who move the fastest. They're the ones who slow down and think it through.

Resist the urge to do everything immediately

Aside from getting certified death certificates and handling immediate household needs, very few financial decisions have to be made in the first few weeks.

I've watched surviving spouses notify every financial institution within days of a death, only to find out that a pension payment, dividend check or insurance reimbursement is still coming payable to the deceased spouse.

Once an account is restricted, negotiating that payment gets far more complicated than it needs to be.

Gather information first. Meet with your financial adviser, CPA and estate planning attorney before making decisions that could be difficult or impossible to reverse.

Your beneficiary designations just changed

Retirement accounts, annuities and life insurance policies pass according to their beneficiary forms, not your will or trust. That makes them one of the first things worth reviewing.

I often see clients who named their living trust as the beneficiary years ago. Depending on your situation, naming individual beneficiaries instead can be simpler for your heirs to administer.

There's no universal right answer here, which is exactly why it deserves a real conversation with your adviser and attorney rather than a quick assumption.

Don't let the widow's tax catch you off guard

Here's a planning window most people miss: For the year your spouse dies, you can still file as married filing jointly. The following year, you'll typically file as single, where the tax brackets are considerably less favorable. Advisers call this the "widow's tax" or the "widow's penalty."

That one-year gap can be an opportunity to convert some, or all, of a traditional IRA to a Roth IRA while you still qualify for the wider joint-filer brackets. The catch is timing: The conversion generally has to be done by December 31 of the year your spouse passed away. If your spouse dies later in the year, that window shrinks fast.

Don't make this decision in isolation. The 2025 tax law changes, including the new $6,000 deduction for older people and the updated SALT deduction, can change the math on a Roth conversion. Loop in your CPA before you convert a dollar.

Don't rush into a spousal rollover

I see this more than almost any other misstep: A surviving spouse moves an inherited IRA into their own IRA right away because it feels like the obvious next step. Sometimes it is. Often, it isn't.

There's no deadline requiring a spousal rollover. If you're younger than 59½ and need access to retirement money, distributions from your own IRA are generally hit with a 10% early withdrawal penalty.

Distributions from an inherited IRA owned by a surviving spouse generally avoid that penalty. Once you complete the rollover, that flexibility is gone. Wait until you actually know which option fits your situation.

Give your estate plan a second look

Your estate plan was written for a different chapter of your life. Have your attorney review your living trust, power of attorney, HIPAA authorization and healthcare directive to confirm the people you named are still the right people.

If your trust is older, it may require setting up a bypass, or "B," trust when the first spouse dies. That provision made sense when the federal estate tax exemption was much lower.

Now that the exemption has been raised to $15 million per individual in 2026, many families no longer need that structure, and keeping everything in the A trust may be simpler if your estate falls under that threshold.

This is a decision to make with your attorney, not on your own.

Have the family conversation

One of the best things you can leave your family isn't money. It's clarity.

I encourage clients to hold a family meeting after losing a spouse. You don't have to share account balances. Just let your family know where your documents are, who your advisers are and how your estate plan works.

This is also a good time to start passing along personal items that carry meaning. If your late spouse loved fishing, the family member who shares that passion might treasure the gear now more than they would years from now.

My goal for every client is simple: When the surviving spouse eventually passes, I don't want their kids searching for account numbers and passwords. I want them focused on the life that was lived, not a scavenger hunt for the paperwork behind it.

Losing a spouse changes your finances as much as it changes your life. The families who come through it in the best shape aren't the ones who acted fastest. They're the ones who took a breath, asked the right questions and made each decision on its own timeline.

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

Most of my clients hate paying taxes. That part is universal. But what I've noticed over years of helping high-net-worth families with tax planning is that the instinct to avoid taxes today often leads to paying significantly more of them tomorrow.

The pattern shows up consistently: A client prefers to draw first from Roth accounts or taxable brokerage accounts, which are taxed at favorable capital gains rates, to avoid touching their IRA or 401(k) for as long as possible. It feels like a win. They've deferred taxes.

But when you model it out over 20 or 30 years of retirement, that approach often increases the cumulative tax burden, because they haven't spread withdrawals across tax brackets in a way that keeps their taxable income in check year after year.

That's what happens when you optimize for April instead of the next two decades.

Why deadlines are the enemy of good tax planning

When tax planning happens only in the fourth quarter, or in the final days of December, it may limit available strategies.

First, there's a logistical problem: Custodians can't guarantee that transactions such as qualified charitable distributions (QCDs), donor-advised fund (DAF) contributions or Roth conversions will settle before year-end if you wait until the last minute. A missed deadline isn't a tax strategy, it's a penalty.

Second, and more importantly, you lose flexibility. Many tax-saving moves depend on timing relative to market conditions, income fluctuations and life circumstances. Gifting appreciated shares to charity, for instance, is far more impactful when a stock has just jumped on an earnings report than when you're scrambling in December.

The difference between gifting 10 shares at $80 vs $88 per share, a 10% move that translates directly into a larger charitable deduction and greater tax savings, is an opportunity you can only capture if you're watching for it throughout the year.

Four strategies that require time to be effective

Some of the most effective tax moves cannot be executed well in a single tax season. Four stand out, and each one requires years, not months, to deliver.

1. Roth conversions in the low-income window.

For clients who retire before claiming Social Security, there's often a window, of about five to 10 years, when taxable income drops considerably.

Converting IRA or 401(k) funds to a Roth account during this window, at the 12% or 22% bracket rather than the 32% or higher rate that may apply once Social Security and required minimum distributions (RMDs) kick in, may produce meaningful lifetime tax savings, depending on individual income levels, bracket projections and future tax law changes.

This is cash flow modeling at its most useful: Mapping out conversion amounts year by year rather than deciding in isolation.

2. Coordinated charitable giving.

Bunching charitable deductions into a high-income year, such as one marked by a significant portfolio rebalance or a large Roth conversion, can be far more effective than spreading gifts evenly.

When income spikes irregularly, charitable giving becomes a natural offset. Planning this in advance, rather than reacting after the income event has already occurred, is what separates intentional strategy from coincidence.

3. Inherited IRA management under the SECURE Act.

For clients who inherit an IRA, the old "stretch" provision that allowed distributions over a lifetime is largely gone. Most beneficiaries now have a 10-year window to deplete the account. The planning question is when, within that window, to take distributions.

Consider a client who inherits an IRA two years before retirement and is still earning a full income. Depending on their income trajectory and tax bracket, delaying those withdrawals until after they stop working, while still within the 10-year depletion period, could shift distributions into meaningfully lower tax years.

4. Portfolio transitions for clients with embedded gains.

When a client comes in holding a portfolio of highly appreciated securities, triggering all of those gains in year one is rarely the right answer. A better approach recognizes those gains gradually over two, three or more tax years, spreading the burden while moving toward a better-diversified portfolio.

This requires a long-range view of the tax cost, not a reflex to get everything repositioned quickly.

Where investment decisions and tax strategy meet

Paying capital gains taxes is not inherently bad. It means your investments have grown. The risk of staying in a concentrated position that may no longer outperform can be far greater than the tax cost of diversifying.

We see clients hold individual company stock well past the point where it makes portfolio sense, purely to avoid a capital gains bill. That's a case where the tax tail is wagging the investment dog.

The better goal is minimizing taxes without compromising portfolio quality and diversification. Strategies such as tax-loss harvesting, asset location and direct indexing are genuine tools, but they work best as optimizations on top of a sound plan, not as substitutes for one.

Three steps to explore before your next tax season

If you've been taking a reactive approach, here are three places to start looking for opportunities:

1. Pull out your 2025 tax return and look for surprises.

Were there large distributions you didn't anticipate? Did you end up in a higher bracket than expected? Are there tax-advantaged accounts you could be contributing more to?

2. Identify any irregular income on the horizon.

Equity compensation, a business sale, a liquidity event, a large one-time expense: Each of these is a planning opportunity, and the earlier you can model the tax implications, the more options you have.

Once the income has already hit your return, many of the best strategies are off the table.

3. Get organized before you need to be.

One of the biggest sources of tax-season friction is simply not knowing where things are: Prior returns, IRS PINs, cost basis records, charitable contribution receipts.

Building a simple reference document for your annual tax prep reduces stress and makes it far easier to execute time-sensitive strategies without scrambling.

Taxes are unavoidable. But the total taxes paid over a lifetime of retirement are not fixed. They're shaped by decisions made years in advance, at the right income levels, in the right accounts, in the right sequence. That's a long game worth playing.

Related Content

• 4 Smart Ways to Use Your Tax Return for Financial Planning
• The September 15 Tax Conversation You Should Be Having Right Now
• After Decades of Investing, Your Biggest Winner May Now Be Your Biggest Risk
• A 2026 Tax Playbook for High Earners: Stealth Taxes and Strategic Wins
• A Confident Retirement Starts With These Four Strategies

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

By now, the fall tuition bill has landed, and for a lot of families the numbers don't close the way they used to. That isn't your imagination.

The federal borrowing caps that took effect on July 1 set a ceiling on Parent PLUS for the first time at $20,000 a year and $65,000 over the life of a student.

They also ended Grad PLUS for new borrowers. The loan that quietly filled whatever grants and federal aid left behind now runs out sooner.

Private lending is already a $140 billion market, about 8% of all student debt, according to industry data from Enterval. Analysts expect private loan volume to climb sharply this year as families move to cover the difference.

So here you are, maybe taking out a private loan for the first time, with a payment deadline days away. The textbook advice was to shop these loans back in May or June. That window has closed, but the situation isn't an emergency yet. Private loans have no fixed federal deadline and can still disburse into the fall term.

What you can't afford is to let the clock stampede you into the first offer that clears the bill. A little thought now will save you years of paying for a rushed choice.

First, make sure you have hit the federal ceiling

Before you sign anything private, confirm you have used every available federal dollar, because federal loans offer protections, such as income-driven repayment, forgiveness programs and deferment options, that private lenders rarely match.

Understanding these benefits helps families weigh the true cost and safety of each option.

Review each step deliberately. Make sure the student has accepted their full federal loan amount first. Then look at what Parent PLUS still allows under the new caps, because even a capped PLUS loan keeps federal features that a private loan might not offer.

A private loan should only fill the gap that remains. Borrow that figure, not a dollar more. A federal-versus-private loan comparison (like the one on CollegeLens, the website that I founded) can help you confirm you're filling a real gap rather than replacing cheaper, safer money.

Get a fixed rate unless you have a specific reason not to

A variable rate will almost always look cheaper on the day you apply. That is the point of it, and it is also the trap. A rate advertised at 3.99% variable can climb to 8% or 9% if benchmark rates rise, and this is a loan you may be repaying for a decade or more.

A fixed rate locks in your cost for the life of the loan. For a bill you're financing over many years, the certainty is worth more than a low teaser number. Unless you plan to pay the loan off fast and can absorb a jump, fixed is the safer call.

Understand what a cosigner really signs up for

Most students need a cosigner to qualify, and most cosigners don't fully register what they're agreeing to. If you cosign for your child, you're not vouching for them. You're equally on the hook. The debt shows up on your credit report; a missed payment is a missed payment, and it can sit on your record for years.

You're also not unusual in needing one. Cosigners are the norm in this market, not the exception. Industry data from Enterval shows cosigner rates have remained above 85% every year since 2009.

In the most recently reported quarter, more than 94% of newly originated private loans carried a cosigner, including almost 97% of undergraduate loans. If a lender is willing to lend to your student at all, it is usually because someone with established credit is standing behind the loan.

This is where the fine print earns its keep. Look for a cosigner release — the provision that lets you come off the loan once the student has made a stretch of on-time payments, often around 12 months, and can qualify on their own.

Some lenders offer it, and others don't; the terms vary widely. If two offers are close on rate, the one with a clean, achievable cosigner release is the better loan.

The trade you are actually making

It is helpful to understand what you give up when moving from federal to private loans, especially since private loans typically lack income-driven repayment options. Payments do not flex with income drops, and deferment or forbearance are limited and lender-specific.

Knowing these limitations can make you feel more cautious and prepared to weigh the risks involved.

None of that makes a private loan a bad choice. For a family with strong credit, it can be a perfectly reasonable way to close a real gap, and the rate can even beat a federal loan in some cases.

The point is to go in knowing the trade rather than discovering it later. If you have read my earlier columns, you will recognize the theme: The mistake is rarely the loan itself. It is borrowing on autopilot because you were busy.

Here's a short checklist for before you sign:

• Confirm the student has accepted all federal loans first, then measure the true remaining gap.
• Borrow only that gap. Resist rounding up for a cushion you will pay interest on for years.
• Choose a fixed rate unless you have a concrete plan to pay it off quickly.
• Compare at least two or three lenders on rate, fees and cosigner release, not just the first approval.
• Read the deferment and forbearance terms so you know your options if income drops.

The bigger picture

The federal safety net for college borrowing shrank this summer, and the private market is stepping into the gap it left. That isn't automatically bad news, but it does shift more of the responsibility onto you to shop well.

The deadline on your desk is real. It is also the exact moment a lender's job gets easier, and yours gets harder.

So slow down by one notch, even now. Fill the gap you actually have, lock in a rate you can live with, protect whoever is cosigning, and know the protections you are trading away.

Do that and a private loan becomes a deliberate piece of a plan instead of the thing you grabbed because the bill was due on Friday.

Related Content

• The Right Way and the Wrong Way to Use a 529 Plan That Doesn't Cover the Full Cost of College
• How to Budget for College Expenses Beyond Tuition
• How Grandparents Can Help with Education Expenses
• The FAFSA Quietly Got Friendlier and Stricter This Year: Will Your Family Win or Lose?
• 529 Plans Beat Trump Accounts for College Savings, But It Makes Sense to Have Both: Here's Why

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

When navigating a divorce, securing your fair share of retirement assets is critical — especially if you're over 50 and short on time to rebuild lost savings. While a divorce decree officially ends your marriage, it cannot legally divide a 401(k) or pension on its own. Without a properly executed Qualified Domestic Relations Order (QDRO), the funds stay locked in your ex-spouse’s name, putting your hard-earned financial future at risk.

Whether you are currently negotiating a divorce agreement or reviewing finalized paperwork, knowing how QDROs work is your best defense against costly court delays and lost growth.

Take this 10-question quiz to see if your retirement plan division strategy is secure. And don't worry if you miss an answer; you can use the links below the quiz to brush up on divorce and retirement planning.

More on Divorce and Estate Planning, from the Kiplinger retirement team:

• The New Average Divorce Rate By Age: Are You in the Risk Zone?
• How QDROs Can Protect Your Retirement Savings in a Divorce
• Six Reasons to Disinherit Someone and How to Do It
• How Finances Are Split In a Gray Divorce
• What Drives Gray Divorce?
• A Retirement Guide for Solo Agers
• Why Single Retirees Have It Better Than You Think

In early 2026, Wall Street decided enterprise software companies — also known as SaaS companies, which stands for Software as a Service — were going to die.

Traders at Jefferies coined it the "SaaSpocalypse," a roughly $2 trillion wipeout across enterprise software stocks built on a single, simple and terrifying idea: If artificial intelligence (AI) agents can do the work that software seats enable, nobody needs the seats anymore. If 10 AI agents can do the work of 100 sales reps, you don't need 100 CRM licenses — you need 10.

That's a 90% haircut to a business model the entire SaaS industry was built on, and for a few violent months, the market priced it in across the board — in good businesses and bad ones alike. The mood was sell first, ask questions later.

For many of the names, the market was right to sell. HubSpot (HUBS), Atlassian (TEAM), and ZoomInfo (GTM) were the textbook cases. These companies offered tools for small and medium-sized businesses (SMB) with low switching costs, doing exactly the kind of mechanical, repeatable work an AI agent handles natively, with no meaningful data moat to defend the seat count.

Those stocks got hit and mostly stayed hit, because the bear case wasn't a panic — it was a correct read of the business.

But the five stocks below are the other half of the story: names that got dragged down by the same indiscriminate selling, and then did something the market didn't initially price in; they turned AI adoption into their biggest growth driver instead of their biggest threat.

They didn't survive SaaSmageddon by hiding from the AI disruption narrative. They survived by hijacking it, and in some cases by more than doubling off their 2026 lows.

Here's the snapshot, then the breakdown, survivor by survivor. Data is as of August 24, 2026.

CrowdStrike: The cleanest flip

• Share price: $190.67
• Market value: $194.1 billion
• Next catalyst: Fiscal 2027 Q2 earnings on Wednesday, August 26

How it got caught: CrowdStrike (CRWD) was as exposed as anyone to SaaSmageddon logic on paper — a premium-multiple, subscription-based security platform, exactly the profile the panic targeted first. Shares fell as low as $85.68 this year before the turn.

The flip: CrowdStrike is the cleanest example of a stock that got dragged into the panic and then personally rewrote the narrative. CEO George Kurtz reframed AI cybersecurity risk on two tracks: enterprises need cybersecurity to deploy AI safely in the first place, and AI itself is creating entirely new "greenfield attack surfaces" — neoclouds, GPU clusters, agentic workloads — that didn't exist a few years ago. Both tracks point in the same direction: more spend on CrowdStrike's Falcon platform, not less.

On the June earnings call, Kurtz connected the dots even more explicitly, tying the timing of Anthropic's Mythos model launch directly to the acceleration in enterprise security buying he was seeing in his own pipeline.

The numbers back it up. CrowdStrike posted record net-new ARR (annual recurring revenue) of $255.8 million in its fiscal 2027 first quarter (+32% year over year), pushing the company's year-ending ARR to $5.51 billion, up 24% from the year prior.

Falcon Flex accounts — the company's land-and-expand subscription model — now exceed $1.9 billion, more than double where they stood a year ago.

The cybersecurity stock is up roughly 63% year to date, and briefly touched an intraday record above $227 in mid-August. Plus, the company's Fal.Con 2026, its annual user conference, sold out faster than any prior year — a small but telling demand signal ahead of its late-August earnings print.

The outlook: Wall Street sees CrowdStrike revenues rising 23% in fiscal 2027, another 22% in fiscal 2028, 21% in fiscal 2029, and 21% again in fiscal 2030 — so this is a durable 20% revenue grower.

EBITDA (earnings before interest, taxes, depreciation and amortization) margins are also expected to expand from the high-20s to the low-30s in the next few years, so we're talking a 25%+ compounded EBITDA grower here.

The valuation isn't cheap (107 times forward EBITDA estimates), but that multiple makes sense for a high-growth, wide-moat SaaSmageddon survivor. Estimates keep rising, and the chart looks great, so this one likely keeps powering higher.

Palo Alto Networks: The platform play

• Share price: $350.89
• Market Cap: $285.3 billion
• Next catalyst: Fiscal Q4 earnings on Tuesday, September 1

How it got caught: Palo Alto Networks (PANW) fell to $139.57 this year during the broader software drawdown, dragged alongside its cybersecurity peers even though its underlying growth never actually broke stride. PANW is a case study in how indiscriminate the SaaSmageddon selling really was.

The flip: Where CrowdStrike sells best-of-breed point protection, Palo Alto sells consolidation — the pitch being that large enterprises don't want to manage a dozen security vendors when AI has already made their attack surface more complex.

Palo Alto CEO Nikesh Arora has been direct about it: frontier AI compresses attack timelines from months to minutes, which raises the value of an integrated platform rather than lowering it. That's the same SaaSmageddon-flip logic as CrowdStrike, delivered through a bundling strategy rather than a best-in-class one.

Jefferies analyst Joseph Gallo captured the broader dynamic well, noting that investors are rotating toward large-scale platform leaders seen as more resilient amid AI-driven disintermediation, rather than smaller point solutions.

Next-gen security ARR reached $8.1 billion in fiscal Q3, up 60% year over year, with remaining performance obligations up 36% to $18.4 billion — a better read on forward demand than any single quarter of revenue.

The stock is up 90% year to date and has outpaced even CrowdStrike's run over the same stretch.

The outlook: Much like CrowdStrike, Palo Alto Networks is set up as a roughly 25% compounded EBITDA grower over the next several years, powered by low-20s revenue growth and mild EBITDA margin expansion.

But its valuation is much more attractive than CrowdStrike, with PANW trading at just 62 times forward EBITDA for a similar high-growth, wide-moat company profile. If CrowdStrike looked good, Palo Alto Networks arguably looks great.

Axon Enterprise: The wild card

• Share price: $597.28
• Market value: $48.5 billion
• Next catalyst: Reported Q2 earnings on August 5; its next print is in early November

How it got caught: Axon Enterprise (AXON) isn't cybersecurity — it's public-safety SaaS, i.e., emergency dispatch, incident reporting and so on — and that's exactly why its inclusion here matters: it proves the survivor pattern isn't sector-specific.

We flagged Axon ourselves back in the depths of the panic as showing "technical weakness plus SaaSmageddon risk," and shares bottomed at $339.01 this year before the AI story took over the narrative entirely.

The flip: Axon's AI Era Plan initiative bundles Draft One (AI report writing), real-time translation, and redaction tools on top of its core TASER and body-camera hardware. It has pushed premium per-officer pricing from $99 a year in 2017 to $569 a year today, with the AI Era Plan alone adding $199 per user annually.

AI product revenue grew over 700% year-over-year in Q1, AI bookings were up 140%, and Chief Financial Officer Brittany Bagley noted more than a third of software revenue now comes from offerings beyond the core Evidence platform. Real-world traction backs the pitch: Rowlett Police Department reported a 75% cut in evidence-redaction time, and Fort Collins PD saw a 67% reduction in related workload.

The second quarter, reported on August 5, delivered the company's 10th consecutive quarter of 30%+ top-line growth, with revenue up 35% to $904.3 million and full-year guidance raised to 32% to 34% growth, backed by $15.1 billion in future contracted bookings.

Shares jumped as much as 17.8% on the guidance raise, and counter-drone subsidiary Dedrone crossed $100 million in revenue for the first time, with bookings there up 500% year over year.

The outlook: Axon has sustained 30%+ revenue growth every year since 2022. With new AI products in the mix, we don't see any reason why that would change going forward. Coupled with continued albeit mild EBITDA margin expansion from economies of scale and pricing power — Axon is the only game in town for a lot of their products — this is a 40%+ compounded EBITDA grower for the next several years.

And that is fantastic growth profile for a tech stock that is now just trading at 43 times forward EBITDA – one of its lowest valuation multiples of the last five years. Of all the SaaSmageddon survivors, AXON may be the most attractively undervalued.

Snowflake: Not a reversal, but a reset

• Share price: $322.78
• Market value: $111.98 billion
• Next catalyst: Fiscal 2027 Q2 earnings on Wednesday, September 2

How it got caught: The bear case for Snowflake (SNOW) during SaaSmageddon was structurally the scariest of the five: the idea that AI would let enterprises query their own data directly, cutting the data warehouse out of the loop entirely. Shares fell to $118.30 this year on that fear before the recovery began.

The flip: What actually happened is close to the opposite: Snowflake made itself the governance layer AI agents need to run safely on enterprise data, rather than something those agents route around.

Adoption of Snowflake's Cortex AI solution is the tell — roughly 9,100 accounts now use Snowflake AI, up from 7,300 last quarter, and Snowflake Intelligence (its agentic AI product) nearly doubled its customer base to 2,500.

The newly launched Cortex AI Gateway extends that further, positioning Snowflake as the control point for how enterprises authenticate, secure, and manage cost across both first- and third-party AI agents — a governance pitch that got a boost in late July and early August as partners Alteryx, Aembit and 1Password integrated directly into the ecosystem.

The underlying numbers have been consistently strong: product revenue of $1.3 billion in the most recently reported quarter (+34% year over year), remaining performance obligations of $9.2 billion (+38%), net revenue retention stabilized at 126%, and 779 customers now generating more than $1 million in trailing 12-month product revenue, up 29% year over year. Management's own long-range narrative projects $10.1 billion in revenue and $792.7 million in earnings by 2029.

Shares are up 22% in the past month alone.

The outlook: Earnings-per-share (EPS) estimates on Snowflake have been flying since analysts realized this is an AI winner. Since the start of the year, Snowflake's consensus fiscal 2027 EPS estimates are up 20%. Consensus FY2028 EPS estimates have also risen 20%.

Into 2030, Wall Street now sees Snowflake growing revenues at a steady 25%+ clip, with EBITDA margins rising from 17% this year to 22% by the end of decade, for an EBITDA compounded annual growth rate of nearly 33%.

That is a great growth profile, and it more than compensates for the rich valuation multiple here (99 times forward EBITDA estimates), especially since estimates keep rising and the growth profile keeps getting better.

SNOW stock looks good for the rest of the year — and beyond.

Rubrik: The direct Anthropic play

• Share price: $98.04
• Market value: $20.2 billion
• Next catalyst: Fiscal 2027 Q2 on Thursday, August 27

How it got caught: Rubrik (RBRK) is the smallest name here, and it fell the hardest in relative terms — down to $42.25 this year, a level that reflected both SaaSmageddon-era selling and its own pre-profitability, GAAP-loss-making profile. This made it an easy target once the market decided to punish anything unprofitable and subscription-based at once.

The flip: Rubrik is also the most direct Anthropic tie-in. The company has genuine access to Claude's Mythos Research Preview through Project Glasswing (an Anthropic security project), using it for AI-powered vulnerability detection. And it has integrated Rubrik Agent Cloud with Amazon Bedrock AgentCore.

Like CrowdStrike and Palo Alto, Rubrik's pitch is that AI adoption makes data resilience and identity protection more essential, not less — reinforced by its Agent Identity product, which manages and controls AI agents' access.

CEO Bipul Sinha has been explicit that the company sees itself less as a backup vendor now and more as the "security and AI operations" company.

Fiscal 2027 Q1 results showed 39% year-over-year revenue growth to $387.1 million and subscription ARR up 32% to $1.57 billion, with net revenue retention above 120% and record net-new ARR.

Loop Capital initiated coverage on the AI stock with a Buy rating and $100 target on August 4; KeyBanc raised its target to $100 on July 16; BMO raised to $98 on July 10; and BTIG lifted its target to $109 from $91. That's four separate price-target increases in about a month, all landing in a tight $98–$109 band just above the current price.

The outlook: The top-line momentum here is indisputable (this is a steady low-to-mid-20s revenue grower with a long runway ahead), but the most impressive thing about RBRK is how they are using AI to dramatically improve efficiency and internal margins.

This was a company that was running consistent losses until recently. And now, it is reporting positive EBITDA, profits and free cash flow, with all of them scaling rapidly (free cash flow is expected to rise about 40% this year and another roughly 40% next year).

This massively successful profitability ramp is exactly the sort of story that Wall Street will latch onto amidst SaaSmageddon fears — and it is why RBRK stock should continue to head higher.

The bottom line on these SaaSmageddon survivors

SaaSmageddon wasn't wrong about the threat — AI genuinely is changing how enterprise software gets bought and used.

It was wrong to assume every seat-based company would be a casualty of that change instead of a beneficiary.

CrowdStrike, Palo Alto, Axon, Snowflake and Rubrik all found the same escape hatch: make the platform the thing that makes AI safe, governed or actionable, and the seat count stops mattering as much as the platform does. Meanwhile, the names that didn't find that escape hatch — HubSpot, Atlassian, ZoomInfo among them — are the control group. They prove the difference wasn't luck. It was whether the business model had a second act available at all.

Related content

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• Artificial Intelligence is Raising Cyber Threats
• AI Giants Face New Price Competition
• Nvidia Earnings: Live Updates and Commentary August 2026
• 5 Questions About SpaceX’s Computer Chip Ambitions

Retirement is supposed to be a time to kick back and unwind, so who can blame you for not having everything figured out? Big decisions — like whether to age in place, work part-time, or pass on wealth while living — often feel like choices that can wait. After all, retirement can last 30 years, giving you plenty of time to mull things over.

Or does it?

According to Farnoosh Torabi, financial strategist and host of the So Money podcast, endless rumination can actually trigger a retirement shortfall.

"It's the refusal to change anything until life forces it upon us," Torabi told Kiplinger in an exclusive interview. "We remain in a house that no longer serves us. The estate plan remains unreviewed or untouched, and the conversation with adult kids never quite happens."

The root of this inertia varies. For some, it’s emotional avoidance — facing these decisions can feel like confronting one's own mortality, Torabi notes. For others, it's sheer procrastination. After all, who wants to update a will when you could plan a bucket-list trip instead?

Either way, delaying these key moves can cost serious cash and jeopardize your financial security down the road.

The hidden financial penalty of inaction

Take your home, for starters. Delaying downsizing means property taxes, upkeep, utilities, and maintenance will quietly eat into your retirement savings. Plus, if bedrooms are upstairs or hallways are too narrow for limited mobility, you could face costly emergency renovations down the road.

The same goes for an outdated estate plan, which can lead to probate delays, unexpected taxes, or assets going to the wrong heirs entirely.

Pushing off these decisions often turns manageable choices into costly emergencies.

"When the crisis finally hits — be it a fall, a diagnosis, or a partner's decline — decisions that could have been made calmly get made in a panic. You sell your home fast. You move into care you didn't shop around for," she said. "Denial comes at a cost."

Build your retirement 'dream team' before a crisis hits

To keep curveballs from throwing your retirement off course, Torabi recommends tackling these choices head-on while you are still in control. A great first step is realizing you don't have to do it alone and that everyone from your adult children to financial advisors can help map out the next 10 to 20 years.

To stay ahead of potential issues, have conversations with your adult kids now, revisit your estate plan regularly, and consult with real estate, tax, and financial professionals. A local agent can help you evaluate what your home is worth now versus in the future, as well as the tax implications of selling. Meanwhile, a trusted financial adviser can craft a withdrawal strategy that matches your lifestyle.

"Think about building your team early, when you don't need them yet," Torabi says. "That includes a financial planner, an estate planning attorney, and a real estate agent who knows your local market."

And if the scope of it all feels overwhelming? Start small. "Before you downsize your life, downsize one closet," Torabi says.

The runner-up mistake: retiring your earnings potential too soon

Many people nearing retirement view the transition as a finish line — the end of both their careers and their income. They did their job, saved up, and can finally stop working. But according to Torabi, that assumption is actually the runner-up biggest retirement mistake.

"While many of us are so tired of working long hours by our 60s, let's not throw the proverbial baby out with the bathwater," she says. "We're living longer than any generation before us, which is great, but it also means our money needs to stretch further."

Continuing to earn even a small income in retirement gives your existing savings more time to compound, while providing a buffer against inflation at the grocery store and gas pump.

Working in retirement isn't just a financial play, either. Staying engaged provides a sense of purpose that studies link to lower rates of depression, reduced heart attack risk, and longer lifespans. Ultimately, better overall health translates directly to lower medical bills.

"Purpose is not a nice-to-have in your retirement; it's practically preventive medicine," Torabi says. "My advice is not to view retirement as the end of work. It can mean the start of work on your own terms. Think: consulting, mentoring, teaching, or turning a hobby into modest income."

Don't wait for the crisis to force your hand

Whether you are already retired or approaching the finish line, letting hesitation or denial paralyze your planning can undermine both your quality of life and your nest egg.

Take some advice from Torabi and don't wait for a crisis to force your hand. By taking proactive steps today, you can protect your savings, maintain your independence, and ensure your retirement is defined by choice, not financial regret.

Editor's note: This article is part of an ongoing series in which we ask influential personal finance figures to share their opinion on the biggest retirement mistake you can make. Other articles feature Suze Orman, Dave Ramsey, Grant Cardone and Ramit Sethi.

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"If you're hoping to retire someday, invest and start early."

Many of us have probably heard this, and it's true. However, investment accounts are only part of a comprehensive financial plan. Many people mistakenly believe contributing to a 401(k), IRA or brokerage account means they have a plan in place.

However, those accounts are just tools. The actual plan is a road map for how those tools should be used to help achieve financial goals.

In addition to making retirement savings contributions, a lot of people review their portfolio statements periodically, largely focusing on balances, returns and performance.

These statements are great for providing a snapshot of where your investments stand, but they don't explain how they'll be used to help you achieve your goals.

For example, two individuals can have identical portfolios with very different strategies. Someone who's planning to retire in the next few years will likely have different risk considerations and income needs compared with someone who is still decades away from retirement.

Rather than focusing on balances and returns, it's the financial plan that helps determine whether those investments align with your needs and circumstances.

Don't forget tax planning

Tax planning is another area in which portfolio statements fall short. They can tell you what type of accounts you're invested in, but they don't explain how withdrawals will be taxed or whether your money is in the appropriate account based on your situation.

Since investment accounts are taxed differently, where money is saved and how it's taken out can significantly impact your tax burden.

With a well-rounded financial plan, pre-retirees have the ability to understand how assets are intended to be distributed across retirement accounts and how withdrawals can be managed to reduce tax liabilities.

Adapting to changes

Unlike a portfolio statement, financial plans are designed to adapt to changes in your life rather than changes in the market.

Major life events such as a new job, marriage, the birth of a child or approaching retirement influence financial priorities, oftentimes requiring updates to an existing strategy.

A person's goals and spending habits can also change throughout retirement. The early years of retirement, also known as the go-go years, might mean traveling or taking on new experiences.

As the slow-go and no-go years approach, priorities tend to shift, especially when it comes to healthcare. However, financial planning doesn't stop when retirement hits.

Although a portfolio statement might list beneficiaries, it doesn't account for greater estate planning needs. Some people might want to leave assets to children or grandchildren, while others might decide to donate to charity or set specific guidelines for how their wealth should be distributed.

A financial plan helps make sure those wishes are incorporated into your overall strategy.

Paying attention to investment returns is important, but they're only one piece of the pie. A portfolio statement can give you a snapshot of current beneficiaries, various retirement accounts, and current investment performance.

It's the plan that helps determine whether those investments support your financial goals.

Related Content

• Does Your Retirement Portfolio Resemble a Junk Drawer? Here's How to Clean It Up, From a Wealth Manager
• Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial Adviser
• 4 Great Tools to DIY Your Own Financial Plan
• 5 Do's and Don'ts for a Successful First Meeting With Your Financial Adviser
• I'm a Financial Adviser: This Is the Retirement Tax Assumption That Could Cost You

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

If you’ve inherited a house, you’re not alone. Data show that 38% of people in the U.S. report real estate as part of their past or expected inheritance.

But once the deed is in your hands, you’re probably wondering what comes next. Beyond deciding whether to keep it, sell it, or rent it, there’s one almost universal question: What are the tax implications?

There's good news: Inheriting a house doesn’t automatically mean you’ll owe taxes to the IRS or your state. But what happens next depends on several factors, including whether you decide to sell the property and how the step-up in basis affects your tax bill.

Here’s more of what you need to know.

What happens with taxes if you inherit a house

Inheriting a house doesn’t automatically trigger federal taxes. Instead, you’ll need to decide what to do with the property. Whether you sell it, keep it, or turn it into a rental, each option can have different tax implications.

One of the most important tax rules for inherited property is the step-up in basis. A home’s basis is the amount the IRS uses as the starting point for calculating capital gains tax.

Think of the home’s basis like a car’s trip odometer. Resetting the trip odometer doesn’t erase the miles already driven. Instead, it creates a new starting point, tracking only the miles driven from that point forward.

• When you inherit a home, the IRS generally measures your gain from the home’s fair market value on the date of death instead of what the previous owner originally paid.
• The step-up in basis doesn’t change what the house is worth. It changes where the IRS starts measuring your gain.

For example, your parents bought a home decades ago for $150,000. By the time you inherit it, it’s worth $700,000. If you later sell the home for $750,000, your taxable gain would be $50,000, not $600,000.

That’s because your taxable gain is based on the appreciation that occurred after you inherited the home, not when your parents owned it.

Selling, keeping, or renting inherited property

Selling an inherited home is often one of the biggest financial decisions you’ll make after inheriting property. A Real Estate Inheritance Report from Trust & Will finds that 56% of heirs choose to sell an inherited home, making it the most common path forward.

• Fortunately, you won’t pay capital gains tax on the difference between what the original owner paid for the home and its fair market value when you inherited it. Instead, the IRS uses the home’s stepped-up basis as the starting point for calculating your taxable gain.
• That means when you sell, you’ll owe capital gains tax only on any appreciation that occurs after you inherit the home.
• If you sell the home soon after inheriting it for about its fair market value, your taxable gain may be minimal.

What if you decide to keep the house? Keeping an inherited home doesn’t create an immediate federal tax bill. You’ll still be responsible for ongoing costs like property taxes, homeowners insurance, and maintenance. If you eventually decide to sell the home, the stepped-up basis will determine how your capital gains are calculated.

Some beneficiaries—roughly 17%—decide to turn an inherited home into a rental property. If you do, rental income is typically taxable. You may also be able to deduct certain expenses related to the property.

Depending on your situation, you might qualify to claim depreciation, which can affect both your annual taxes and your capital gains calculation if you eventually sell.

Estate and inheritance tax considerations

If you’ve inherited a house, you may also be wondering whether you’ll owe inheritance tax or estate tax.

For most families, the answer is no.

The federal government doesn’t impose an inheritance tax, and only a handful of states do. Furthermore, the federal lifetime estate and gift tax threshold sits at $15 million per individual ($30 million for married couples), meaning it generally applies only to exceptionally large estates.

Whether either tax applies depends on factors like the overall size of the estate, where the deceased lived, and state law.

Where you live matters with inheritance

While federal tax rules dominate the conversation, state-level rules can create unexpected financial surprises. But the baseline rule is the same: Nearly all state tax codes conform to the federal step-up in basis, resetting the property's starting value to its fair market value on the date of death for state capital gains purposes.

However, state rules diverge from IRS rules in several key areas:

State Capital Gains Rates: If you hold the home and sell it after it appreciates further, any post-inheritance gain is subject to state income tax alongside federal capital gains tax.

In high-tax states like California, New York, or Minnesota, state capital gains tax rates can add 8% to 13%+ to your tax bill.

State Inheritance and Estate Taxes: Five states—Pennsylvania, New Jersey, Maryland, Kentucky, and Nebraska—levy a state inheritance tax on certain heirs.

Additionally, twelve states and Washington, D.C. enforce state estate taxes with exemptions far lower than the federal threshold—in places like Oregon or Rhode Island, kicking in on estates valued as low as $1 million or $1.8 million.

Local Property Tax Reassessments: In some jurisdictions, transferring title triggers a local property tax reassessment. The capped property tax rate the previous owner enjoyed could reset to current fair market value, significantly increasing annual holding costs.

Key questions to consider before making a decision

Before deciding whether to sell, keep, or rent an inherited home, take time to evaluate a few financial factors:

• What is the home’s official stepped-up valuation? Securing a professional, independent appraisal as of the date of death establishes your baseline basis and protects you if you sell later.
• Can you afford the ongoing carrying costs? If you plan to keep the home, calculate the true cost of holding it — including updated local property taxes, insurance premiums, utilities, and deferred maintenance.
• Are there co-heirs or sibling dynamics to navigate? If you inherit with siblings, clarify whether everyone agrees on selling or keeping the property, or if one party needs to buy out the others.
• What are the local property tax reassessment rules? Check with the local tax assessor to see if transferring title triggers an immediate tax reassessment that could increase annual property taxes.

Inheriting a home: Frequently asked questions

Tax laws are complex, and every beneficiary's tax situation is unique. The information provided here is for general educational and informational purposes only and does not constitute formal tax, financial, or legal advice. Be sure to consult a qualified tax professional, CPA, or estate planner to evaluate your specific circumstances before making any financial decisions.

Do you automatically pay taxes when you inherit a house?

No. Inheriting a house by itself won’t trigger federal taxes. Taxes may arise later depending on what you do with the property.

Can you sell an inherited house immediately?

Generally, yes. Many beneficiaries sell an inherited home shortly after probate or once they have the legal authority to do so. However, the timing depends on the estate administration process and state law, so consult a trusted professional to understand any timing restrictions that may apply to your situation.

How is capital gains tax calculated on an inherited house?

In many cases, capital gains are calculated using the stepped-up basis, meaning the home’s fair market value on the date of death becomes the starting point for measuring future gain.

What if I inherit a house with my siblings?

If you inherit a house with your siblings, you may become co-owners of the property. Together, you’ll need to decide whether to keep the home, sell it, or rent it out. If you sell the home, each beneficiary’s share of any capital gain is based on their ownership interest and the home’s stepped-up basis.

Can I live in an inherited house without paying taxes?

Usually, yes. Moving into an inherited home doesn’t automatically create a federal tax bill. However, you’ll likely become responsible for ongoing expenses like property taxes, homeowners insurance, and maintenance.

If you later sell the home, your taxes will depend on the selling price and your stepped-up basis.

What if the house was held in a trust?

It depends on the type of trust. Many homes held in a revocable living trust receive the same step-up in basis as homes passed through a will.

Some trusts, however, have different tax rules that can affect your tax situation. If you’re unsure how the trust is structured, consider consulting a tax professional before selling the property.

Do I have to pay property taxes on an inherited house?

Yes. Once you inherit a home, you’ll typically become responsible for ongoing property taxes, just as any other homeowner would be. Depending on where the property is located, you may also need to update or reapply for property tax exemptions after ownership changes.

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For generations, philanthropy has measured itself by generosity: How much money went out the door. Maybe it's time to measure something else: How long the impact lasts.

America's foundations have made a difference. They've funded hospitals, kept food banks stocked and propped up communities through hard years.

But too often, "success" still means dollars distributed rather than lives genuinely changed. A grant can ease a crisis this month. It rarely creates the conditions that let a family or a neighborhood stand on its own two feet next year.

Sometimes, without meaning to, it does the opposite: It funds the same need again and again instead of solving it.

The need for philanthropic investment

Every industry hits a point where the old playbook stops working. Philanthropy is there now. The problems facing communities have changed shape over the past few decades; the tools built to fight them mostly haven't. Funding yesterday's solution for today's problem rarely produces tomorrow's opportunity.

The world has moved on. Entrepreneurship is everywhere. Venture capital turns raw ideas into real companies at a pace that would have seemed absurd 50 years ago. Yet most institutional giving still runs on a model built for an earlier era, one designed to meet needs rather than build capacity. That deserves a second look.

Today's problems call for something more ambitious than charity alone: Philanthropic investment. Foundations acting less like check-writers and more like long-term partners, backing entrepreneurs, community leaders and organizations capable of creating opportunity that outlives the grant.

The goal shouldn't be to make people better at receiving help. It should be to help them stop needing it.

Americans gave an estimated $593 billion to charity in 2024, up 6.3% from the year before, or about 3.3% after inflation, according to Giving.org.

Private foundations alone distributed nearly $110 billion. And because most private foundations are subject to annual distribution requirements tied to roughly 5% of certain assets, that number only grows as endowments do.

The real question isn't whether philanthropy has the resources to make a dent. It clearly does. The question is whether those resources are being spent to fix things, or just to keep fixing the same thing.

A new playbook for private foundations

My years at the JPMorgan Chase Foundation taught me something simple: Capitalism creates opportunity only when capital actually moves. A neighborhood doesn't build lasting prosperity while its most promising entrepreneurs stay chronically underfunded.

That means foundations need to step outside their comfort zones, trading some of the risk aversion of traditional grantmaking for the instincts of an angel investor.

Zero-interest loans, recoverable capital, and patient, mission-driven investment are three methods. Money that comes back and gets reinvested, again and again, doing more good the second and third time around than a one-time grant ever could.

Picture a foundation less like a donor and more like a convener pulling together business leaders, entrepreneurs, schools, nonprofits and local officials around one goal: Durable local prosperity, not just relief from the latest hardship.

We don't have to guess at what this looks like in practice. A few foundations have already written the playbook. The Kauffman Foundation has spent decades investing in entrepreneurship and expanding access to economic opportunity.

Miami tells a similar story: The Knight Foundation helped turn it into one of the fastest-growing startup hubs in the country, not through blind check-writing but through smart, sustained bets on entrepreneurs, civic institutions and the organizations around them.

In both cases, the money was never the point. It was the ecosystem it built: Businesses, investors, schools, nonprofits and local leaders all pulling in the same direction.

Philanthropy's next chapter

The lesson here is worth sitting with: Philanthropy does its best work as a catalyst, not a benefactor. Bring the right partners to the table, absorb some of the early risk nobody else wants to touch, and back ideas with real staying power. Suddenly a foundation's reach extends well past its own checkbook.

What you get isn't just healthier nonprofits. You get local economies that keep generating opportunity long after the original investment is a distant memory.

Venture investors know most bets won't pay off, but the ones that do can create jobs, spin up new supply chains and lift an entire community in the process.

Philanthropy can borrow that same long game, just with a different scoreboard: Not equity value, but economic mobility, business formation, household income and community resilience.

No single foundation can pull this off solo. The real opportunity lies in public-private partnerships, where philanthropic capital pairs with business expertise, government resources and entrepreneurial energy. Together, they can build something no one player could fund alone.

Philanthropy's next chapter shouldn't only be about doing charity better. It should be about needing less of it. Every dollar that funds a small business, seeds an entrepreneur or builds real capacity in a community is a dollar that starts working on its own, creating jobs, generating tax revenue and funding the next idea.

That's not a smaller vision for philanthropy. It's a bigger one.

The foundations that figure this out first won't just write the biggest checks of their era. They'll build the playbook every foundation after them has to reckon with. The ones that don't will keep measuring success in dollars out the door, long after everyone else has moved on to measuring what those dollars actually built.

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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 had school-aged children or grandchildren in your care during the pandemic, COVID-19 was that nightmare none of us fully woke up from, leaving this haunting question: "What did these past several years — a tsunami of doubt and contradictions — do to our children?"

While, historically, it has been virtually impossible to sue a school district for educational negligence ­— for example, graduating kids from high school who are functionally illiterate — COVID opened the floodgates, leading to multimillion-dollar class action settlements across the country to pay for remedial tutoring in basic subjects.

But money alone can't answer those questions that most of us had, and might still have, such as:

• Was it really necessary to shut down the schools, depriving our kids of not only education, but the development of important social and life skills?
• Was the virus really a fatal risk to young children?

The release of Dr. Anthony Fauci's pandemic diaries could not have come at a better time for many of these issues to be reexamined. In 2020, when the pandemic began, Fauci was director of the National Institute of Allergy and Infectious Disease.

As Southern California pediatrician Dr. Stanley Calderwood asks in his book, COVID-19, Children and the Lasting Impact: A Parent's Guide to the Global Pandemic, published in July, "Did the pandemic response truly protect children, and how can we do better next time?"

Mass of confusing messages

"There was a mass of confusing messages we all heard about the COVID-19 virus and efforts to find treatments and a vaccine," Calderwood noted during our Zoom interview. "But little attention was paid to educating the public in the basic biology of what we were facing — how a virus, like COVID, can infect someone merely if you stand next to them."

His book takes us through a mini course in Infectious Diseases 101. He has a unique ability to break down the science behind what makes us sick and how our bodies are equipped to fight a never-ending war against unseen enemies — and how the science of vaccination has saved so many.

Vaccination helped win the Revolutionary War

And speaking of war, did you know that it was science — yes, science — that played a significant role in our Revolutionary War? "It wasn't only the military brilliance of George Washington that helped to achieve independence," the author pointed out, "but something that took great courage off the battlefield to assure victory on the battlefield.

"A distrust of vaccination developed during the COVID crisis, but most people are completely unaware that in the winter of 1775, George Washington faced two enemies — the British army and smallpox, which had a mortality rate of 30%.

"An early form of vaccination, known as 'variolation,' while controversial, was proven to be effective in preventing the deadly respiratory aspects of the disease. Washington ordered this be administered to recruits who never had smallpox and quarantined those who were infected.

"During the spring offensive, his troops were healthy and encountered little resistance from the British, many of whom were too sick to fight, giving the Continental Army its first significant victory."

Was it necessary to shutter the schools — and the country?

Who can forget the panicked shutdown of human activity during COVID, "as a way, it was thought, of stopping the disease and fatalities. This was flawed reasoning," the author notes. "Several countries did not go into lockdown — Japan, Taiwan, Sweden, for example — and were not worse off for it, as we see in retrospect."

Calderwood's pediatric practice remained open throughout COVID. He and his colleagues gathered a great amount of data on the frequency of infection and symptoms in children, and he draws on more than 30 years of clinical experience in his examination of the virus and the public health response to it.

"The results were striking. Half of the children who tested positive were asymptomatic. They reported no symptoms and had normal vital signs. Almost all the remaining children had only mild or moderate illness, typically recovering within seven to 10 days.

Researchers and physicians across the globe have substantiated these findings. The majority of children with COVID-19 are asymptomatic or have mild disease.

Why do children not become as ill as adults?

Calderwood spends a great deal of time in his book explaining how an infection spreads and tells us why children did not become so ill: "COVID-19 gains entry into cells by binding to the ACE-2 receptor cells on their surface. In children, there are relatively few ACE-2 receptors, significantly limiting the virus' ability to establish serious infection.

"Early in the pandemic, many pediatric infectious specialists understood this and were very cautious about voicing opinions that contradicted the prevailing narrative, afraid to tell it like it was, that COVID-19 would not be a serious infection for children."

Education and the family

Calderwood is most eloquent when he looks at what the lockdown did to children at critical stages in their social development and academic education.

"There is a window of opportunity where the brain is best able to develop language and math skills. Merely by reopening the schools, things do not pick up where they left off. While a short period of closure to slow the virus may have been warranted, we continue to witness the results of our failure to ask, 'What does shuttering schools do to the students? What does it do to families?'"

Calderwood concluded our interview with this cautionary observation: "COVID-19 illustrated what happens when politics and ideology slam the door to science shut. Society will be tested again."

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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

A signed will, a funded trust and a list of named beneficiaries can create a powerful sense of security for individuals mapping out their estate: The paperwork is done, so the plan must be ironclad.

In reality, even the most carefully designed estate plans can quietly fall apart when left unattended.

Anyone actively engaged in or preparing to start the estate planning process should be fully aware of where they may be exposed to vulnerabilities, which life events should prompt an immediate review and reevaluation and what to bring with them when meeting with an estate planning attorney.

Here are five of the biggest myths in estate planning, each paired with the best practice to follow instead.

Myth No. 1: The will and trust always have the final say

It seems logical that a will or trust controls where everything goes. In practice, beneficiary designations on retirement accounts, life insurance policies and similar assets generally take precedence over both.

Consider a revocable trust that thoughtfully establishes a separate share for each child in a family. If the largest retirement account names just one child as beneficiary, that single form quietly bypasses the entire trust structure. The funds go directly to the named child.

Strategy tip: Treat beneficiary designations as a core component of a coordinated and comprehensive estate plan and confirm that every designation is made with intent that is reflected within the will and trust.

Myth No. 2: Once beneficiaries are named, the job is done

Standard beneficiary forms carry default rules that routinely surprise families. For example, if three adult children are each named as one-third beneficiaries and one of them dies first, that child's share typically flows to the surviving siblings, rather than the deceased child's own children.

In such a scenario, the grandchildren are unintentionally disinherited by a form nobody thought to revisit.

When assets do reach minors through beneficiary designations, the results are rarely good: The child receives full control at 18. Custodial Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts are irrevocable, and compounding growth over time can gradually turn modest gifts into a substantial sum no teenager is properly prepared to manage.

In our own practices, these accounts have produced some of the most difficult conversations we have ever had — a parent watching a 17- or 18-year-old gain control of far more money than anyone ever intended, with no legal way to slow it down.

By the time a family realizes the account has ballooned, nothing can legally stop the transfer.

Likewise, divorce introduces its own trap. Some states automatically sever a former spouse's beneficiary designation the day a divorce is finalized. Anyone who intends to keep an ex-spouse as beneficiary must re-execute the designation after the divorce is final, or the law may quietly override the plan.

Strategy tip: Review every beneficiary designation after any major life event and at least every five years. Make sure to review beneficiary designations on accounts with less common beneficiary designation options such as payable on death (POD) or transfer on death (TOD).

Myth No. 3: More documents mean more protection

Complexity is not the same as security. While an estate plan may become more elaborate with every well-intentioned addition, it can also become more fragile. Key warning signs include:

An uncoordinated patchwork of paperwork. Wrangling several documents not designed to work together — such as a living trust from one attorney and powers of attorney from another — can add up to produce disaster.

Outdated assumptions. The federal estate tax exemption now sits at $15 million for individuals; roughly two decades ago, it was $1 million. Sophisticated structures built under the old rules can be obsolete today.

Assets ignored by documents. A closely held business, a buy-sell agreement or a family investment entity can derail everything.

Forced togetherness. A family cabin left jointly to three children living in three different states, further complicated by a provision forbidding its sale, is a recipe for resentment. So are co-fiduciaries, which generate an outsized share of estate litigation.

Strategy tip: Favor coordination over accumulation, revisit older structures as the law changes and name one person at a time.

Myth No. 4: The attorney will flag any problems

As former practicing estate planning attorneys ourselves, we say this with genuine affection for the profession: Attorneys are, by the design of their practice, reactive.

They respond to what clients bring them, and they rarely reach out unprompted to ask whether a plan still reflects a client's life.

So, the responsibility for noticing that a named guardian is no longer needed, or that a personal rift has made a chosen trustee a poor fit, tends to fall on the client.

Strategy tip: Complete three steps before any attorney meeting:

• Do a cursory self-review. Check who is named and in what roles, the ages at which distributions occur and whether significant assets are mentioned in the documents at all.
• Articulate wishes in plain language. An effective plan maps who receives what, in what proportions and under what conditions, no legal vocabulary required.
• Bring a personal financial statement. Provide a clear accounting of what is owned, how it is titled and who else holds an interest.

The stakes of that last step are easy to underestimate. We once worked through a client's entire plan, only to have her mention, almost in passing, that she had been diagnosed with stage IV cancer.

Attorneys can work with only what they are given, and one undisclosed detail can quietly undo an otherwise flawless plan.

It also pays to ask the attorney's opinion directly. Asking, "Would this work in my situation?" invites a far more engaging answer than a directive ever will.

Myth No. 5: A good plan is built to last a lifetime

An estate plan is not an immovable monument; it is a living document. Trying to solve for the next 30 years is a surefire recipe for decision paralysis.

The better question is simpler: If something major happened in my life within the next five to 10 years, how should my estate plan follow suit?

There is no standard estate plan. The power of a good estate plan lies in how precisely it reflects a particular family, its assets and the wishes of the person drafting it.

Strategy tip: Plan for the foreseeable future and resist any plug-and-play template.

The strongest plans are not the longest or the most sophisticated, but rather, the ones reviewed regularly, coordinated carefully and shaped by owners who stay engaged.

An intentionally designed plan does not simply sit in a drawer looking impressive; it makes a meaningful difference for the family it was designed to serve.

Ultimately, the most effective estate plan isn't the one with the most documents, but the one that stays coordinated across wills, trusts and beneficiary designations and is revisited after every major life event.

By staying actively engaged, individuals can ensure their plan continues to protect the family it was built to serve rather than falling victim to the default rules and outdated assumptions that catch so many families off guard.

Shelby Anderson, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Shelby works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Patrick Schultz, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Patrick works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

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

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it.

Dear Wealth Wise: My husband and I have saved about $300,000 for retirement combined, but we recently paid off some debt and are saving about $1,000 a month. We are in our mid-to-late 40s with one child. We could move from our current home (with almost $400,000 equity) to a smaller condo once our daughter graduates in a few years. Our parents have pledged to pay for our daughter’s college, but we will still need to support her financially until she gets a job.

Realistically, what can we expect to retire with and are we saving enough? Should we cut back on things like cable, or is our situation not that bad? — Late to the Party

Dear Late to the Party: It's not so unusual to reach your mid- to late 40s with modest retirement savings. Student loans, home down payment savings, and high mortgage costs can eat into your paychecks, making it hard to fund retirement until your earnings increase.

The average 401(k) balance among savers ages 45 to 49 was $163,200 in 2026, according to Fidelity. By that measure, this couple seems to be in good shape.

At the same time, Fidelity's average balance of $264,500 among savers 70 and over isn't so promising. Under the popular 4% rule, that's roughly $10,600 in annual withdrawals. So while our couple may be ahead of their peers, that doesn't mean they're in excellent shape. Here's what our experts suggest given their situation.

Don't get hung up on small changes

When you're trying to catch up on retirement savings, you'll often hear that every little bit helps. But one thing you don't want to do is cut out small luxuries to the point where life is miserable.

"Before deciding whether to cancel cable or eliminate every discretionary expense, I’d first determine whether they’re actually on track," says Ernie Cave, CFP, founder and wealth manager at Cave Wealth Management. "The biggest strategy many families miss isn’t finding another $200 per month. It’s building a retirement income plan."

As Cave explains, if this couple is in their mid- to late 40s, they may have 20 years before retirement.

"Consistent savings, investment growth, and future raises can dramatically improve their financial position over that time," Cave insists.

Before cutting cable, Cave suggests a few things. First, figure out when you want to retire, how much annual income you'll need, and how much money Social Security will provide.

"Without that roadmap, it’s impossible to know whether another $200 or $300 per month will meaningfully change the outcome," he says.

Next, Cave recommends focusing on big opportunities to build meaningful savings rather than small ones like cutting cable.

"Make sure both spouses are receiving the full employer retirement match. Increase retirement contributions every time income rises. Redirect every debt payment that disappears into retirement savings before that money quietly becomes lifestyle spending," Cave says.

Given that the couple is approaching 50, they should also plan to take advantage of catch-up contributions. Once they turn 50, they will be eligible to sock away an extra $8,000 each in their 401(k)s or $1,100 in IRAs. (Since they are not yet 50, these contribution limits will likely increase in future years)

These changes, he explains, may get you where you need to be without eliminating the smaller bills that make life more enjoyable.

Sabrina Carlson, CFP and owner of Carlson Wealth Solutions, agrees with Cave.

"Regularly review expenses less to squeeze dollars for more retirement savings, and more to ensure they are really valuing what they pay for and to keep the habit of frugality in retirement," she says.

Carlson also says that based on her calculations, increasing retirement savings by $300 a month could add around $120,000 to this couple's total assets in retirement. And, she says, while every little bit helps, "this amount could also be accounted for in many other ways."

Of course, we don't know whether the couple has saved in a traditional or Roth 401(k) or IRA. If they've invested in traditional accounts, they'll need to plan for substantial taxes when they withdraw funds in retirement.

Use home equity to your advantage

Another advantage this couple has is a nice amount of home equity.

"With approximately $400,000 in home equity, downsizing after their daughter graduates could reduce future housing costs and potentially free up additional retirement assets," says Cave. "I wouldn’t count the entire $400,000 as retirement savings because they’ll still need somewhere to live, but it should absolutely be part of the retirement plan."

That said, downsizing right after the daughter finishes college may not be feasible. A growing number of recent graduates are having trouble landing entry-level jobs in today's market.

You may be able to downsize eventually. But it's best to build a retirement savings plan that doesn't rely on downsizing at a fixed point in time.

The outlook may be better than expected

All told, the situation here isn't dire. If you take $300,000 in savings, add $1,000 per month, apply a 7% annual growth rate, and let it compound for 20 years, our couple could end up with roughly a $1.65 million nest egg.

A 4% withdrawal rate yields about $66,000 in annual income, not including inflation adjustments. And if we apply the average $2,084 Social Security retirement benefit today, that adds roughly $25,000 a year for one beneficiary or about $38,000 for a couple.

That average benefit, of course, will likely be much larger once this couple retires, so it's an imperfect measure. But throw in cashed-out home equity, and they may be looking at a $100,000 annual retirement income, which isn't shabby.

Carlson says that if our couple runs projections based on their current plan and finds that their estimated annual retirement budget should work for them, then they're "likely in good shape." But they should ask themselves what they want retirement to look like.

Carlson also recommends creating a strategy now for how to contend with potential long-term care.

"This couple is likely to be the most susceptible to one or both having a costly long-term care event, as they will have some assets which must be used before Medicaid would step in, but not enough assets to cover the bill without worry," Carlson explains.

A word from Wealth Wise

The internet is loaded with tips on how to save for retirement, with cutting your daily latte being a common one. The reality is that with a solid savings plan, you don't need to deny yourself small indulgences or sweat every penny. A better idea is to prioritize what's important to you and enjoy those small splurges without guilt.

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

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Homeowners age 62 and older hold almost $15 trillion in home equity, nearly double the total of early 2020, according to data from the National Reverse Mortgage Lenders Association. If you own your home or another property, you have another financial resource for renovations, debt consolidation, extra income or even a business investment. But accessing that value is not as simple as withdrawing cash from the bank or selling shares in a retirement account.

"Using home equity is a puzzle," says Ashley Morgan, a debt attorney in Chantilly, Va. "It goes beyond whether you can afford to take the money out. You also need to consider how that decision fits with your future financial and housing goals."

Whether you need extra money now or simply want to understand the possibilities, here's what you should know about using home equity in retirement.

1. There are multiple ways to tap home equity.

Home equity is the portion of a property's value that you own outright. In other words, it's what you would receive if you sold, after paying any remaining mortgage debt and transaction costs.

Selling is the simplest way to cash out your equity, but there are other ways to access that value while staying in your home, each with its own tradeoffs.

The right option depends on what you need the money for, whether you can afford ongoing loan payments and whether the property still fits how and where you want to live in retirement.

2. A HELOC provides borrowing flexibility.

With a home equity line of credit (HELOC), you receive a borrowing limit based on the value of your property. You decide when and how much to draw, and typically owe interest only on the amount borrowed. After you repay the balance, that credit generally becomes available to borrow again.

"A HELOC gives you the ability to prepare for future expenses or cover projects that happen in multiple stages," says Fabien Thierry, head of home equity lending at Citizens Bank. However, HELOCs typically charge adjustable interest rates, so the monthly payment can change.

3. A home equity loan makes sense for a specific need.

A home equity loan provides a lump sum of cash upfront, which you repay on a set schedule, usually with a fixed interest rate and monthly payments.

Interest begins accruing on the full amount immediately, and some loans charge a prepayment penalty if you repay early. Home equity loans can work well for a specific expense, such as a major renovation or accessibility upgrade.

In a 2026 Citizens Bank survey of homeowners, 44% said renovating their property to fit their needs better was their most realistic housing option. Just 13% said buying another home felt achievable.

4. Borrowing against your home equity is affordable, but carries extra risk.

Home equity loans and HELOCs use your house as collateral. Interest rates for home equity loans and HELOCs averaged about 8%, compared with 12% for unsecured personal loans and nearly 20% for credit cards, according to a national Bankrate survey of lenders in June 2026.

The tradeoff is that if you fail to make the scheduled payments, the lender could eventually foreclose on your home.

5. A reverse mortgage lets you stay in the home without monthly loan payments.

A federally insured Home Equity Conversion Mortgage is available starting at age 62. You can receive the money as a lump sum, installment payments or as a line of credit.

Interest and fees are added to the loan balance over time. The balance becomes due when you sell the property, move out permanently or pass away. However, your heirs will not owe more than the property's value if the loan balance grows beyond it.

You must continue to cover property taxes and insurance, and keep the home in good condition. Otherwise, the lender could foreclose on the home.

6. Home equity investments offer cash, but at a high price.

With a home equity investment (HEIs), also known as a home equity sharing agreement, you sell a percentage of your equity to an investor. You get cash upfront and don't owe ongoing loan payments. Instead, the investor collects when you sell or refinance the home later.

These deals have grown more popular as homeowners look for ways to tap their equity without adding another monthly bill. Because the cost is deferred and tied to the home's future value, they can feel far less expensive than they are.

Here's an example: A homeowner receives $50,000, equal to 10% of a $500,000 home's value. They would owe $110,000 after 10 years if the property appreciates at 1.5% annually, or $187,000 if it appreciates at 5.5% annually, based on estimates from Point, an online provider of HEIs. Processing and other fees can also reduce the cash you receive.

By comparison, a 10-year home equity loan for the same amount at an 8% interest rate would cost about $73,000 to repay. "The seller may not realize how much upside they are giving away," says Luca Rassenti, a financial adviser in Tucson, Ariz.

7 Compare your options.

When borrowing against the equity in your home, compare offers from several lenders before committing. "Look at the rate, the support during the application process and how quickly you can get the money," says Thierry from Citizens Bank. Many banks offer online calculators that can give you an initial estimate of the rate and monthly payment.

Shopping around also matters for reverse mortgages and home equity investments, where fees and contract terms vary considerably.

Use the Bankrate tool below to explore and compare today's top refinance offers:

8. Selling unlocks your equity, but costs can add up.

Selling is the most direct way to access all your home equity. Downsizing to a less expensive property can also free up cash and reduce future housing costs.

However, you will lose value due to transaction costs and taxes, typically running up to 10% of the property for selling and 5% for buying another one, according to Zillow. So price out the full cost of the move before counting on a large amount of extra cash.

Single homeowners can exclude up to $250,000 of profit from their taxes for the sale of a primary residence, or $500,000 for a married couple filing jointly, as long as you (or your spouse) have lived in the home for two out of the last five years. "If you've owned a house for many years, you could have a substantial taxable gain," says Morgan, the debt attorney from Virginia.

9. Saving equity prepares for future needs.

Untapped home equity can serve as a reserve for later costs, including assisted living or long-term care. About 80% of 65-year-olds will need long-term care at some point, according to the Center for Retirement Research, and costs can run over $100,000 per year.

Before tapping your equity for a less urgent expense, consider whether other savings or assets could cover it and preserve that buffer.

10. Include your heirs in the plan.

When you pass away, your real estate receives a step-up in basis to its market value at that time. That means your heirs could sell it without owing taxes on the appreciation during your ownership.

If you need cash, Rassenti suggests asking your heirs whether they would provide a loan or gift today, with the expectation that they will inherit the property later. They may also have emotional reasons for wanting to keep a longtime home in the family. "Talk to the kids about what matters to them," says Morgan.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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For many homeowners, today's housing market feels like a stalemate. Elevated mortgage rates and limited inventory have left many people choosing to stay put rather than make a move.

A recent report from Citizens, where I am the head of Mortgage and Consumer Lending, found that only 13% of American homeowners say that buying a new home feels realistic in the current economic environment.

But not everyone has the luxury of waiting. Job relocations, family changes and caregiving responsibilities continue regardless of market conditions. For these "must-move" buyers, the question isn't whether to act, but how to move forward in a difficult market.

Many begin the process with a strategic, financially focused approach. Affordability remains a top concern. However, market conditions frequently prompt buyers to pivot.

Many buyers enter the process expecting their current home to be the biggest hurdle. Increasingly, we're seeing the opposite. Homes might sell quickly, while limited inventory and competition make finding the next property significantly more difficult.

Managing the gap

For homeowners who need to sell one home and buy another, the challenge is often less about completing a transaction and more about managing the gap between two transactions that rarely align perfectly.

Navigating this environment requires flexibility. A clear understanding of the financing and liquidity tools available can help bridge those gaps, but many buyers aren't sure where to start.

The same report from Citizens reveals that 63% of homeowners are likely to need financing for a home purchase or improvement within the next five years, yet 39% say they don't understand how financing options work.

In addition, 27% are either unfamiliar with home equity or have not yet explored how to use it.

Lots to discover

This knowledge gap can complicate an already complex process. Beyond finding the right home, buyers must evaluate loan options, compare costs and manage timing — all while dealing with uncertainty around rates and inventory.

For those who need to move quickly, liquidity and flexibility are critical. Some buyers are exploring ways to tap into their existing home equity, including home equity lines of credit (HELOCs) and home equity loans.

About 40% of HELOC applications at Citizens reach final approval in 10 days or less, helping borrowers act decisively without prolonged uncertainty.

These options allow homeowners to borrow against the value they've built in their current property, which can be useful when the competitive market makes the purchasing timeline difficult to pin down.

For example, a buyer relocating for work might have a defined timeline to sell the current home and secure housing in a new region. Too often, those timelines don't align.

A home might sell quickly, but a lack of suitable options can delay the purchase of the next property, creating the need for interim housing or temporary financing solutions.

In these situations, accessing home equity can help bridge liquidity gaps and reduce pressure to make rushed decisions.

Buyers can also strengthen their position by obtaining a fully underwritten commitment letter from a lender, which verifies income, credit and debt-to-income ratio before they begin making offers.

Explore your options

That said, home-equity products and a strong position in the market aren't the only paths toward a successful transaction, and they don't come risk-free. Sale contingencies are an option, but most sellers prefer to avoid them.

Alternatively, buyers who want to hold on selling their home before buying can consider a bridge loan, which is designed to provide short-term financing that "bridges" the gap between buying a new home and selling the current one, giving buyers the funds to make an offer before their existing home closes.

That opens the possibility of carrying two housing payments at once and causing great financial strain. The flexibility of a HELOC's draw period allows borrowers to pace principal and interest repayments, which can be useful for smoothing out cash flow in early repayment years.

Understanding these risks is key to making decisions that will best position the buyer financially, far beyond the transactional moment of moving.

Easing the strain

Even when equipped with solid information, buying a home under pressure can be difficult. Practical guidance and realistic expectations can help buyers make more confident decisions.

In today's challenging market, buyers should build a trusted team of advisers — including real estate professionals and lenders — early in the process. They can also anticipate setbacks and consider temporary housing if necessary to avoid compromising on their goals.

When buyers fully understand their options, they are better positioned to make decisions that support their long-term financial health.

While some experts suggest the housing market is at a standstill, the must-movers prove that the market hasn't shut down completely. People are still buying homes, just with a stronger need for reliable guidance when timing isn't ideal. They want to understand every possible financial risk before listing.

In this landscape, buyers who take the time to understand their financing options and plan for liquidity are better positioned to navigate the market thoughtfully, even when waiting isn't an option.

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

You've done everything the system has asked of you.

You were automatically enrolled in your 401(k) on your first day and never opted out. Your contribution rate climbs a little each year — automatically, whether you notice or not — and your money sits in a target-date fund that quietly rebalances while you live life.

On paper, you're a retirement success story — the exact "participant outcome" every employer hopes for and the entire financial services industry is built to produce.

Then the brakes on your car go, the emergency room copay hits, or the rent notice arrives with a number you simply can't cover this month. And you do the very thing you swore you'd never do: You log in and pull money out of the account you know you shouldn't touch.

If that stings a little, it's probably because it's a story about a lot of us.

In 2025, a record 6% of retirement plan participants took a hardship withdrawal from their 401(k), according to Vanguard's latest How America Saves report — the largest share the firm has ever recorded, and up from 5% the year before.

That happened in the very same year account balances climbed 13% and plan participation reached an all-time high of 86%. Read that again.

By those measures, the system looks healthier than ever. So why are more people than ever reaching into their retirement savings early? And how can we help mitigate this?

Hardship withdrawals aren't a discipline problem

The "easy" conclusion is that people simply aren't saving well, or that they lack discipline. I'd argue the opposite. The median hardship withdrawal last year was about $1,900. The two most common reasons were to stop a foreclosure or eviction and to cover a medical bill.

People aren't necessarily draining their retirement accounts for a vacation, a new pool in the backyard or an online shopping spree. They're reaching for the last cushion they have, because every other one is already gone.

That's the real story hiding inside the headlines: The early withdrawal isn't the problem. It's a symptom. The fragility was there long before the withdrawal; this is just where it finally became visible.

The rest of the data agrees. Worker confidence in retiring comfortably fell six points in a single year to 61%, the lowest since 2017, according to the Employee Benefit Research Institute. Fewer than three in five workers say they could handle an emergency expense, while 65% say debt is a problem in their household.

These aren't the numbers of a country that forgot how to save. They're the numbers of a country where paychecks stopped stretching as far as the plan assumed they would.

To be fair, part of the increase is mechanical. It's simply easier to take a hardship withdrawal than it used to be thanks to a 2018 rule change that removed a required step, resulting in less paperwork and fewer hoops to jump through.

Going back to the 6% taking withdrawals, this could mean friction is disappearing, not necessarily that distress is appearing. But that caveat doesn't rescue the overall story. In contrast, it sharpens it.

When someone is facing eviction, unexpected medical bills or a $1,900 shortfall and this is what they reach for first, you're not looking at carelessness. You're looking at a need.

A better way to cope with financial emergencies

If you find yourself eyeing that account in a hard month, instead of asking, "What's wrong with me?", ask some of these questions instead.

Am I measuring the right thing? A growing retirement account balance feels like security, but it's a promise about a life you'll live decades from now. It tells you nothing about your next 30 days.

The fragility lives in the gap between this paycheck and the next surprise, and that gap never shows up on your quarterly retirement account statements.

The number that may better predict whether you'll have to raid it is a different one: How long you could cover the basics if the paychecks stopped tomorrow, using money you can easily reach without touching retirement at all.

Is there anything between me and the next emergency that isn't my retirement account? For a lot of people, honestly, there isn't. But that's not a character flaw — it's the most changeable thing on this list.

A small, separate emergency fund, built however it gets built — a little set aside over time — is often all that stands between an unexpected bill and a withdrawal.

And what would actually make me feel secure, as opposed to just making the balance bigger? Those aren't always the same goal, and noticing the difference is where real security starts.

Rather than focusing too rigidly on standard savings advice, find the number that helps you sleep at night.

To be clear, none of this means the years of saving were pointless. It means retirement readiness and financial security are two different things, and we've spent a long time discussing the first as if it guarantees the second.

If you're doing everything right and still feel like you're one surprise away from it all coming apart, you're not imagining it, and you're not alone — you're paying attention. The account is never the whole picture. The life around it is.

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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.

My parents were born during the Great Depression and understood money down to the penny.

I still have their passbook savings accounts — small booklets filled with handwritten deposits and withdrawals that documented the flow of money through their lives. Every entry is a reminder of a time when financial stewardship was a necessity.

Today's teenagers and young adults live in a very different world. As many prepare to leave for college and manage money on their own, parents are asking important questions: Should they provide a monthly allowance? Encourage a part-time job? Help their children open a credit card?

Many families understandably provide financial support during college — whether for tuition, housing or living expenses. In fact, according to Edelman Financial Engines' What Money Means study, 43% of parents with adult children say they currently provide financial support, including 14% who say they provide a significant amount.

Financial assistance has remained remarkably consistent over the past several years, suggesting this has become a normal part of launching young adults into adulthood.

1. Start with awareness: Help them see how money moves

Most teens and young adults experience money only at the moment of spending. They tap a card, and the story ends there. But financial maturity begins with understanding how money actually flows into, out of and through our lives.

One good way to illustrate the value of money is to encourage them to track their spending — ideally for a month. The point is not to judge their choices — it's to help them see patterns.

If they are earning a paycheck, walk them through it. Show them the difference between gross and net pay, how taxes work and why payroll deductions matter. For students who take on a campus job, reviewing a paycheck can be an eye-opening lesson.

Understanding why take-home pay is less than expected — and learning to budget around it — builds practical financial skills.

Another way to teach financial responsibility is to let young adults pay for certain things themselves. Start small with discretionary purchases — the things they really want — and gradually move to necessities.

Whether support comes through a monthly allowance or helps cover larger expenses, establishing clear expectations helps young adults learn to budget while still benefitting from a parent's guidance. This is not about withdrawing support — it is about giving them the dignity of ownership.

2. Teach credit before they need it

College is often the first time young adults are exposed to credit card offers. Before they apply, help them understand the difference between building credit and accumulating debt. Explain how interest works, why paying the balance in full each month matters and how credit utilization affects a credit score.

It's also important to discuss common credit card mistakes, such as making only the minimum payment, carrying a balance month to month, maxing out available credit, missing payments or treating a credit card as an emergency fund.

These habits can lead to costly interest charges, damage credit scores and make it harder to reach future financial goals.

In fact, nearly 60% of Gen Z credit cardholders say they typically make only the minimum payment on at least one credit card, according to a recent LendingTree report.

The survey also found that many cardholders mistakenly believe carrying a balance helps their credit score and rely on credit cards as a substitute for emergency savings.

Relying on minimum payments can become an expensive habit because interest continues to accrue on the remaining balance, making debt more difficult and costly to pay off over time.

When used responsibly, a credit card can be a valuable financial tool. When used carelessly, it can become an expensive lesson.

3. Help them start saving and investing early

If your teen or young adult has income through a job, helping them open a Roth IRA may be one of the most valuable gifts you can give. Even modest contributions to an individual retirement account can be powerful because time — not investment brilliance — is the most valuable asset a young investor possesses.

The goal is not to teach them how to pick winning stocks. Instead, teach them the importance of regularly saving, broad diversification and patience. Show them how a low-cost index fund allows them to become owners of hundreds or even thousands of companies around the world.

More importantly, help them understand the extraordinary power of compounding over decades. A teenager who invests a few thousand dollars today may find that those early contributions may become some of the most valuable dollars they will ever save.

4. Model the behavior you want them to learn

Young adults learn far more from what they observe than from what they are told. One of the most effective ways to teach healthy money habits is to be open about your own experiences with money, including the lessons you've learned along the way.

Whether it's sharing how you paid off debt, recovered from an overspending habit or learned the importance of saving for emergencies, these real-life examples can make financial concepts feel more relatable and achievable.

According to the What Money Means study, 86% of Americans say their parents or upbringing influenced their relationship with money, including 35% who say the influence was major.

Financial responsibility is not learned in a single conversation. When we help young adults understand money, we give them confidence, independence and a foundation for lifelong financial well-being.

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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.

Could owning a pet affect the way you view life during retirement?

Turns out Fido or Whiskers may have a bigger influence on your post-work happiness than you thought.

Full disclosure: I'm a retirement researcher by profession, and I'm also an animal lover. My wife is a veterinarian, and we're proud pet parents to three dogs, two guinea pigs and a tortoise.

In other words, I don't need to do any research beyond my own home to know the profound impact a pet can make at any stage of life.

Still, I was delighted that Prudential included a few questions about pet ownership in the Global Retirement Pulse Survey it did last summer. And it's really not much of a stretch — the cost of owning a pet should absolutely be a factor in building a comprehensive retirement income plan.

Some things we learned aren't particularly surprising: Pet ownership declines notably by age, people who owned pets before are likely to want a pet during retirement, and most people don't fully consider all the costs of owning a pet after they're done working.

Cats vs dogs

Now for the fun part, and I realize I may have buried the bone — I mean, buried the lede. I wanted to see whether pet ownership — specifically cats and dogs — is related to changes in life outlook. So, we asked whether someone's outlook on life has gotten better with age.

Drum roll, please: Go give your dog a treat! People who own dogs report having better life outlooks than those with cats. And people who have cats actually reported life outlooks that were worse than people without pets (I mentioned this to a few cats I know, and perhaps not surprisingly, they just don't care).

I was curious if other factors like wealth could be driving this, so I ran some additional calculations, and it turns out I wasn't barking up the wrong tree. See the results below.

So, I can't offer any guarantees from our research. But if you think owning a dog in retirement will bring a lasting smile to your face, who am I to disagree?

For over 20 years Prudential has been studying broader economic trends impacting Americans in its Pulse survey. The latest, the Global Retirement Pulse Survey, expands the geographic footprint and includes responses from the U.S., Brazil, Mexico, and Japan (for this analysis I just focus on just the U.S. respondents). The survey was conducted online by Brunswick Group between August 8-22, 2025 and there were 1,000 U.S. respondents. Note, the survey only included "mass affluent" adults, who are defined as age 30+ with at least $100,000 in investable assets.

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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.

Whether you're currently retired, just starting your post-career transition, or still years away, how your state taxes retirement income is important.

State taxation impacts how much of your nest egg is truly yours. It shapes your monthly budget during your golden years and can give you a clearer sense of your long-term financial security.

And depending on where you live, your state may not tax retiree income at all. This can save you thousands on Social Security benefits taxes, pension payouts, and 401(k) withdrawals in retirement.

So check out these five quick questions to test your knowledge and see if your state makes the cut.

Good luck!

Remember that no matter where you live, federal income tax still applies. You may want to consult a tax professional for advice tailored to your specific financial situation.

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You probably think you know precisely what stuff your adult children most want from you when you downsize, move to Palm Beach, or are pushing up daisies.

You’re probably wrong.

They don’t want their school trophies. They don’t want that fancy china that Grandma religiously took out of the hutch and served the Thanksgiving turkey on. Most of all, they don’t want those photo albums stuffed with black-and-white pictures of family members who were dead before your kids were even born.

Parting with your precious stuff is hard. Parting with stuff is even harder when your children — who you thought would be clamoring for it — want nothing to do with it. A generation of baby boomers is downsizing and flooding the market with stuff right now because they inherited so much from their own parents and grandparents.

"Gens X, Y, and Z don’t want these things," says Julie Hall, a professional estate liquidator and author of Inheriting Clutter: How to Calm the Chaos Your Parents Leave Behind. "I’ve got a 30-year-old, and I can count on one hand what she wants."

Which is precisely why you’re reading this story. We reached out to four downsizing experts for their unique insights into the ten things adult children typically want least of all — and why.

1. Anything from your living room or dining room

These are, by far, the toughest things to re-home, says Anna Novak, a downsizing expert, real estate agent, and founder of Simply Downsized, a consulting firm in Falls Church, Va. This accounts for a lot of big, dark, space-consuming stuff. Like giant mahogany dining room tables. And huge hutches filled with china and crystal from generations past.

"People don’t have formal dining rooms anymore," says Novak. Our lifestyles have changed so much that it’s increasingly rare to invite large groups of people into our homes and entertain them, she says.

Formal living rooms used to be a visual statement of success, says Novak. In another time, it was a place that was once a gathering spot where you’d feel just as comfortable bringing the Fuller Brush man who knocked at the door as you’d feel with family and friends. Now, few folks want them, and even fewer want all the stuff that fills them up.

2. Photo albums with nameless faces

It’s not that your kids don’t want any of your photos. They don’t want all of them. And they especially don’t want albums or boxes filled with images of distant family and friends whom they don’t even know, says Nonnahs Driskill, founder of Get Organized Already, a professional organizing firm in Pasadena, Calif.

Best bet is to simply offer them a few photos of their choice, she says. "When you give kids your stuff, it should feel like a gift — not a burden," says Driskill.

Best are digital albums, says Marguerita Cheng, a certified financial planner and downsizing specialist in Gaithersburg, Md. It’s especially helpful if the digital photos you share with your kids are organized in some simple way and identify who is in them, she says.

3. Books from another era

Bottom line is, whatever books your children actually want and love, they probably already have, says Driskill.

Books are big, heavy — and take up too much space, she says. They are also very personal. Think about it. Does your kid really want the textbook for the Introduction to Philosophy 101 class you took in college fifty years ago?

Ditto for CDs, records and tapes, says Driskill. Odds are, she says, your kid doesn’t even have anything to play these CDs, records or tapes on.

4. Matching, obnoxious bedroom sets

It used to be a sign of exquisite taste to have a massive, dark wooden bedroom set that included a huge dresser and mirror, a separate stand-up dresser, nightstands on either side of the bed, and a giant poster bed with a towering headboard. Now — not so much.

So, if you happen to have one of these monstrosities — or a bedroom set even remotely like this — please, please don’t foist it off on your kids, says Hall.

These days, matching bedroom sets are so uncool. And most younger folks opt for simple, platform beds that are high on function and low on decorative frills, she says. So, don’t be surprised, she says, if the only thing your kid wants from your bedroom set is a nightstand or two.

5. Linens — with or without stains

You can bet the house that your kids want absolutely nothing to do with those piles of old linens that you’ve got stored for them in a chest in the attic.

If they’re stored in a chest, that means you really don’t want them, either, says Hall.

This includes everything from tablecloths to placemats to napkins. Even that particularly onerous napkin, she says, with a shiny stain "where Uncle Joe spilled his beef gravy."

There’s probably not a woman under the age of 50 who would even consider putting out a matching linen set on the dining room table, says Hall. Why? Among other things, it requires starch and ironing. "My daughter would just throw them out," she says.

6. Collections of just about anything

Way back in the 1950s, collectibles evolved into a sign of success. If you had a Thomas Kinkade painting of a welcoming cobblestone bridge or a Maria Innocentia Hummel figurine of a young German lass standing with her bowl of porridge and geese on either side of her, well, you were the bee’s knees.

As much as you valued these collectibles, your kids don’t, says Novak. Never mind that these collections were a huge part of homemaking for so many boomer moms. They were marketed as lifetime keepsakes that would surely grow in value. But now, she says, "they are just seen as clutter. And kids don’t want them."

7. Sporting goods from another era

You might be a father who paid hundreds — even thousands — of dollars years ago for your then state-of-the-art golf clubs. They once looked so sleek and so shiny. But now, they’re yesterday’s news, says Novak.

Ditto for your one-time state-of-the-art exercise equipment, which did not age well, she says. Nobody wants an old treadmill laden with your coffee stains and sweat marks. "Your kids want their own equipment — not yours," she says. The one exception is the freestanding weights, which often look attractive even if they’ve aged a bit.

8. Your 50-year-old wedding dress

You’ve kept your wedding dress for decades and even tossed some pungent mothballs into the garment bag to keep it pristine. But guess what, neither your daughter nor your daughter-in-law wants it.

"Someone might want your wedding dress, but neither of them," says Driskill. You probably should have donated it to a charity 50 years ago, she says.

Ironically, they might want your grandmother’s wedding dress — because that would definitely be "far cooler," she says.

9. Your untimely timeshare

Timeshares get a bad rap — and as inheritable gifts, they probably deserve to, says Cheng.

Sure, as retirees, you had the time and money to book pricey timeshare vacations everywhere from the Galapagos Islands to Outer Mongolia. But do your adult children really have the time — and money — to take these vacations at this point in their lives?

"People have different needs in different stages of their lives," she says. For your adult children, timeshares probably aren’t one of those needs, she says. What’s more, timeshares often come with maintenance fees that are always spiraling upwards. So check with your kids first, but if they don’t want the timeshare, unload it.

Their own stuff

This one’s certain to surprise most parents. You’ve been saving your kids’ stuff in plastic bins and cardboard boxes for years. Their baseball card collections. Their school soccer jerseys. Even their pre-school graduation certificates. They basically want none of it.

"If they wanted it, they would have taken it by now," says Novak. Particularly, they don’t want all of their school art work — yes, even those clay dinosaurs they molded together in kindergarten — that you’ve been saving for them, says Driskill. "They don’t want their kindergarten stuff," she says. Perhaps the only clay dinosaurs they’ll want, she says, are the ones their own kids ultimately make.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

Related Content

• The Seven Worst Assets to Leave Your Kids or Grandkids
• You've Spent a Lifetime Amassing Your Stuff. Here's How to Get Rid of It.
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In my experience, when a couple sits down to plan their Social Security timing, one thing surprises them almost every time: They don't agree.

One spouse has read that waiting until 70 gets you the biggest possible check, so that's the plan. The other wants the income now.

Neither of them has run the number that should be driving the conversation: Not the maximum benefit, but the spousal benefit and what happens to it if they wait.

That's the piece of Social Security planning I see skipped more than any other. It can be worth hundreds of dollars a month, for the rest of a spouse's life, and most people never calculate it until it's too late to matter.

The decision you can't undo

Social Security is one of the only truly irreversible decisions in retirement planning. Once you file, that's generally it. There's a narrow exception: You can withdraw your application within 12 months of filing, but only once, and you must repay every dollar you've received. Past that window, you're locked into whatever you chose, for life.

That permanence is exactly why this decision deserves more than a rule of thumb. "Wait until 70" is good general advice for a single person maximizing their own lifetime benefit. It's incomplete advice for a married couple, because it ignores a benefit that only becomes available once someone files.

The number most couples never calculate

If you're married, your spouse may be eligible for a spousal benefit worth up to 50% of your benefit at your full retirement age, even if they have little or no work history of their own, or if their own benefit is smaller than 50% of yours.

But here's the part that trips people up: Your spouse can't collect that spousal benefit until you file for your own.

Consider a hypothetical couple, Mark and Diane, both in their mid-60s, with a full retirement age of 67. Mark's full retirement age benefit is $3,200 a month, but he's planning to wait until 70 to collect $3,968. Diane spent most of her career raising their kids and working part-time, so her own benefit at full retirement age is only $700 a month.

Most couples in this position focus entirely on Mark's number. But Diane is also eligible for a spousal benefit of up to $1,600 a month, more than double what she'd get on her own record. The catch is that she can't touch it until Mark files.

While Mark waits, Diane can draw her smaller $700 benefit or wait alongside him. Either way, that's three extra years of a meaningfully smaller household income in exchange for a bigger Social Security check down the road.

Whether that trade-off is worth it depends entirely on the couple's full financial picture, which is exactly why this number needs to be calculated, not assumed.

Running the break-even math

The other number worth knowing is the break-even age: The point at which the extra money from delaying benefits catches up to and passes what you'd have collected by filing earlier.

For someone weighing full retirement age against age 70, that break-even point typically lands in the early-to-mid 80s, depending on the exact benefit amounts involved.

If you expect to live well past that age, delaying tends to pay off in total lifetime benefits. If your health or family history points the other way, filing earlier may make more financial sense, even before you factor in what it means for your spouse's income today.

The part everyone forgets: The survivor's check

Here's the piece that rarely comes up until it's too late to plan around: When one spouse dies, the survivor doesn't keep both checks. The smaller one stops, and the survivor keeps the larger one for the rest of their life.

That means whoever has the higher benefit, and their filing age, determines the income floor their spouse will live on if they're the one left behind.

That's a real argument for delaying the higher earner's benefit, especially when there's an age gap or a health difference between spouses. But it's not automatically the right call for every couple, and it needs to be weighed against the income the household is giving up in the meantime, not treated as a rule that overrides everything else.

3 steps to take this week

You don't need an adviser to start this process. You need 10 minutes and both spouses' numbers.

Pull both statements. Log into your accounts at SSA.gov and record each spouse's benefit at 62, at full retirement age and at 70.

Calculate the spousal benefit two ways. Compare each spouse's own benefit against 50% of the higher earner's full retirement age benefit, and use whichever number is larger.

Run your own break-even math. The 80s range in this article is a general guide, not your number. Free tools, such as Open Social Security, let you plug in your actual birth dates and benefit amounts to see your household's real break-even age and total lifetime income under different filing combinations.

See the math applied to a real filing decision. If it helps to watch this reasoning play out step by step, this video walks through a similar case, including the spousal benefit tension and the break-even trade-off.

Make the decision with the numbers in front of you

Social Security timing isn't a decision either spouse should make alone, and it's not one that should be settled by general advice in an article you've read, including this one. It's a decision that depends on your spousal benefit, your break-even age, your health and what happens to the survivor.

Do the math for your household, not someone else's. And have the conversation with real numbers on the table before you file, because after that, there's no going back.

Related Content

• Claiming Social Security: 7 Tools and Rules for DIY Investors
• When Spouses Clash on Retirement Age: Longevity Risk vs Early Retirement
• How Couples Can Manage Different Retirement Timelines
• The Mulligan Rule of Retirement — Seven Mistakes You Can Fix
• Social Security Do-Overs Quiz: Can You Undo a Claiming Mistake?

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.

Where you live affects your finances in a myriad of ways. One critical component is how much you pay for car insurance.

Living in a city with higher collision risks can lead to higher insurance premiums, regardless of your personal driving record. This is where Allstate's 2026 Best Drivers Report can shine some light on the safest areas to drive.

The insurer examined the 200 most populous US cities, using insurance claims and Drivewise app data — the app you download to monitor your driving behavior in hopes of a lower rate. These findings show how where you live can affect your insurance rate.

These are the safest cities for drivers

Allstate found that Brownsville, Texas, is the safest city in the US for drivers. Drivers living there only experience a collision once every 15 years. Meanwhile, in Boston, Massachusetts, drivers can experience collisions every 3.76 years. That makes it more than four times less likely you'll crash in Brownsville.

Along with Brownsville, here are the top 10 safest cities for drivers:

• Brownsville, Texas
• Fort Collins, Colorado
• Boise, Idaho
• Laredo, Texas
• Cary, North Carolina
• Madison, Wisconsin
• McAllen, Texas (New to top 10)
• Colorado Springs, Colorado (New to top 10)
• Eugene, Oregon
• Olathe, Kansas

You'll notice a few trends from this list. Not surprisingly, living in a smaller to medium-sized city lowers your risk.

And it isn't just about the sheer number of drivers you encounter on your commutes. Allstate's Drivewise data show that drivers in larger cities such as Miami and Boston tend to use their phones more while driving, resulting in elevated risk.

If you live someplace more collision-prone, check your insurance rate regularly to ensure you have the best deal. Use this Bankrate tool to compare options quickly:

Night driving is also more prevalent in larger cities. Allstate found that driving at night is highest in larger cities, such as Washington, DC, Las Vegas and New York. With nighttime driving come elevated risks such as drowsy driving, hard-to-see road hazards and drunk drivers.

Another trend is regionality. The Northeast is home to seven of the 10 most dangerous driving cities, with three being in Massachusetts (Boston, Springfield and Worcester). Meanwhile, the safest cities were predominantly western, with three in Texas and two in Colorado.

While geography plays a massive role in your insurance costs, it isn't the only factor you can influence. Even if you don't live in one of these top-tier cities, you can still take control of your financial protection.

How to protect your car insurance rate

Industry experts recommend the following tips to keep your policy low while protecting your finances:

• Buy a dash cam: Insurance fraud cases often involve "crash for cash" scams. A dash cam can provide irrefutable evidence to back up your claims. This can protect you financially from higher insurance rates and out-of-pocket expenses resulting from judgments exceeding coverage limits.
• Document everything during an accident: Take pictures of all vehicles involved, property, road conditions and skid marks. This can refute "soft fraud" claims where others might exaggerate damages.
• Be cautious of insurance deals: You'll see social media ads promising ridiculously low prices for insurance coverage. These ghost agents can take your money and cancel your policy without your knowledge, leaving you on the hook for any accidents caused in the meantime.
• Check for specific coverage gaps: Beyond standard liability, check your policy for exclusions. Some carriers won't cover damages animals cause to cars, resulting in thousands in repair bills. So, make sure to read your policy thoroughly and contact your agent with any questions on coverage gaps.

While your city's collision risk is a factor you can't control, your approach to insurance and risk management is in your hands. By staying informed about your coverage and taking proactive steps like installing a dash cam, you protect your wallet, no matter where you drive.

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• A Dash Cam Could Be Your Best Defense on the Road (And Save Your Insurance Costs)

December has become the default season for financial planning. It's when many investors review taxes, increase retirement contributions, make charitable gifts and rush to complete other planning before the calendar turns.

But it can also be one of the least effective times to make important financial decisions. Schedules are crowded as deadlines are closing in, while advisers, accountants and attorneys may have limited capacity to support.

Instead of rushing through year-end checklists, summer can give you the space and time to think more strategically. By this time of year, you can see how income, spending and investments are tracking, with several months left to make changes while they can still have an impact.

In my experience as a CFP®, that head start often leads to better decisions because families have time to consider trade-offs and adjust gradually.

1. Rebalance your portfolio and review asset location

Even if you haven't made any trades, market performance over time can change your portfolio's risk profile. Strong returns in equities, a particular sector or one concentrated holding can gradually increase risk, leaving the portfolio more aggressive than it was at the beginning of the year.

An end-of-summer review can identify where allocations have drifted and whether new contributions should be directed toward underweight areas. The goal is to ensure that the portfolio still reflects your goals, time horizon and tolerance for risk.

The review can also include asset location, or which investments are held in taxable, tax-deferred and Roth accounts. As markets move and contributions are added, assets may no longer be held tax-efficiently.

Income-producing investments may be better suited to a retirement account, while investments that receive favorable long-term capital gains treatment may fit better in a taxable account.

Liquidity needs, charitable plans, required minimum distributions and estate considerations also matter. Reviewing where assets are held can improve after-tax efficiency without changing the overall strategy.

2. Check your retirement contribution pace

Many employees choose their retirement plan contribution rate at the beginning of the year and rarely revisit it. By summer, however, a raise, bonus or promotion may have changed both cash flow and the contribution needed from each remaining paycheck to reach a retirement savings goal.

Reviewing your retirement strategy in late summer allows time to make smaller adjustments over several months. Waiting until November may require a much larger increase over only a few pay periods.

This is an overlooked aspect of financial planning that has come up often in my client conversations: People assume they are on pace because their contribution percentage has not changed, but soon discover that compensation or payroll changes have left them short.

A summer financial review can also consider a mix of traditional and Roth contributions. Retirees should confirm how much remains to be withdrawn from required minimum distributions and whether qualified charitable distributions fit into their giving plans.

3. Run a tax projection

By the end of the summer, your financial picture is typically much clearer and more comprehensive than it was at the start of the year. Wages, bonuses, business income, investment gains and equity compensation are easier to estimate, making summer an ideal time to determine whether tax withholding or estimated payments need to be adjusted.

A summer tax projection may also reveal valuable planning opportunities, including Roth conversion, gifts of appreciated securities, the timing of stock-option exercises or the use of investment losses to offset realized gains.

Some of these strategies may be better executed later in the year, once the full tax picture is clearer. But reviewing them now allows you to identify your options before year-end deadlines begin to dictate your decisions.

The goal isn't simply to lower this year's tax bill — it's to ensure every tax decision supports your broader long-term objectives without creating avoidable cash-flow constraints.

4. Put cash and debt to work more deliberately

Over time, cash can accumulate without a clear purpose. Conversely, some households may have too little set aside, forcing them to rely on credit or investment sales to cover predictable expenses.

An end-of-summer review can separate money needed for taxes, travel, home improvements or other near-term spending from assets intended for longer-term goals. It is also worth checking whether savings are earning a competitive return.

Borrowers with adjustable-rate loans, home-equity lines or other variable-rate obligations should understand how interest costs are affecting cash flow. Anyone planning a major purchase should consider how new debt would interact with retirement savings and other priorities.

Cash and debt can be managed intentionally rather than carried forward without review.

5. Prepare for employee benefit decisions

Open enrollment often leaves employees with little time to make important choices. Reviewing benefits during the summer creates more time to consider whether health, life and disability coverage still match the household's needs, particularly after a marriage, divorce, new child, home purchase or change in income.

Employees eligible for a health savings account can reassess their contribution pace and consider how the account fits into their broader plan.

Executives may also need to review stock options, restricted stock, deferred compensation or company-stock concentration before election deadlines arrive.

These choices affect taxes, cash flow and investment risk, and deserve more than a rushed year-end review.

6. Review estate documents before there is an emergency

Estate planning is easy to postpone when nothing feels urgent. Summer is a good time to ensure that wills, trusts, powers of attorney, health care directives and beneficiary designations still reflect the family's circumstances and long-term intentions.

Major life events — such as births, deaths, marriages, divorces, moves and significant changes in wealth — may also require updates to your broader financial plan.

For families considering significant gifts, planning should begin well before December, given valuations, legal documents and trust administration often require coordination among several advisers.

In conversations with clients, estate planning reviews often uncover practical issues that have little to do with estate taxes. An outdated beneficiary designation, an unfunded trust or a missing power of attorney can all create complications long before federal estate-tax exposure becomes relevant.

The goal is straightforward: Ensure the right people have the authority to act in an emergency and that your assets will be distributed as intended. Don't wait for an arbitrary year-end deadline to review your plan.

Act earlier to save stress later

Year-end planning will always matter. After all, certain tax, retirement and gifting decisions are tied to the calendar. But I believe that December should not be the first time you review and adjust your financial plan.

By summer, enough information is available to provide a clearer picture of your finances while still leaving enough time to make intentional adjustments without being rushed. Acting earlier can give investors the breathing room they need to make meaningful adjustments.

For many households, the most important question is simple: Has anything changed in the markets, my finances or my life that should change what I do next? Asking that question now — rather than in December — can lead to better decisions and less stress in the year-end.

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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.

We've all done it. You're waiting in line. You see a snack and think, "It's just a few bucks." Or you tap to subscribe because it's only $4.99 a month.

Those tiny decisions feel weightless in the moment. That's the psychology of "just one small purchase" at work.

It shows up everywhere in modern consumer life. From coffee runs and in‑app upgrades to delivery fees and streaming trials. Understanding why small buys feel harmless helps explain why budgets leak even when we think we're being careful.

As a financial professional, I'm here to help you learn how to rise above this mentality.

The psychological drivers behind minimal purchases

Small purchases (or frictionless digital payments) don't slip past our radar by accident. A few well‑studied biases give them cover and make them easier to justify.

The denomination effect. The tendency to treat smaller units of money as easier to spend. Research in the Journal of Consumer Research finds people are more willing to part with smaller bills than a single large bill of the same value, which makes bite‑size buys extra tempting.

Mental accounting. This is a concept popularized by behavioral economist Richard Thaler. We mentally sort money into different buckets (like rent, groceries, fun money, etc.), then treat each bucket as if it's separate.

Our minds treat minor purchases differently from major ones, making people underestimate the impact of small buys.

Marketing cues and the environment. Placement at checkout, limited‑time offers, one‑click payments — these design choices shrink the "pain of paying" and turn a "maybe" into a "yes."

Social comparison also plays a role. We don't shop in a vacuum — we scan what peers are doing and use it as a yardstick.

For instance, blank apparel is often priced affordably, so adding an extra T-shirt or hoodie to your order may seem like a small decision. It's the kind of purchase that's easy to justify because each item doesn't feel expensive.

Combined with limited-time offers or free shipping thresholds, those small additions can quickly become part of the "just one more" mindset.

The slippery slope: How small purchases add up

The tricky part isn't a single latte or one delivery fee. It's the slow drip.

Picture this scenario for Sheryl:

• She grabs a $4.50 coffee three times a week on her commute
• She has two streaming services at $12 and $15 a month, plus $9 for cloud storage
• She makes a couple of $3 in-app purchases each month
• Her meal-delivery fees average $6 three times a month
• She gets a snack at the register once or twice a week for $1.50

None of these actions feel like decisions. They're habits.

Add it up over a year:

• Coffee: $4.50 x three times a week x 52 = $702
• Streaming: $27 a month = $324
• Cloud storage: $9 a month = $108
• In‑app extras: $6 a month = $72
• Delivery fees: $6 x three a month x 12 = $216
• Small snacks: $1.50 x two a week x 52 = $156

Total: About $1,578 a year

That's real money. And it doesn't include the costs of the food that came with delivery — just the fees.

Gregor Emmian, deputy chief digital growth officer at Rise, says today's digital payment experience makes it easier than ever to overlook small purchases.

"People rarely worry about a single small purchase," he says. "The challenge is that these purchases become routine. And over time, they can add up to much more than expected. "

For a bigger backdrop, U.S. households spend thousands each year eating outside the home, a category packed with small, frequent swipes. The Bureau of Labor Statistics (BLS) reports that average household spending on "food away from home" was over $3,600 in 2022.

How to combat the 'just one small purchase' mentality

You don't need heroic willpower to fight this mindset. A few small shifts can make a big difference. Why? Because they meet the problem where it lives: In the moment.

Track the tiny stuff, briefly and honestly. For two weeks, log every sub‑$10 purchase in one place. Patterns pop up fast. If you like budgeting with buckets, give minor purchases their own category so you can see the full picture.

Cap the category, not the item. Set a weekly "small flex" budget, say $25 or $40, to cover coffees, snacks, tips, microtransactions and more. When the bucket's empty, you're done for the week.

Use a wait‑and‑watch rule. A simple waiting period is one of the most powerful tools. When you give yourself 24 hours before a non-essential purchase, most of the urgency disappears. Pair that with clear financial goals, and every small decision starts serving a bigger purpose.

Tie every "yes" to a goal. Name the trade‑off: "If I buy this, I'm choosing it over an extra $25 toward my emergency fund." The clarity is usually enough.

Reintroduce gentle friction. Turn off one‑click checkout on discretionary sites or require Face ID for purchases. A six‑second pause is often all you need.

Make small swaps that feel easy. Take a travel mug two days a week. Batch your errands to avoid "I'm out anyway" impulse buys and order pickup once a week instead of delivery.

If you find mindfulness helpful, try this quick sequence when a small purchase tempts you:

• Notice the urge
• Name the feeling (Bored? Stressed?)
• Number it (1 to 10)
• Navigate (choose to wait, pass or buy with intention)

A final note

If you want to test this for yourself, total your past 30 days of sub‑$10 transactions. No judgment, just data. Then pick one change that would cut that number by 20% next month without making life feel smaller.

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• 6 Steps to Quickly Build Your Emergency Fund

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

Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million.

They're sharing how they did it and what they're doing with it. This time, we hear from a soon-to-be retired 58-year-old vice president at an engineering consulting firm in Durham, North Carolina. He's married and reports his current salary at $185,000.

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

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

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

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

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

The Basics

How did you make your first $1 million?

Started with investing in getting a degree with which I could make a decent salary. After reading a book from the library on mutual funds, I began using them to save.

At 25, my first real estate investment was a duplex. I realized my wife and I could live in one side, and the rent from the other side paid 80% of our expenses.

I was hooked and used savings to keep buying single-family homes to rent.

After 9/11, I began heavily investing directly in the stock market through individual stocks.

The Fun Stuff

Did you do anything to celebrate?

We celebrated with a nice dinner out, but used a coupon to get the dinner for half off.

It is good to have goals. Mine was to get to a million by age 40. We made it by age 39.

What is the best part of making $1 million?

A feeling of accomplishment in reaping the results of hard work, the confidence in knowing you have a reasonable grasp of the investing world, the freedom of knowing your kids and the government will not have to support you in your old age and the ability to give to those in need and make significant investments in charitable organizations.

Did your life change?

Overall, financial freedom has been a blessing, but money has not changed who we are.

Does anyone know you're a millionaire?

Only my wife and I (know we're millionaires). Our kids are now all out of college (debt-free) and are starting to realize we are.

Any plans to retire early?

Planning to retire soon.

Looking Back

Anything you would do differently?

I would have had less fear. Coming from a family who thought any investment riskier than putting all your money in a mattress was too risky, I was afraid of real estate and the stock market.

If you avoid excessive leverage in real estate, and all leverage in the stock market, success over long periods is inevitable.

If you start in your 20s, as we did, you have a long time to invest.

What advice would you give to your younger self?

Start even earlier on Roths and maximizing my 401(k) contributions. Time is the real magic ingredient.

Also, don't listen to the smart money people who say today that the best years of the stock market are behind us and that unfortunate young people today can expect only mediocre returns over the next 20 years.

Warren Buffett, whom I greatly admire, said that very thing over 20 years ago when I first started buying stocks. He was very wrong then, and so are the people, including Buffett, who say that now.

Also, I would share the lesson that there are no experts in investing who know which stocks are going to take off or tank, including yourself. There are only those who get lucky for a while and con others — and sometimes themselves — that they have special powers.

As John "Jack" Bogle said, Nobody knows nothing. Realizing this is a key step in becoming a wise investor.

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

• Thinking, Fast and Slow by Daniel Kahneman
• Rich Dad Poor Dad by Robert Kiyosaki
• The Millionaire Next Door by Thomas Stanley and William Danko
• Warren Buffett's annual Berkshire Hathaway shareholder letters

Did you work with a financial adviser?

No. My experience in knowing people in the financial advice business is they are focused on their returns, not yours. My financial education mostly came from reading Money magazine — which was acquired several years ago by Kiplinger — religiously for the past 30 years and practice through actual investing.

Keeping fees to a minimum is a big key to success.

Today, when a financial adviser tries to pitch me to become their client, I can ask them a couple of investment or tax questions that show whether their education is subpar.

Did anyone help you early on?

The key kickstart was a cassette tape series about success that my mom gave me while I was a college student to listen to, by the late Pat Robertson.

That was the first time I heard basic financial principles such as the power of compounding.

Looking Ahead

Plans for your next $1 million?

That's well in the rearview mirror now. The first million is truly the hardest to make.

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

Live below your means, put your savings in a low-cost index fund and don't touch it.

Take advantage of Roth accounts as early as possible and get the full company match on your 401(k).

For a young person, (I would advise them) to start with generosity. My religious background encouraged me to budget a significant amount to give to charity and those in need.

This seems contradictory, but doing so when you are young with a small amount of money makes it easier to do so with a bigger amount later.

It also frees you from the stress that comes with money and gives you a purpose that matters.

Do you have an estate plan?

Yes. We have set up trusts to avoid probate and to help our adult children not receive a windfall all at once that could have negative consequences.

What do you wish you'd known …

Before you retired? Almost there, so can't answer yet. However, it seems from my research that planning is key. Probably, at least for a seasoned investor, the planning for the mental, emotional and physical side is more important than the financial side.

When you first started saving? Not sure I would change a thing. The joy of discovery along the way is part of the process.

When you first started investing? Again, not sure I would change a thing. I made mistakes and learned from them. By starting early with a small amount of money, the cost of those mistakes was small compared to the value of the lessons.

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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• Can Money Buy You Happiness? Yes, It Can. However…

If you have millions saved in your 401(k) and IRA, that feels like a win, and it is. But there's one way a large balance quietly works against you: The more money sitting in tax-deferred accounts, the more likely the IRS is to tax the maximum allowable portion of your Social Security check.

That happens by default, unless you plan around it.

Most people who reach this point spent decades doing everything right: Saving consistently, maxing out their 401(k), following the advice they were given. That advice was built for accumulation, not for the withdrawal phase.

This is often called the Social Security tax torpedo. It shows up the same way in almost every retirement plan I, as the founder of MOKAN Wealth Management, review for the first time. It's not a mistake. It's what happens when there's no planning for the tax impact of retirement withdrawals.

How the IRS decides what gets taxed

The IRS uses a number called provisional income to decide how much of your Social Security check gets taxed: Your regular income, plus any tax-free interest, plus half of your Social Security benefit.

Once that number crosses certain levels, your Social Security starts getting taxed, and those levels have never been adjusted for inflation.

Married couples filing jointly start owing tax at $32,000 of provisional income. Above $44,000, up to 85% is taxable. Single filers cross at $25,000 and $34,000.

Frozen since the 1980s and 1990s, these thresholds mean a couple with a modest combined income can land at the maximum simply because the numbers are so outdated.

In retirement, income piles on top of itself:

• Your IRA withdrawal gets taxed
• Your Social Security gets taxed on top of that
• Medicare premiums climb along with both

If almost all your savings sit in a traditional IRA or 401(k), every dollar you pull out to pay the bills is fully taxable, and adding half your Social Security on top pushes most retirees past every threshold in year one, often by a wide margin.

Nobody made a bad decision. They just never built a different kind of account to draw from.

The one exception is a Roth IRA. Money pulled from a Roth doesn't count toward provisional income, doesn't show up on your tax return and doesn't raise Medicare premiums. It's the one source of retirement income the IRS leaves alone.

The three buckets every retirement needs

Think of your savings in three buckets:

• Money you've already paid tax on (a brokerage account, where you owe tax only on the growth)
• Money you haven't paid tax on yet (a traditional IRA or 401(k), where every dollar withdrawn is taxed as ordinary income and where most people hold nearly all their savings)
• Money you'll never pay tax on again (a Roth IRA, which grows and comes out tax-free and is invisible to the IRS)

When almost everything sits in the second bucket, every dollar you withdraw pushes more of your Social Security into the taxable zone.

Tax diversification means having enough in each bucket to choose which dollars to spend each year based on what creates the smallest tax bill.

Roth conversions: Moving money to the third bucket

The most reliable way to build the tax-free bucket is through a Roth conversion: Moving money from your traditional IRA into a Roth IRA and paying income tax on the converted amount that year.

After that, the money and all its future growth come out completely tax-free and never count toward provisional income again.

The window to do this well is shorter than most people think. It typically opens in the years just before or after retirement, before Social Security starts and before required minimum distributions (RMDs) force taxable income onto your tax return. Income is usually at its lowest point during that stretch, which means lower rates on any conversion done then.

Three approaches work well in practice:

• Filling your tax bracket by converting just enough each year to use up room in your current bracket
• Converting larger amounts over a shorter window when a balance is too large for small annual conversions to move the needle in time
• Converting more aggressively when the market is down, since the same number of shares costs less in tax

The biggest mistake is waiting. RMDs force taxable income onto your return at age 73 or 75 whether you need it or not — on a balance that's kept growing with the tax bill still attached.

A before-and-after example

John and Karen, both 60, have $1.8 million combined in traditional IRAs, $200,000 in a brokerage account and almost nothing in a Roth. They plan to retire at 63 and need about $150,000 a year to live on. Their combined Social Security benefit is roughly $70,000 at full retirement age, or about $53,000 if they claim benefits early at 63.

On the default path, they retire and claim at 63, then pull the remaining $97,000 they need straight from the IRA. Provisional income comes out to roughly $123,000, well past the $44,000 ceiling: The 85% maximum, or roughly $45,000 of taxable Social Security, stacked on top of the $97,000 IRA withdrawal.

On the coordinated path, starting at 60 while they're still working, they convert a portion of the IRA to Roth each year, paying the tax from income and the brokerage account so the full converted amount keeps growing tax-free.

They keep converting through their mid-60s and wait until 67 to claim Social Security, when the benefit reaches its full $70,000. By then, the Roth is large enough to cover roughly $40,000 of annual spending tax-free, with the remaining $40,000 from the IRA.

Provisional income lands around $75,000 instead of $123,000: Still above the ceiling, but with substantially less Social Security taxed and a large share of spending arriving with no tax bill.

Same retirement date, same lifestyle spending, a meaningfully different tax outcome for the rest of their retirement. The only difference was starting at 60 instead of waiting until the options had narrowed.

What to do now

Most people don't choose to pay the maximum tax on their Social Security. It happens because they didn't plan for it, which also means it's predictable enough to fix.

Run your own provisional income number. Figure out how much room is left in your current bracket. Then start moving money into the Roth bucket, even a few years before retirement. The window narrows every year you wait.

The Social Security Administration's benefit estimator and IRS Publication 915 are good starting points for running your own numbers.

Related Content

• Don't Let Low Tax Rates Lull You Into the Torpedo Zone
• Will Your Death Double Your Spouse's Tax Bill? 4 Ways Couples Should Prepare for the Widow's Penalty
• How to Retire at 62 and Build a Financial Bridge to a Maxed-Out Social Security Check at 70
• 9 Tax Surprises Retirees Don't See Coming Until It's Too Late
• I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement Income

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.

Owning a vacation home means you'll have a place of your own to retreat to whenever you feel the calling. You won't have to worry about local hotels booking up or getting stuck in a dodgy rental that makes your skin crawl. It's a popular move for setting up the lifestyle and community you want in retirement.

If you don't want to bear the financial burden of buying and maintaining a vacation home on your own, you could opt to buy one with friends. For example, if there's a couple you and your spouse know who tend to vacation in the same spots you prefer, you could choose your ideal destination, buy a home together, and share in the benefits and costs.

In theory, it's a good idea. But it may be more complex and risky than you'd expect.

The right structure is key

At face value, co-owning a vacation home might seem smart. In practice, it's important to have the proper setup, says Raul Gastesi, partner and co-founder of Gastesi Lopez Mestre & Cobiella PLLC.

Set up an LLC

"Two couples buying a vacation home together should not take title in four individual names," Gastesi insists. "They should form a limited liability company, have the LLC purchase and hold the property, and have the couples own membership interests in the company."

The reason, Gastesi says, boils down to liability.

"A vacation home means guests, a pool or a dock, someone else's grandchildren, and, if the couples ever rent it out when they are not using it, a stream of strangers," he explains. "If someone is injured on that property, a claim against jointly held real estate is a claim against all four owners personally, which puts retirement accounts and primary residences into the conversation."

On the other hand, Gastesi says, if the LLC owns the property, any claims that arise are made against the company and its insurance.

"That protection matters most in the short-term rental scenario, which is where a lot of these arrangements end up once the couples realize the house sits empty 10 months a year," Gastesi says.

Gastesi also cautions that an LLC is not a substitute for good insurance.

"The policy needs to be written in the company's name for the right kind of use, but it is the layer that keeps a bad accident from reaching everyone's personal balance sheet," he explains.

Think through financing hurdles

Of course, one pitfall is that if you'll be financing the property, Gastesi warns that a mortgage may be hard to come by.

"Many residential lenders will not write a conventional mortgage to an LLC," he explains. "Some buyers close individually and transfer the property into the company afterward, but that transfer can trigger the mortgage's due-on-sale clause."

Gastesi also points out that a vacation home does not qualify for the capital gains exclusion available on a primary residence.

Know how co-ownership impacts estate planning

Co-owning a home with friends means you'll need to document everything carefully to ensure all parties pay their share and reap equitable benefits. That may seem easy enough to arrange. But what happens if an owner passes away?

According to Gastesi, this is where the LLC earns its keep a second time.

"When the company owns the real estate, each couple owns a membership interest, which is personal property rather than real estate," he explains. "That interest passes under their estate plan. It does not pass automatically to the surviving couple."

What this means, though, is that in the absence of careful planning, that interest may also land with heirs who may not want a vacation home, may not be able to afford their share of it, and may have no relationship with the other couple.

"That is how a friendly arrangement turns into a dispute between people who never agreed to be in business together," Gastesi says. The fix, he says, belongs in the operating agreement, not each couple's will.

"[That agreement] should contain buy-sell provisions triggered by death, divorce, incapacity, bankruptcy, or failure to pay, a right of first refusal in favor of the other couple, an agreed method for setting the price such as an independent appraisal, and payment terms spread over time," he says.

Another reason to go the LLC route?

"If the vacation home sits in a state where neither couple lives, real estate held directly requires a probate proceeding in that second state when an owner dies," Gastesi explains. "A membership interest in an LLC is personal property, which generally avoids that ancillary administration. For a Florida couple with a mountain house in North Carolina, or the reverse, that alone can justify the structure."

Keeping the friendship intact

The right structure and operating agreement can protect you and the couple you're looking to buy a home with financially if one of you passes away. But to preserve the friendship, Kevin Tamlyn, founder of Next Stage Financial, says it's important to set clear ground rules

"Relying on 'we'll just figure it out as we go' is a recipe for a ruined friendship," Tamlyn says. "Sit down together and get crystal clear on the money, day-to-day living, and an exit strategy."

Tamlyn also suggests pooling money into a shared checking account that covers three to six months of expenses like HOA fees, property taxes, insurance, utilities, and routine maintenance. Then pay all running costs from that account.

Tamlyn says it's also important to agree on how to split peak dates.

"A simple rotation, like flipping prime summer weeks or alternating Thanksgiving and Christmas each year, prevents quiet resentment," he insists.

Additionally, establish a clear policy on guests and pets. Also, spell out what happens if one couple wants or needs out.

"Life changes," Tamlyn says. "Someone might need cash for medical expenses, want to move closer to grandkids, or simply stop using the home. Agree on how you’ll value the home when someone wants to leave."

Gastesi agrees and says a strong operating agreement could be the ticket to keeping the friendship intact.

"Its job is to absorb the disagreements so the friendship does not have to," he explains.

Finally, Gastesi says, each couple should have their own attorney review the operating agreement to ensure that they're comfortable with its contents.

"It costs a little more at the start," he says. However, "it's the clearest signal that both sides understood what they signed, which is exactly what you want on the record if the arrangement is ever tested."

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