If you're years into an income-driven repayment plan and working toward student loan forgiveness, there is an important number you may not have been tracking: The potential tax bill at the end.

For five years, most student loan forgiveness received favorable federal tax treatment. The American Rescue Plan temporarily excluded qualifying student loan debt forgiven from 2021 through the end of 2025 from federal taxable income.

That temporary protection has now expired. For qualifying income-driven repayment forgiveness that occurs on or after January 1, 2026, the amount discharged is generally included in taxable income for federal purposes.

That doesn't mean forgiveness suddenly stopped being valuable. It does mean borrowers need to look at the entire financial picture rather than focusing only on bringing the loan balance to zero.

The good news is that for most people pursuing long-term forgiveness, this "tax bomb" should not come as a surprise. You may have years to prepare for it.

What the student loan 'tax bomb' actually means

The student loan "tax bomb" sounds more dramatic than the mechanics really are. If you have $50,000 of student loan debt forgiven, you do not suddenly owe the IRS $50,000. Instead, the forgiven amount is generally added to your taxable income for that year.

For example, suppose you earn $80,000 and $50,000 of your remaining student loan balance is forgiven through an income-driven repayment plan. Very broadly, you could be looking at income closer to $130,000 for federal tax purposes before factoring in deductions, exclusions and other parts of your return.

How much additional tax that creates depends on several things, including your filing status, other household income, deductions, credits and the tax brackets that apply in the year your debt is forgiven.

That is why I would not use a simple formula such as "forgiven balance multiplied by your tax bracket." Our tax system is progressive, and everyone's situation is different.

What matters is understanding that a large balance forgiven in a single year can create a meaningful one-time tax liability.

You may also receive a Form 1099-C reporting canceled debt after the debt is forgiven.

Not all student loan forgiveness is taxable

This is an important distinction because the 2026 change does not affect all forgiveness programs in the same way.

Public Service Loan Forgiveness (PSLF) remains federally tax-free. If you qualify for PSLF and have your remaining Direct Loan balance forgiven after completing the required qualifying payments and employment requirements, the amount forgiven is not considered income for federal tax purposes.

Certain other discharges can also qualify for tax-free treatment. Under current IRS guidance, student loan debt discharged because of death or total and permanent disability may be excluded from federal taxable income, subject to applicable IRS requirements. Certain work-related loan cancellation and repayment assistance programs can also receive favorable tax treatment.

The borrowers who need to pay the closest attention are those expecting a remaining balance to be forgiven at the end of an income-driven repayment period.

And those timelines are changing. Depending on your loans and repayment plan, forgiveness may be available after different repayment periods. The new Repayment Assistance Plan (RAP), for example, provides forgiveness of a remaining eligible balance after 30 years of qualifying payments.

So before estimating any future tax bill, make sure you know which repayment plan you are actually on, how much qualifying time you have accumulated, and when forgiveness is realistically expected.

Don't forget about state taxes

Federal taxes are only one part of the calculation.

Your state may also treat forgiven student loan debt as taxable income, and state treatment can vary considerably. Federal Student Aid specifically advises borrowers that income-driven repayment balances discharged beginning in 2026 may also result in state taxes, depending on where they live.

If you live in a state without an individual income tax, that part of the equation may be much simpler. But if your state taxes income, don't automatically assume it will treat student loan forgiveness the same way the federal government does.

This is one of those areas where I would check your state's rules as you get closer to forgiveness rather than relying on something you read several years earlier. State tax laws can change long before a borrower reaches the end of a 20-, 25- or 30-year repayment period.

High earners should run the numbers again

For higher-income borrowers, this tax change deserves even more attention.

The strategy behind income-driven forgiveness is fairly straightforward. You make payments tied to income for the required period, and if a balance remains at the end, it may be forgiven.

But if a significant amount is forgiven during a year when your income is already high, adding that canceled debt to your taxable income can make the final cost of forgiveness higher than you may have originally expected.

That doesn't automatically make forgiveness the wrong strategy.

It simply means the right comparison is no longer, "How much will I pay before my remaining balance is forgiven?"

The better question is, "How much will I pay in student loan payments plus taxes on the forgiven balance compared with paying the loan off another way?"

That distinction matters.

For some borrowers, pursuing forgiveness will still save a substantial amount of money. For others, particularly those whose incomes have increased significantly since they first entered repayment, aggressive repayment or refinancing may deserve another look.

If you are considering refinancing federal student loans, remember that refinancing with a private lender means giving up federal benefits, including income-driven repayment options and federal forgiveness programs. That decision is generally irreversible, so compare the full long-term cost before making the move.

If refinancing does make financial sense for your situation, you can compare available rates through a marketplace such as Credible rather than evaluating lenders one at a time.

One provision could reduce the tax bill: Insolvency

There is another part of the tax code that borrowers should know about, particularly those expecting a large amount of debt to be forgiven.

Canceled debt can sometimes be excluded from taxable income to the extent you were insolvent immediately before the debt was canceled.

In simple terms, insolvency generally means your total liabilities exceeded the fair market value of your total assets.

Suppose, for example, that immediately before forgiveness your liabilities exceeded your assets by $30,000, and $50,000 of student debt was canceled. Depending on your circumstances, the insolvency exclusion could potentially apply to part of that canceled debt.

This is not something I would casually estimate. The IRS looks at your financial position immediately before the cancellation, and claiming the exclusion generally involves Form 982.

If you think you may qualify, work with a tax professional who understands cancellation-of-debt income.

What to do now if you're working toward income-driven repayment forgiveness

You don't need to overhaul your repayment strategy because of a tax bill that may be years away. I recommend adding the tax calculation to your planning now.

First, confirm when you are actually eligible for forgiveness. Log into StudentAid.gov, confirm your current repayment plan, and understand how much qualifying repayment time you have accumulated. Federal repayment options have changed significantly, so don't base your planning on what your loan terms looked like several years ago.

Next, estimate what your balance could be when forgiveness occurs. The number that matters is not what you owe today. It is the projected balance that could actually be canceled.

Then estimate the potential tax. You do not need an exact number 10 years in advance. You need a reasonable range. Revisit that estimate as your income, balance, and tax laws change.

Start building a tax reserve if the potential liability is meaningful. If you expect a $10,000 or $20,000 tax obligation, setting aside money gradually over several years is far easier than finding it all at once after forgiveness.

Finally, rerun the forgiveness-versus-payoff calculation periodically. A strategy that made perfect sense when you earned $60,000 may look very different when you earn $160,000. Your income, family situation, interest rate and loan balance can all change over a repayment period that lasts decades.

Your student loan strategy should be allowed to change with them.

Forgiveness can still be valuable

The return of federal taxation on IDR forgiveness should not scare borrowers away from forgiveness. But it should change the way you calculate its value. For several years, it was easy to think about forgiveness as the finish line: Make the required payments, reach the end of the repayment period, and watch the remaining balance disappear.

Beginning in 2026, many borrowers need to add one more step: What happens to my taxes when that balance disappears?

If you are still many years away, that is actually an advantage. You have time to estimate the liability, build savings for it, monitor changes in the law and periodically ensure forgiveness still makes financial sense.

A future tax bill is much easier to handle when it has been part of the plan all along.

And with student loan rules changing as frequently as they have in recent years, I would make a habit of reviewing that plan regularly rather than assuming the strategy you chose today will remain the best one 10 or 20 years from now.

Related Content

• Student Loan Tax Traps to Avoid in 2026
• The $2,500 Tax Break for Paying Your Student Loan
• Student Loan Shake-Up: What the OBBB Means for Parent PLUS Borrowers, From a Financial Aid Expert
• Taking Out a Private Student Loan Before the Fall Tuition Bill Deadline? 5 Essential Steps Before You Sign
• Parent PLUS Caps Just Changed the Math on Paying for College: How Will You Fill the Gap?

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.

In a rate-changing environment with persistently high prices, where you store your cash could be the difference between growing your wealth or eroding your purchasing power — to the tune of hundreds of dollars.

This is especially true if you're carrying a larger balance like $50,000. Thankfully, there are smart places to park it and earn a healthy APY while investigating other options.

Since there are no one-size-fits-all solutions, here are several common scenarios and strategies for each.

Scenario 1: I want to keep liquidity as I investigate all options

In this case, the smart bet is to open a high-yield savings account at an online bank. Online banks offer higher APYs with minimal account fees, and you can separate this $50,000 from the rest of your cash. This can be critical if you've never been in this situation.

You can find and compare some of the best high-yield savings accounts using this Bankrate tool:

Another reason high-yield savings accounts are useful is that they offer variable interest rates. This is essential right now, as the Federal Reserve will likely issue another rate hike in December, unless there's an end to the Iranian War.

CME FedWatch projects there's a high likelihood the Fed will issue a quarter-point rate hike at its December meeting. When the Fed hikes rates, it can raise the APYs on your savings account, helping you to earn more.

Of course, if you're not concerned with liquidity, better options are available.

Scenario 2: I want to earn now, without tying up money for years

$50,000 is a sweet spot because it can unlock a CD option that earns excellent rates right now: A jumbo CD. The best jumbo CD rates offer you APYs up to 4.60%, well surpassing the best high-yield savings accounts.

To demonstrate, if you were to take your $50,000 and open a one-year jumbo CD with Finworth at 4.35% APY, you'll earn $2,175.

But before you jump at this opportunity, keep these things in mind:

• Interest: Interest earned on a CD is taxed as ordinary income, so make sure to factor this in as part of your plan.
• Early withdrawal: If you need to break open your jumbo CD, you could lose months of interest. This could easily be hundreds of dollars, so only take this approach if you're confident you won't need the cash for a year.
• Maturity: Some banks will automatically renew your CD. Set a reminder on your phone a few weeks before it matures so you can explore other options.

If you don't want to put all of your eggs in one basket, here's a smart alternative.

Scenario 3: I want a mix of short- and long-term solutions

This is where a CD ladder could come in handy. With it, you don't place your $50,000 into one CD. Instead, you spread it across multiple CDs with varying maturities.

Here's an example of how this could work:

This approach lets you use short-term and long-term CDs. You'll have quick cash flow from some of your funds, allowing you to pivot in response to rising inflation. If the Fed hikes rates again, you'll also be better positioned to capitalize on higher APYs.

You'll also have some money earning a much higher rate than a HYSA. This gives you peace of mind that you're maximizing your cash without taking on risk.

You can use this Bankrate tool to find the CD terms that work for you and build your own ladder:

Balancing different strategies

Of course, if you don't need some of the money for years and don't mind risk, a smart play is to invest it in the stock market. Adding index funds tracking broad markets, such as the S&P 500, provides instant diversification and historically higher growth.

Here's a look at how you can balance savings with investing:

Ultimately, if you're looking for smart places to park $50,000 away from market volatility, you have options. The smartest approach is to devote some of your money to short-term CDs so you can earn more than a high-yield savings account, while also allocating some to index funds, where you could earn substantially more.

With an uncertain rate environment and higher inflation, these solutions help you reach your savings goals while shielding your purchasing power from future inflation.

Related content

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• 5 Best Index Funds for Long-Term Growth
• Where's the Best Place to Store $25k Now?
• Is a CD or High-Yield Savings Account Better for Your Cash?
• Best CD Rates

Anthropic, which is a leading developer of artificial intelligence (AI) frontier models, is expected to launch its initial public offering (IPO) in November, raising up to $100 billion at a $2 trillion valuation.

This will make it the biggest IPO ever, exceeding SpaceX (SPCX), which initially raised $75 billion in its public offering earlier this year.

"I do think there will be a bit of hype and frenzy around the name, given that it will be the first major generative AI pure play to come to market," says Avery Marquez, director of Investment Strategies at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. "We have seen investors be discerning this year, but I don't think there will be a question of demand for Anthropic's story."

Still, investors will need to weigh Anthropic's explosive growth against its massive infrastructure spending, fierce competition, safety risk and lofty valuation before deciding whether to buy the IPO.

The story of Anthropic's growth machine

Dario and Daniela Amodei cofounded Anthropic in January 2021. Before this, they served as executives at OpenAI. The siblings saw an opportunity to build a company focused on AI models that emphasized safety and reliability.

During its first few years, Anthropic concentrated on research and development. Then, in March 2023, the company released Claude, a sophisticated AI chatbot. It competed with OpenAI's ChatGPT and Google's Bard (which eventually became Gemini).

Anthropic initially received less attention than its competitors, but that changed in May 2025, when the company released Claude Code. It was an instant hit with software developers. A key differentiator was the system's use of AI agents, which could handle complex development tasks, navigate software repositories, generate and modify of code, debug applications, run tests and manage changes.

Building on these capabilities, Anthropic launched Claude Cowork in early 2026. This enabled agentic capabilities across various categories, including finance, sales and legal. Cowork also included extensive security systems such as identity and access controls, auditing, usage management, and regulatory protections, including HIPAA.

As a result, Anthropic experienced a surge in demand from enterprise customers. In February 2026, the company announced that the annual run-rate for revenue was $14 billion, compared to zero three years earlier. More than 500 customers spent more than $1 million.

At the end of July, Anthropic's annualized revenue hit $65 billion and could reach $100 billion to $120 billion by the end of this year.

The risks of investing in Anthropic

While the growth is impressive, Anthropic faces major risks.

First, the company has signed agreements for at least $518 billion in AI infrastructure spending for the next decade. About 80% of these commitments are non-cancelable.

This is a huge bet that demand for AI services will keep growing at a rapid pace. But several signs suggest customers are having difficulties monetizing their investments. A survey from the Boston Consulting Group found that fewer than half of companies are generating meaningful value from AI, even as spending on the technology has nearly doubled over the past year.

It's no surprise, then, that customers are looking for more affordable models, including open-source options.

There are also safety risks. In September, Anthropic disclosed several incidents in which its AI models accessed real-world systems without authorization during cybersecurity evaluations. In one case, its Claude Mythos 5 model uploaded malicious software to a public repository, which was installed on 15 external systems. While these incidents occurred in misconfigured testing environments, they highlight the potential dangers of increasingly autonomous AI systems.

"Frontier AI still carries significant technical, governance and deployment uncertainty, so the question is whether these companies can meet public-market expectations without letting quarterly pressure outrun the systems needed to deploy safely and reliably," says Afsheen Afshar, founder and managing partner at Pilot Wave Holdings.

When is the Anthropic IPO?

On October, 26, Anthropic released its S-1 registration statement, which provided detailed financial results, risk factors and other disclosures.

While no exact date has been given yet for the offering, Securities and Exchange Commission (SEC) rules stipulate that a company must file its S-1 paperwork at least 15 days before its IPO roadshow. This suggests the Anthropic IPO will happen by mid-November

According to the filing, Anthropic plans to trade on the Nasdaq under the ticker symbol "ANT."

Should you buy the Anthropic IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. And in the "froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

As for retail investors, whether or not you buy the Anthropic IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of ANT stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.

Related content

• Hot Upcoming IPOs to Watch
• 10 Major AI Companies You Should Know
• The Pros and Cons of Investing in an IPO (Plus, How to Do It)
• Rethinking Your IPO Strategy: Why Patient Investors Can Win by Waiting Out Hot IPOs
• Invested in Index Funds? Here's What You Need to Know About Mega-Cap IPOs

When people think of Roth options, most think of a Roth IRA. Even though 95% of employers offer a Roth 401(k) plan, less than 20% of employees take advantage of it.

I worked as a consultant in the retirement industry for decades and I was part of the 80% that didn't contribute to Roth in my 401(k). Almost five years into retirement, it's one of my biggest regrets.

The statistics show that, like me, most people continue to contribute pretax to their 401(k). They don't question the conventional wisdom that their tax bracket is probably higher while they're working than it will be in retirement. They take the deduction now and defer the income tax until retirement when they're likely in a lower bracket. It makes sense.

For a lot of Boomers and Gen Xers, Roth 401(k) wasn't an option they skipped — it simply wasn't available. Roth in 401(k) plans didn't exist until 2006, and most employer plans didn't add them for years after that.

As a Gen Xer, that was me: Roth didn't reach my plan until my mid-forties, when I was in my highest-earning years and wanted to reduce my taxable income as much as possible.

Now, almost five years into retirement, I wish I had given Roth 401(k) more consideration. I'm not alone in feeling this way.

Roth conversions increased 41% year-over-year as of Q1 2026, according to Fidelity, indicating that many people who previously contributed on a tax-deferred basis now want the benefits of tax-free growth.

Why the regret?

1. Paying tax on the compounding when it could have been tax-free

Reducing my taxable income while I was working helped, but it was only going to help once. Had I contributed to Roth instead, it could have grown tax-free for decades. And the income tax I'd have avoided on all that growth would have outweighed the tax I saved on the contributions themselves.

When you contribute on a pretax basis, you're not just deferring tax on what you put in, you're deferring it on everything that money earns for decades.

Take a person earning $100,000 who contributes 6% to a 401(k) and receives a 4% employer match over a 40-year career, working and retiring in Florida (no state income tax) at 65. Over those 40 years, they earn a 5% annual return.

For simplicity, this assumes a flat $100,000 salary with no raises, a 22% federal tax rate while working, and a $75,000 annual draw in retirement taxed at 15%.

Real careers and tax brackets are messier than that. The point isn't to predict your exact outcome — it's to illustrate how the tax owed on decades of compounding growth compares to the tax saved on the contribution alone. Before making the Roth versus pretax decision, it's important to run your own numbers with your tax accountant or financial adviser to see how it plays out for your specific situation.

This example also assumes the employee contributes the same dollar amount either way. The Roth contribution reduces take-home pay more because the tax is paid upfront. A pretax saver could invest the tax savings elsewhere, which would narrow the gap. But many people don't, and that's part of the point.

The company match stays pretax in both scenarios, since only about one in five plans currently offer a Roth match.

In this example, if you elect Roth contributions throughout your career, you'd get to retirement with $761,000 of income-tax-free money. You contributed, invested and paid income tax on $6,000 every year for 40 years ($240,000 in total). The other $521,000 is pure tax-free growth. Compare that to the pretax side, where the entire $1.2 million balance is taxed. It feels different, doesn't it?

2. A greater long-term average rate of return widens the gap

The example above uses a conservative 5% return. If the stock market's long-term return is higher, the difference can become more pronounced. Here's the same example: Same contributions, same 15% tax rate, using a 7% return instead of 5%.

The only thing that changed is investment performance, and by contributing to Roth the difference nearly doubled. The better you do as an investor, the more this decision is worth.

These are hypothetical examples and not representative of any specific situation. Your results will vary. The hypothetical rates of return used don't reflect the deduction of fees and charges inherent to investing.

3. Where you work and where you retire both matter

To keep the math simple, the example above assumes no state income tax. But state taxes can change the equation.

Work in a high-tax state and retire to one with no income tax, and pretax may work in your favor.

But if you flip it — work in a no-tax state and retire in one that taxes retirement income — those same pretax dollars could end up subject to both federal and state tax on the way out.

4. Pretax only means grossing up every withdrawal to get what you want

Want to withdraw $10,000 out of your pretax 401(k)? You'll have to take out $11,765 if you're in a 15% tax bracket to net the $10,000. With Roth, if you want $10,000, you withdraw $10,000.

5. Roth conversions mean writing a check you feel

You have to pay income tax regardless of whether you contribute to Roth initially or convert the assets down the road. But paycheck withholding happens automatically, before the money ever reaches your account. A conversion means writing the government a bigger check, since you're also paying tax on the earnings. And writing a check just doesn't feel the same.

6. Roth 401(k): No RMDs

With the SECURE 2.0 Act, as of 2024, original owners of a Roth 401(k) (or Roth IRA) don't have to take RMDs from that account during their lifetime.

7. Heirs inherit money and the tax

When my dad passed away in 2018, he left me some money in his traditional IRA. I was 50, still working and in some of my highest-earning years, so every required distribution added to my taxable income at the worst possible time.

Because he passed in 2018, I was able to stretch those distributions over my own lifetime. That option largely went away for non-spouse heirs beginning in 2020. Those heirs now have 10 years to empty an inherited pretax account, which means bigger distributions and bigger tax bills, often during their own highest-earning years.

When I've had to take RMDs on my dad's IRA, I've paid tax at whatever rate I happen to be in that year. Had it been Roth, those withdrawals would have been income-tax-free.

To Roth or not to Roth?

Whether you plan on "dying with zero" or leaving a legacy to your heirs, to Roth or not to Roth is something to carefully consider. And it doesn't have to be either/or — it can be both.

When you're living in retirement on a fixed budget, having some portion of your assets income-tax-free is confidence that's hard to put a number on.

I can't go back and change my 401(k) contribution elections. But if you're still working and have a Roth option sitting unused, you can. It's worth considering during annual enrollment this year.

Related Content

• Roth 401(k) vs 401(k): Which Is Right for You?
• Roth 401(k) Changes: New Rules to Know for 2026 Taxes
• Roth 401(k) Contribution Limits for 2026
• Should You Convert Your Traditional 401(k) to a Roth?
• I'm a Retirement Consultant: This Is the Single Most Important Planning Step I Learned After I Retired

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.

Dear Wealth Wise: I'm 29 and trying to build retirement wealth. I have most of my assets in my Roth IRA, 401(k), and HSA: over $270k in total, with about $220k in the Roth IRA. I mostly hold individual stocks, and I'm not sure whether it makes more sense to switch to index funds and accept market-adjacent returns or stay concentrated. I don't want to lose what I've built, but I don't want to give up valuable growth this early in my retirement savings. I am ready for a "set it and forget it" portfolio, but I also have experience researching stocks, so I'm wary of going all in on index funds. — Passive Curious

Dear Passive Curious: Before we dive into your question, we first want to note how far ahead of most young investors you are. If you left your total savings of $270,000 invested and didn't save another penny, you would have $2.05 million at age 60, assuming a conservative 7% return. So, well done!

While your youth gives you more runway to experiment than older investors might have, your question is spot-on for anyone weighing the upside of stock picking against the simplicity of index funds.

Many investors prefer index funds over taking their chances with a portfolio of individual stocks. The S&P 500 index has rewarded investors with an average annual return of about 10% (or about 7% after inflation) since its inception in 1957.

In fact, Warren Buffett, one of the most successful investors of our time, agrees that everyday investors are well served by loading up on index funds over the long term.

In his 2013 Berkshire Hathaway shareholder letter, Buffett said, "The goal of the non-professional should not be to pick winners — neither he nor his 'helpers' can do that — but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal."

At 29, you might easily have a 30-year window to build wealth. Will a shift to index funds mean selling your goals short? Here’s what the experts have to say.

It’s a matter of how much risk you want to take on

The good thing about being 29 is that you’re young enough to take on risk in your portfolio. But the question you want to ask, says Danielle Arlotta, CFP and founder at Sole Financial, is "Can you continue to pick stocks for the rest of your life?"

"I’m sure that you’ve heard most active managers underperform their benchmark," Arlotta says. "It’s good that you’ve done your research and know what you’re buying. It sounds like you have been able to outperform the market as well. But one bad pick and you can also suffer significant losses."

As Arlotta explains, indexing works because it gives you instant diversification, which helps reduce portfolio volatility. As you get older and your risk tolerance starts to wane, it's important to recognize that benefit.

Keep in mind that broad indices like the S&P 500 are market-cap weighted, meaning that just a few mega-cap tech giants (like the Magnificent 7) make up a big slice of the fund. If you want true broad-market diversification, consider pairing an S&P fund with an international index, for example.

Holding individual stocks isn’t gambling

You’ll often hear that index investing is safer than holding stock individually. Vincent Garaventa, CFP and vice president at Bauman Wealth Advisors, says that has some validity. But not every individual stock holding is speculative.

A well-researched, diversified portfolio may not be risky off the bat. The key, according to Garaventa, is to monitor your investments and rebalance as needed over time. You don’t want to remain too concentrated in a single company or market sector, so you’ll need to actively manage your portfolio.

"If done in the right amounts with the right portion of the portfolio," Garaventa explains, "there can be value for some diligent, disciplined investors in mixing in individual stocks or more targeted, themed investment funds."

Consider a hybrid approach: The core-satellite strategy

You may have the time and energy to follow individual stocks now, including the due diligence of reading 10-K reports and listening to earnings calls. But if you start a family or your work intensifies, index funds may look far more attractive. Arlotta says there’s nothing wrong with shifting to a "set it and forget it" strategy, but it doesn’t have to be all or nothing.

"Since you already have a majority of individual stocks, you can allocate all future contributions to index funds and rebalance when necessary," she says.

Arlotta's solution is easy to manage and avoids selling your stock positions. But there's another approach if you want to be more hands-on.

Garaventa suggests a core-satellite strategy, where the "core" of your portfolio consists of stable index funds and the "satellite" holdings can aim to beat the market.

"You siphon off a smaller portion of your portfolio and allocate it to your higher-risk investments, like individual security selection, and then run the core of your portfolio in a variety of index funds in a set it and forget it type of plan," he says. "This is a great way to balance the profit potential of individual stock selection with the high probability of index investing."

Advisers typically suggest that investors following the core-satellite strategy devote 80% or 90% to the core index fund portfolio and the remaining 20% or 10% to stocks. Many advisers recommend that no individual stock make up more than 5% of the portfolio.

Garaventa says it’s also important to consider the rate of return your plan needs to meet your goals.

"Sometimes that rate of return may be lower than one might anticipate, and investors may decide to use a higher-probability, index-only strategy where they’re not seeking significant outperformance beyond the benchmark because they’ve run the numbers and understand that their plan doesn’t require them to outperform the index," he says.

Of course, Garaventa acknowledges that most investors are wired to want higher returns, even if those returns aren’t needed to cover their future spending needs. It’s less about greed than ambition.

Plus, a 29-year-old investor doesn’t know what the future holds in terms of career growth, inflation, and AI-related disruption. Having more money than less only puts you in a stronger position to manage whatever the future holds.

At the same time, Garaventa says, "It’s important to consider the drawbacks and the higher risk. In my view, if you don’t want to leave individual stock selection behind, there’s value in doing both, as long as you do it in portions that are reasonable for your plan."

Keep in mind that there are tax ramifications for the location (or type of account) where you've stashed your funds. On the plus side, you can reallocate the $220,000 in your Roth IRA without a tax hit. That would not be the case if those funds were held in a taxable brokerage account. But if one of your stocks suffers a permanent loss in your Roth account, you can't harvest tax losses.

You’ve already won the hardest part of the early wealth-building game. Moving into index funds isn’t conceding defeat — it’s building in your lead so you can spend less time managing your money and more time living your life.

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

Read More

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• Why Invest In Index Funds When Prediction Markets Pay Big?
• Invested in Index Funds? Here's What You Need to Know About Mega-Cap IPOs
• They Retired With $10 Million. Should They Still Invest Aggressively?

Spend two weeks in Spain and you may end up believing that living costs are less than what they are in the U.S.

A cup of coffee is cheaper. Dinner is cheaper. Apartments are cheaper. You begin to wonder how far your retirement budget might stretch in Valencia.

But there's a problem with that. Tourists don't pay a month's rent. They don't buy groceries every week, insure a home, pay utilities or local taxes. The cost of living varies enormously from one Spanish city to another.

The mistake is assuming that what you spend on vacation is a useful indicator of what you'll spend as a resident.

A vacation is not a household budget

Consider Benicàssim, a beach town in the Castellón province about 50 miles north of Valencia.

It is a popular vacation destination, and many visitors browse real estate listings before they go home.

(For dollars, use an exchange rate of $1.16 per euro.) A two-bedroom apartment might cost €120 a night, and a lunch of a bocadillo, a soft drink and an ice cream will cost around €12 a head. A three-course dinner with wine can be expected to run about €40.

I drove an electric car during my visit there, so instead of using my own transportation costs, I substituted the approximate cost of a midsize rental car from Valencia airport, including fuel and parking.

For two people, the resulting vacation day looked like this:

Now, put the same couple in Valencia, but as residents rather than visitors.

A midrange two-bedroom apartment, utilities, internet, groceries and public transportation come to about €2,520 a month, or €84 a day. Add occasional restaurant meals and other expenses, and that gap narrows.

The vacation budget also contains a cost that disappears when you become a resident: Nightly accommodations. A long-term rental in a less expensive location can dramatically reduce the daily cost of living.

There are other expenses that don't come into play on vacation: Health insurance, home insurance, professional fees, taxes and the costs of maintaining a household.

There is no single cost of living in Spain

The useful question isn't "How much does it cost to live in Spain?" It's "How much would it cost to live the way I want to live in the Spanish city of my choice?"

Consider the same hypothetical household across five cities — a retired couple renting a midrange two-bedroom apartment, without a car or school fees. These are monthly estimates for rent, utilities, groceries, public transportation and internet. They exclude eating out, leisure, health insurance and taxes.

* Dollar figures use an exchange rate of $1.16 per euro. Costs exclude eating out, leisure, health insurance and tax

The striking number isn't the difference in the grocery bill. It's the difference in rent.

The same basic household budget costs about €1,145 more each month in Madrid than in Alicante — nearly €14,000 a year — largely because of housing.

These aren't necessarily trade-offs between an attractive city and somewhere you'd never want to live. Alicante and Málaga both have international airports and major medical facilities. Valencia has excellent public transportation and a large international community.

Go further down the list, and the numbers can fall again. Granada and Badajoz, for example, can offer substantially lower housing costs than Madrid or Barcelona. The table also holds lifestyle constant at a midrange level. Change that assumption, and the totals move substantially.

A useful exercise before moving is to take your last 12 months of housing, utilities, groceries and transportation costs, divide that number by 12, and compare it with the city you're considering. Then, add the expenses you would incur in Spain but not necessarily at home.

The expenses tourists don't see

Healthcare is one area in which Americans moving to Spain can see significant savings, particularly if they're accustomed to paying U.S. private-insurance premiums. Private health insurance is required for some residency applicants, and premiums vary considerably according to age, location, medical history and coverage.

For example, 2026 quotes obtained for policies meeting Spanish immigration requirements included:

Those are examples, not universal prices. Older applicants, people with medical conditions and people seeking broader coverage can face substantially different premiums.

Utilities are not necessarily cheaper than in the U.S., and older Spanish buildings might have limited insulation or inefficient heating and cooling. A January heating bill in Madrid is something a July visitor is unlikely to factor into a budget.

Transportation matters, too. A couple who can live comfortably without a car can save substantially compared with one that needs to own, insure, fuel and park a vehicle.

Then there are taxes. Spain generally taxes residents on worldwide income, while Americans continue to have U.S. filing obligations. Tax rules also vary among Spain's autonomous communities, including rules affecting wealth and inheritance.

Someone moving to Spain for employment might also qualify for a special tax regime known as the Beckham Law. Eligibility is limited, and retirees generally won't qualify, but employees transferring to Spain (or some remote workers) should have a specialist determine whether it applies.

Income matters as much as expenses

Spain can feel inexpensive to an American earning or receiving U.S.-level income while feeling expensive to someone living on a Spanish salary.

Spain's average gross annual salary was €29,540 in 2024, according to the Instituto Nacional de Estadística. The median was €24,497, while the most common salary was €16,520.

That doesn't mean Americans moving to Spain are automatically wealthy. It means the same restaurant bill, rent payment or utility charge can represent very different proportions of household income.

It also helps explain why a place can seem inexpensive to a visitor but feel expensive to a resident.

If your income comes from a U.S. pension, Social Security, investments or a remote U.S. job, compare that income with your projected Spanish expenses, then model the tax consequences.

Don't forget the currency

The Alicante couple's expenses are €2,295 a month whether the dollar rises or falls.

At an exchange rate of $1.16 to the euro, that's about $2,660. At $1.03, the same €2,295 would cost about $2,364.

Nothing in Alicante has changed; only the exchange rate has.

Over a long retirement, currency movements can materially affect a dollar-based household budget. Anyone relying primarily on U.S.-dollar income should stress-test the budget against an unfavorable exchange rate move rather than assuming today's rate will persist.

Budget for the year, not the month

A monthly budget is only a starting point. Some expenses arrive once a year: Property taxes, insurance renewals, professional fees and perhaps a flight home. Others might arrive only once, such as visa and legal costs, deposits, shipping, furnishing an unfurnished rental or buying a car.

A reasonable approach is to build a full 12-month budget, then add a separate contingency reserve. Stress-test it against higher utilities, an unfavorable currency move or an unexpected trip back to the U.S.

Turn your vacation into a scouting trip

A vacation can tell you whether you like Spain. A scouting trip can tell you whether you can afford to live there.

Book accommodations in a residential neighborhood in your price range. Visit a supermarket and do a real grocery purchase. Use public transportation. Price rental car rates.

Look at apartments. Check the neighborhoods and how far they are from supermarkets, medical care and public transportation.

Talk to professionals before you make the move. An immigration lawyer can explain which residency route applies to you. A cross-border tax adviser can model your tax situation under Spanish and U.S. rules. Give each city at least several days.

If a coastal town is on your shortlist, consider returning in winter. A resort that feels perfect in June might look very different in January.

The budget that matters

Spain might indeed cost less, but the size of the saving depends on where you live and how you live. The vacation tells you what coffee, dinner and an apartment cost for a few days; the real budget tells you what the rest of your life will cost.

Moving to Spain has managed more than 700 relocations from the U.S. and U.K. since 2017. You can use our calculator to compare the cost of living across Spain.

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

When I ask pre-retirees with large 401(k)s how they plan to handle the taxes on those accounts, I usually hear some version of the same answer: "We'll wait until we retire. Our income will drop, and we'll be in a lower bracket."

However, "What will my tax rate be the year after I stop working?" is the wrong focus for a household with $2 million or more in pre-tax savings.

It's far more useful to consider what you and your spouse, and eventually your children, may pay in taxes across all the years that money will be withdrawn.

Your deduction today is a decision about decades

Deferring taxes while you work can make sense, and today's deduction is a real benefit.

But a traditional 401(k) or IRA isn't entirely yours to spend. Every dollar that comes out is generally taxed as ordinary income, and the balance that will eventually be taxed keeps growing along with your investments.

At a hypothetical 6% annual return, $2 million doubles to roughly $4 million in about 12 years. That growth is good news, but it also means the pool of income you'll eventually pay tax on may be much larger than the one you're looking at today.

You also won't have full control over when that income shows up. Required minimum distributions (RMDs) generally begin at 73, or 75 if you were born in 1960 or later, and they're calculated from your pre-tax balance whether you need the money or not.

Where 'lower later' tends to break down

Retirement can open a window of lower-income years. But for large pre-tax savers, that window is often shorter than expected.

Income stacks. RMDs add taxable income. Higher income can make up to 85% of your Social Security benefits taxable. It can also trigger Medicare IRMAA surcharges on Part B and Part D premiums, which are based on your tax return from two years earlier.

Market declines leave fewer choices. A downturn strains any retirement portfolio. But if all of your savings are pre-tax, every withdrawal you take to cover spending also adds taxable income. Roth savings don't protect you from market losses, but they give you another account to draw from without raising your tax bill.

A surviving spouse files alone. After one spouse dies, the survivor generally files as a single taxpayer. Household income often doesn't fall by much, especially if the survivor inherits the IRAs, but the tax brackets are roughly half as wide.

Your children inherit the tax bill, too. Most non-spouse beneficiaries must empty an inherited IRA within 10 years, according to IRS Publication 590-B. Those withdrawals are generally taxable, and for many adult children they land during their own peak earning years. Inherited Roth IRAs have distribution rules too, but qualified withdrawals can be tax-free.

None of these factors makes a Roth conversion the right move on its own. But together, they're the reason "we'll be in a lower bracket" isn't the same as "we'll pay less."

What paying tax now can buy, and what it costs

A Roth conversion doesn't avoid tax. You recognize income today and move that amount into a Roth account, where future growth may be withdrawn tax-free if you meet the IRS qualified-distribution rules.

In return, you get more control. A smaller pre-tax balance can mean smaller RMDs later. Qualified Roth withdrawals aren't counted in gross income, so they generally don't increase the taxable portion of Social Security or the income Medicare uses to set IRMAA. And as the original owner of a Roth IRA, you aren't required to take distributions from it during your lifetime.

The costs are just as real. A conversion raises this year's tax bill and can push you into a higher bracket or trigger higher Medicare premiums two years later. Paying the tax from savings outside your IRA uses money you could otherwise keep invested. A conversion can't be undone. And if your future tax rate really is lower, waiting may cost less.

So the real decision is when to recognize income, and whether paying some tax now may lower what your household pays over both spouses' lifetimes.

How to test the assumption

If you're within 10 years of retirement or recently retired, these steps can show whether waiting is really your cheapest path.

1. Sort your savings by tax treatment. List pre-tax 401(k)s and IRAs separately from Roth and taxable accounts. Many couples I work with are surprised by how much of their net worth carries a future tax bill.

2. Project income, not just a rate. Estimate what RMDs may look like alongside Social Security, pensions and planned withdrawals. The question is how much income will land on your return each year, and in which years.

3. Plan for both spouses, and your heirs. Run the numbers for the years after one spouse is gone and for what your children would receive. Those are the years a pre-tax-heavy plan is most likely to cost more.

4. Convert in pieces. A conversion plan doesn't mean moving an entire account in one year. Many households convert enough to use available room in a chosen bracket, then pause in years with a bonus, a business sale or a large capital gain.

5. Line up the tax payment first. Decide how you'll pay the tax, and adjust withholding or estimated payments before you convert. Your tax professional can help you check the effect on Medicare premiums and state taxes.

Make waiting a choice

Waiting until retirement to convert may still be the right answer for you. But it should be a conclusion you reach after comparing your options over both spouses' lifetimes, not a default you accept because it's what most people do.

Every pre-tax dollar will be taxed at some point. You have the most say over when that happens in the years before RMDs and other retirement income begin to stack up.

Projections depend on assumptions about returns, tax law and your circumstances, and they cannot guarantee a lower tax bill. The 6% return above is hypothetical and does not represent any specific investment.

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• The Retirement Move That's Quietly Taxing Your Social Security to the Max (and How Early Roth Conversions Can Help)
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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.

In Sir Terry Pratchett's 1993 Discworld novel "Men at Arms," Captain Samuel Vimes laid out his grand economic theory: a rich man spends $50 on a pair of good leather boots that last ten years. A poor man, who can only afford $10 cardboard-soled boots, has to replace them every year.

After ten years, the rich man still has his expensive boots and dry feet. But the poor man has spent $100 and still has wet feet. As Vimes noted with characteristic cynicism, "The reason that the rich were so rich…was because they managed to spend less money."

Retirees on a fixed income face similar traps with their income taxes.

For instance, maxing out traditional 401(k)s and IRAs to save on taxes during your working years feels like a sensible, frugal choice. But deferring taxes without a plan is the financial equivalent of buying cardboard-soled boots — it gives temporary relief today, only to push you into higher federal tax brackets tomorrow.

The good news? You don't need a fortune in cash to keep your feet dry. You just need to know how to patch your boots in retirement.

How the "Boots Rule" of retirement tax planning works

The "boots rule" of retirement tax planning acknowledges a simple reality: most retirees don't have wads of cash hanging around.

As Sam Vimes alluded to in Discworld, everyone would buy durable, high-quality boots if they could afford the upfront cost — or, put another way, retirees would make the "perfect" financial move if circumstances allowed.

Nowhere is this clearer than in traditional retirement accounts. During your working years, deferring taxes offers an immediate, affordable benefit: get your employer's match, deduct your contributions today, then pay the taxes later.

However, deferring taxes means deferring them on decades of compound growth, creating a mounting tax liability down the road.

Then, when standard financial advice tells you to "just convert your 401(k) to a Roth IRA today," it ignores the immediate, out-of-pocket tax bill that conversion triggers. Just like the worker was forced to keep buying cheap boots, many retirees stay in tax-deferred accounts because they lack the upfront cash needed to buy their way into tax-free growth.

To overcome this, you can become a financial cobbler. Rather than paying a big upfront tax bill all at once, you can patch your financial boots on a modest budget using three core levers:

• Smart timing. Withdrawing money from specific account types during "low-income gap years" (the window between career retirement and when Social Security or required distributions begin) to minimize tax exposure.
• Bracket management. Intentionally filling lower federal income tax brackets (like 10% or 12%) without accidentally spilling into higher marginal tiers.
• Account sequencing. Choosing the order in which you spend down your taxable, tax-deferred, and tax-free accounts to prevent artificial income spikes later in life.

Coordinating these three levers creates a personalized "repair strategy" that systematically plugs your tax leaks year by year using dollars you already have. This can help protect your retirement portfolio against unoptimized RMD payments, higher taxes on Social Security benefits, expensive Medicare surcharges, and wasted charitable deductions.

Four "leaks" to plug in your retirement dollars

Without proactive planning, four major tax traps act as the "cardboard soles" of retirement — quietly draining your portfolio year after year. Here is how to fix each leak using low-cost levers:

1. Required minimum distributions (RMDs). Starting between ages 73 and 75, mandatory pre-tax withdrawals from traditional IRAs and 401(k)s force taxable income into your bank account, pushing you into higher brackets whether you need the cash or not.

The "shoe repair": Use smart timing to execute targeted "micro-conversions" during your gap years. Moving smaller IRA amounts — maybe $1,000 annually — from a traditional IRA to a Roth systematically chips away at future forced RMDs (since Roths aren't subject to them). Roth distributions are also not taxable when withdrawn.

See also: 6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)

Plus, by only converting small amounts, you're less likely to push yourself into a higher marginal federal tax bracket. This type of bracket management may keep the federal tax on those annual Roth conversions as low as $100 to $220 per year (assuming a 10% to 22% marginal tax bracket rate).

2. The Social Security "tax torpedo." Unmanaged IRA withdrawals stack directly on top of your Social Security benefits. This triggers a compounding formula that can tax up to 85% of your Social Security income.

The "shoe repair": Blend tax-free Roth withdrawals or health savings account (HSA) funds to cover discretionary spending spikes (like home repairs or travel). Keeping ordinary income below the threshold limits helps protect your Social Security from taxation.

You can also draw down taxable brokerage accounts up to the 0% long-term capital gains tax threshold to fulfill your cash needs without raising your taxable baseline (or, as Kiplinger reported, utilize tax-loss harvesting to lower your tax bill).

3. Medicare IRMAA surcharges. One extra dollar of retirement income can cost you thousands. For instance, crossing an income-related monthly adjustment amount (IRMAA) threshold triggers automatic, high-cost monthly premium hikes on Medicare Parts B and D two years later.

The "shoe repair": Instead of draining pre-tax accounts first, sequence your annual withdrawals across three buckets: taxable, tax-deferred, and tax-free. Blending these sources keeps your modified adjusted gross income (MAGI) low, potentially helping your retirement income steer clear of IRMAA cliff edges. For more information on the three-bucket model, check out Kiplinger's report, The 40-Year Retirement Rule.

4. The RMD legacy and charitable waste. Donating cash directly from your checking account overlooks significant tax savings once you reach RMD age (and even a little before that).

The "shoe repair": If you are age 70½ or older, use a qualified charitable distribution (QCD) to transfer funds directly from an IRA to a qualifying charity (up to $111,000 per individual). This satisfies required distributions without adding a single dollar to your taxable income.

But if you want to donate outside an IRA, you can still get a tax advantage. Starting in 2026, the new charitable deduction for standard filers allows up to $1,000 in tax savings per individual on direct cash contributions.

Comparing your options side-by-side

To help evaluate your options, the breakdown below contrasts sticking with default standard tax-deferred accounts against a low-cost "boot repair" strategy.

The bottom line: Keeping your feet dry

Navigating taxes in retirement isn't about finding a magic bullet (or a magic shoe). As Sam Vimes realized, the real challenge is that short-term financial constraints often force choices that drain long-term wealth.

You don't need $5,000,000 sitting in a bank account to protect your portfolio from future tax hikes, Medicare surcharges, or mandatory distribution cliffs.

By making small, deliberate adjustments — filling low tax brackets, utilizing gap years, and sequencing your withdrawals — you can patch your financial boots year by year using the money you already have. But financial strategy is highly personalized, and no one size fits all.

So take a look at your current account mix today. Identify whether your savings sit primarily in pre-tax accounts, and map out your income gap between retirement and forced RMD age based on your specific financial circumstances.

A few simple patches could help to keep your tax bill more predictable, your income intact, and your financial feet dry for decades to come.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

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"I'm self-funded." I hear those two words from almost every successful retiree I meet, and I understand the instinct.

Nobody wants to spend their retirement thinking about nursing homes or memory loss.

But after 40 years of planning for retirees, I can tell you the real question was never whether you can pay for long-term care. It's what happens to your spouse and your children while you do.

What self-funding actually costs

Here's the math most people never run. Say a care need costs $10,000 a month, a realistic figure for assisted living or a home health aide today. That money typically comes out of a traditional IRA that hasn't been taxed yet.

To walk away with $10,000 after taxes, you might need to withdraw $16,000 to $18,000. Your income jumps, your tax bracket can shift, and your Medicare premiums rise with it.

Then there's timing. Care doesn't wait for a good market. If a health event hits during a downturn, you're selling investments at the worst possible moment, not because it's smart, but because the bills don't stop.

When adult children are managing the finances during a crisis, they don't always make calm decisions. I've sat across the table from families quietly watching an inheritance disappear, arguing about whether Mom "really needs" a higher level of care. That's not a position any parent wants to put their kids in.

What changed one couple's mind

Let's consider a scenario with a couple I'll call Richard and Diane, a composite of a pattern I see constantly.

He's 67 and retiring, she's 66, and for three years, a couple like them tell me the same thing every retiree tells me: "We're self-funded." Large IRA, strong financial plan, long-term care nowhere on the radar.

What changes minds like theirs isn't a spreadsheet. It's Diane watching her own father need care. He had the money to pay for professional help and refused to spend it, so the calls went to his children instead.

Diane stepped up, and she saw firsthand what that looks like: The physical demands, the disruption to her own family, the exhaustion.

Her conclusion, one I hear versions of constantly: "There is no way I'm putting my kids through that."

That's the moment long-term care planning stops being a financial exercise and becomes something personal.

What Medicare will and won't cover

One of the biggest misconceptions I run into is that "Medicare will handle this." It won't, at least not the way people expect. Medicare might pay for a stay in a skilled nursing facility following a hospitalization, but that coverage runs out fast.

Around day 20 or 21, once care shifts from skilled to custodial, Medicare typically steps back, and the bill lands on you.

For a progressive condition such as dementia that requires years of care, Medicare offers very little.

The plan this structure solves for

Say Richard and Diane have a large IRA sitting untaxed, and Richard is approaching the age at which required minimum distributions (RMDs) would start. A common structure here is a custodian-to-custodian transfer, for example $280,000, from that IRA into a new IRA held at an insurance company.

That money funds a long-term care life insurance hybrid policy over 10 years, with the carrier adding roughly $65,000 in interest, bringing the total to about $345,000, distributed in equal annual pieces.

The policy would give them a current monthly benefit of slightly more than $6,000 for home healthcare, assisted living or nursing home care, available immediately if needed. That benefit typically increases 3% a year for two decades, so by the time they're in their late 80s, it has roughly doubled.

The benefit is unlimited in duration and paid out completely tax-free. Each spouse's benefit is entirely separate, so one spouse's claim never reduces what's available to the other. If neither of them ever needs care, there's a death benefit for their heirs.

There's a second benefit most people miss: The annual transfer from the IRA counts toward Richard's required minimum distribution once he turns 73, so a decision he had to make anyway now does double duty.

In this short video, I break down how such a structure plays out over a decade, RMDs included, if you'd like to see the numbers visually.

None of this was available to them by accident. Long-term care insurance requires underwriting, and Richard and Diane could still qualify because they had this conversation while they were healthy. Wait until a diagnosis arrives, and you might not qualify at all.

Wait five years because you're not ready to think about it, and the policy will likely cost more, with no guarantee you'll still be insurable. Most people I meet after a health event no longer have that option.

I want to be straightforward: A policy such as this doesn't cover every dollar of every care scenario, and costs will keep rising. But having $10,000 or $12,000 a month arriving tax-free changes the equation. Your children aren't scrambling for cash, and your surviving spouse isn't draining their own resources.

There's no investment strategy that replicates that kind of advantage. You can't self-fund an unlimited benefit. The math doesn't work.

Three steps to take now

1. Run the real numbers on what self-funding a $10,000-a-month care need would cost you in taxes and IRMAA surcharges, not just the sticker price.

2. If you're in your 60s and in reasonably good health, get a hybrid long-term care quote now. Underwriting only gets harder from here.

3. Talk to your spouse and adult children about who would provide care if no plan existed and whether that's a role you want them in.

You don't put a long-term care plan in place for yourself. You put it in place for the people who love you enough to show up when things get hard, so that showing up never becomes their full-time job.

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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.

Is 2027 your year to retire, or should you prepare a little more and work another year? That may be the question running through your mind as we round out 2026. After all, it's been pretty tumultuous. Inflation is up 3.7%, gas is over $4 a gallon and the stock market has been volatile. At the same time, 401(k) balances are at record highs and there are more 401(k) millionaires than ever before.

If you have been doing your job and saving, you may be thinking you're ready. You've got the cash and the means, so why not go for it? It turns out there's a lot more to it than the balance in your retirement accounts.

"It's a conversation we're having a lot right now with consumer sentiment so low and what's happening out in the world," said Kelli Smith, a financial planner at Edelman Financial Engines. "Can you really afford to retire next year, and how do you feel about it?"

To help you decide, we've created a choose-your-own-path type guide. Read on to see which path may be best for you.

Retire in 2027? Work One More Year?

Retire in 2027 if you know exactly what your retirement expenses will be each month: If retirement is only months away, a general idea of your monthly spending isn't enough; you should know exactly how much you'll spend and have a strategy. "Is your plan thorough?" says Smith. "Can it support your lifestyle, healthcare and income taxes in retirement?"

Work one more year if you don't have a retirement budget: If you're going off a rough estimate or plan to wing it, work one more year and create a detailed budget. To be extra ready: Smith says to follow that budget the year you're still working. You'll see if that's the right amount. Plus, it gives you a chance to save more.

Retire in 2027 if you're comfortable with the amount you saved: Most Americans think they need over $1 million to live comfortably in retirement, but that varies based on your unique situation. Some need more and some less. Whatever your number, once you reach it, a major retirement hurdle is gone.

Work one more year if you are unsure about your number: If you are feeling a little bit unsure about your retirement balance, working one more year can help build up your confidence. It's an additional twelve months to max out your retirement accounts, pay down any high-interest debt and save more. "A penny saved is a penny earned," says Smith. "Use the year to feel more comfortable."

Retire in 2027 if you have a withdrawal strategy: Do you know how much you plan to withdraw regularly, and does it account for inflation and any market downturns, particularly early in retirement? If you can answer yes, then it's another aspect of retirement readiness you can check off. A tax-smart plan for when and how much you withdraw in retirement will ensure your money lasts and give you permission to spend.

Work one more year if you plan to figure it out as you go: If you don't have a plan for using your money in retirement, another year may benefit you. Withdrawing as you go can lead to running out of money prematurely. That's particularly true during market downturns. To help build a strategy, check out our rules series, including the 4% rule, the bucket approach, guardrails and the pay yourself first strategy.

Retire in 2027 if you know what you'll do with your free time: Retirement isn't only about your finances; it's about your emotional health. Happy retirees typically have a passion that gives them a purpose and a sense of community. It can be volunteer work, a part-time job or spending time with friends and family. Whatever it is, if you know what your retirement passion will be, or at least have a list to try, it's a good sign you're ready to retire.

"It comes down to defining a lifestyle, not a number," says Michele Havens, head of U.S. wealth management at BMO. "We ask clients to think about their value and purpose more than their savings."

Work one more year if you don't know what you'll do in retirement: You may know you don't want to work anymore, but if you haven't really thought about what you'll do once you retire, take the time to ponder it. Spend one more year working and map out what retirement will look like for you. Not only the big trips and hobbies, but the day-to-day activities. What does a regular Tuesday look like?

Take your time with the choice

Deciding between 2027 and working one more year doesn't have to be an all-or-nothing choice you make today. Use the coming months to hone your plan, build your confidence and map out what life actually looks like after work. When the financial and emotional pieces align, you'll know it's time.

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For 30 or 40 years, the job is simple: Save more, invest it, let it grow, repeat. Then you retire, and almost everything about how your money behaves changes at once. The habits that built the nest egg are not the habits that manage it well in retirement.

As a financial planner with nearly two decades of experience, I've sat with plenty of accomplished people who mastered the accumulation game but were caught off guard by the drawdown phase. The shift is real, and knowing what's coming makes it far easier to handle.

Here are six things that happen to your investments the moment you stop working.

1. Sequence of returns risk takes center stage

While you were saving, a market drop early in your career was almost a gift. You kept buying shares at lower prices, and time smoothed everything out. In retirement, the order of your returns suddenly matters enormously.

A steep decline in the first few years of retirement, while you're also withdrawing to live on, can do damage that a later decline of the same size would not. You're selling shares to fund expenses at exactly the wrong moment, and those shares aren't around to recover when the market eventually rebounds.

Two retirees with identical average returns over a 30-year retirement can end up in very different places depending purely on when the bad years arrived. The one who hit turbulence late may sail through comfortably. The one who hit it in years one and two may run short, even though the long-run average was identical.

This is the single biggest behavioral and structural shift. But most people have never heard of sequence of returns risk until it is upon them.

2. You move from 'growth at all costs' to income and stability

The whole point of accumulation is growth. The point of retirement is using the money. That usually means dialing back the most aggressive parts of the portfolio in favor of holdings that can produce income and ride out volatility with less drama.

This isn't about abandoning stocks altogether, since a multi-decade retirement still needs growth to keep pace with inflation. It's about changing the mix so that a bad year doesn't force you to sell your strongest holdings at a loss to pay the electric bill. The balance you held at 45 is rarely the balance that serves you at 65.

3. Cash suddenly has a job

During your working years, large cash balances felt like a drag — money sitting idle while it could have been invested. In retirement, a cash reserve becomes a tool rather than a missed opportunity.

Holding a year or two of expenses in cash and equivalents gives you somewhere to draw from when markets are down, so you aren't forced to sell investments at depressed prices. That buffer is what lets the rest of the portfolio stay invested through a rough patch.

The mindset flip is hard for lifelong savers, who spent decades being told that idle cash is wasted cash. In retirement, that idle cash is doing important work.

4. Required minimum distributions start making decisions for you

Eventually the IRS stops letting your tax-deferred accounts grow untouched. For 2026, required minimum distributions (RMDs) generally begin at age 73. From that point, you must withdraw a calculated amount each year whether you need the money or not, and it's taxed as ordinary income.

For someone with a large traditional IRA, those forced withdrawals can be substantial enough to push you into a higher tax bracket or trigger Medicare surcharges. The penalty for missing one is steep: 25% of the amount you failed to take, reduced to 10% if you correct it promptly.

RMDs turn your portfolio into something that generates taxable events on a schedule you don't control. This is also why the years before 73 carry so much planning value. Drawing down or converting some of those tax-deferred dollars earlier, while you have room in lower brackets, can soften the size of the RMDs waiting for you later. Wait passively and the distributions, and their tax bill, only grow.

5. Dollar-cost averaging runs in reverse

For decades, you put money in on a regular schedule, buying more shares when prices were low. That steady-drip discipline worked in your favor.

In retirement, the flow reverses. You're taking money out on a regular basis, which means you sell more shares when prices are low — the mirror image of the dollar-cost averaging strategy that served you so well.

This is why withdrawal sequencing and that cash buffer matter so much. Pulling a fixed dollar amount from a falling market chips away at the share count faster than most people expect. The same mechanical force that built your wealth can erode it if you don't plan around it.

6. You become a spender — and that's harder than it sounds

This last one is psychological, but it is no less real. People who spent their whole lives saving often find it genuinely difficult to flip the switch and spend. They under-spend out of anxiety, denying themselves things they planned and saved for, because watching the balance drop feels wrong after decades of watching it climb.

I've seen retirees with more than enough ration their own travel and comfort as if the money were not really theirs to use. Others swing the other way and spend too freely early on, before they have a clear read on how long the money needs to last.

Neither extreme serves you. Becoming a deliberate, comfortable spender, drawing down the money you worked to build without fear or recklessness, is one of the underrated challenges of retirement, and almost nobody warns you about it in advance.

Putting it together

Look at these six issues together and a theme emerges. Retirement isn't just "accumulation, continued." It's a different game with different rules, different risks and a different relationship to your own money. The instincts that built the nest egg — save aggressively, stay heavily invested, ignore short-term noise — don't all translate cleanly to spending it down over decades.

None of this means retirement is something to dread. It means the transition deserves its own plan, not just an extension of the one that got you here. The years right around your retirement date are when these shifts hit hardest, which is exactly why thinking them through in advance, ideally before you stop working, tends to make the whole transition smoother.

The accumulation phase rewarded discipline and patience. The drawdown phase rewards planning and flexibility. Knowing the difference — and adjusting before the shift catches you off guard — is most of the battle.

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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.

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

This time, we hear from a married 56-year-old plumber in Cincinnati who's still working. He reports a salary of $60,000 to $105,000.

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?

Slow and steady. Began contributing to my first company-sponsored 401(k) at age 26 and received a 50% match up to 6%, which is about all I could afford to contribute at the time (6%).

When I left that company, I transferred my balance, which wasn't much, to a self-directed traditional IRA and picked some funds.

Began a new job making more money and contributed to their 403(b). Each year when I got a raise, I increased my contribution amount.

Somewhere along the way, I also opened a Roth IRA and a brokerage account and contributed what I could, when I could.

And that is what I am currently doing, though now I focus on maxing out the Roth as soon as possible.

One point to add is that I never once pulled anything out, no matter how bad the market got, like in 2008. I stayed the course, and it has paid off, so far.

I also never sought out the latest stock or trend. I just picked quality mutual and index funds and let it ride.

What are you doing with the money?

I am still building my wealth over the next four years, when I plan to retire at 60.

The Fun Stuff

Did you do anything to celebrate?

Not yet. I will in four more years when the house is paid off, and I tell work to shove it!

What is the best part of making $1 million?

Feeling like I have a chance at a comfortable retirement.

Did your life change?

No. $1 million isn't what it used to be.

Does anyone know you're a millionaire?

No. It is nobody's business but mine.

Any plans to retire early?

Planning to retire at 60 — four more years.

Looking Back

Anything you would do differently?

Contribute more and maybe start earlier.

What advice would you give to your younger self?

Start early.

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

No, just watched a lot of investing videos on YouTube. But if I were to get a book, it would probably be The Total Money Makeover by Dave Ramsey.

Did you work with a financial adviser?

Never worked with a financial planner until recently. Giving it a "trial" run to see if the fees are worth it.

Looking Ahead

Plans for your next $1 million?

I'll figure it out when I get there.

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

Spend less than you make. Don't rack up debt.

You don't need a new phone or car every year or two. The borrower is a slave to the lender — save up to buy what you want/need with cash. The interest saved will help build wealth.

Don't fall for the latest trends, like bitcoin/crypto. Instead, pick some good mutual/index funds and contribute regularly.

Do you have an estate plan?

Not yet.

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

The best index or mutual funds to invest in.

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…

Things that go bump in the night aren't the only frights retirees should fear this Halloween season; their retirement accounts might just scare the bejesus out of them.

That's especially true in the current environment, where inflation is rising, gas prices are elevated, and a U.S. mid-term election is around the corner. Short-term portfolio dips might be scary, but the true nightmares lie in these five hidden traps.

5 Spooky Retirement Investment Moves to Avoid

1. The monster you invited in

You may have heard this AI stock is the next Nvidia, or this option play using an upside-down multi-way spread trade (whatever that is) will make you rich; if you don't understand it and still invest in it, Brant Wong, head of retirement solutions at Principal Asset Management, says that is one of the scariest things an investor can do.

"With any retirement account, for any investor, there are always different investments, different returns, and risks," says Wong. "It's important to understand how these things work." If you don't, you might make mistakes, leading to buying high and selling low, which is what true portfolio horror stories are made of.

2. Zombie investments

If you've switched jobs over the years, or aren't completely on top of your finances, you may have one or more of these: zombie investment accounts. These are old 401(k) accounts, stocks you forget about, or the same investment in multiple ETFs or mutual funds. All of those zombie investments cost you money in fees, redundancy and lost growth. They can be downright frightening, says Patrick Marcinko, a financial adviser at Bogart Wealth.

"Here's an easy fix. At least once a year, look at everything you own and why you own it. If you can't explain why, it's worth looking at it," he said. "It's very important to have an inventory."

To get started, you could search for lost 401(k) accounts.

3. Panic and run

In horror movies, you want everyone to run for the exit or get away from the axe murderer. But doing that when markets are going south, especially when you have a plan, can lead to a bloodletting, warns Wong. Just look at what happened after the Great Recession in 2008 and 2009. Everyone who didn't sell recouped their losses and then some. History has proven that over and over.

"You may want to escape and get away, but with investments it's not that simple," said Wong. "There's risk mitigation, which is why it's important to understand the investment and to make moves to optimally derisk the portfolio." If you have a plan in place and the markets are dropping, don't react, warns Wong. Stick to the plan and ride out the fright show to live another day.

4. Putting all your screams in one basket

Maybe you had stock options at your job, owned a stock that did well over the years, or, for whatever reason, one investment has taken on a life of its own and now represents a big chunk of your investment portfolio. If that rings true, you are committing what Jaime Quiros, CFP and Portfolio Manager at FBB Capital Partners, says is a grave mistake.

"Too much concentration can hurt you in a downturn or if something happens," he says. "Think about Enron, think about Lehman Brothers." Quiros was referring to two companies that collapsed, taking their share value along with them. "You don't want too much of one stock, especially in retirement," said Quiros.

5. Flying blind

One of the most haunting things any retiree can do that will doggedly follow them in retirement is to lack a financial plan. Without one, you may react when things go bad, which could create shortfalls later in life. "The scariest thing in retirement isn't a market drop," said Marcinko. "It's one you didn't plan for."

Avoiding the financial horror movie

Investing in retirement doesn't have to be scary and spooky this Halloween season. By making sure you have a plan, your investments aren't overconcentrated in one area and that you stay the course once you are on track, you can put all those ghouls, goblins and demons to bed once and for all.

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Where do you turn for investment advice? Your parents? A financial adviser? Or that charismatic guy on TikTok who claims he's making a fortune trading stocks?

Long before TikTok, Reddit and YouTube became popular sources of investment advice, my wife and I spent many Friday nights watching Wall Street Week with Louis Rukeyser on PBS. It was entertaining, educational and a great introduction to the sometimes confusing world of investing.

Years later, I was fortunate to work at Fidelity Investments, where I spent 17 years interviewing financial experts and writing about investing, retirement and personal finance. I was surrounded by colleagues who understood how money works, the importance of managing risk and the value of investing for the long term.

I'm thankful for that experience. But I wonder where younger investors are getting their financial education today.

Increasingly, the answer is social media. And while there are plenty of knowledgeable financial professionals sharing useful information online, there are also people whose investment advice can do more harm than good.

Welcome to the world of finfluencers — social media personalities who offer financial tips, investment recommendations and sometimes promises of quick riches.

When popularity is mistaken for expertise

A recent study suggests investors have good reason to be cautious.

Estonian legal services firm Legalaes analyzed 1,764 finance-related videos across YouTube, TikTok, Instagram and Facebook, representing more than 692 million views. It classified 29% as misleading under its criteria, which included questionable investment claims, guarantees and certain promotional practices*.

Even more concerning, those videos averaged roughly 556,000 views, compared with 326,000 for videos without those warning signals.

The Legalaes study also found that only 2.2% of the 1,266 creators sampled had demonstrable relevant financial qualifications. Fewer than 12% of the videos included disclaimers or had them on the creator's profile.

Trading tips and technical analysis had the highest incidence of misleading signals, at 40.6%. YouTube had both the highest percentage of misleading videos and the highest percentage of content classified as accurate.

Closer to home, a FINRA Investor Education Foundation study (pdf) found that 61% of investors ages 18 to 34 had made an investment decision based on a recommendation from a social media personality. That compares with 31% of investors ages 35 to 54, and just 6% of those 55 and older.

Social media is clearly influencing how Americans invest. The question is whether investors know enough to distinguish useful financial education from advice that could cost them money.

Here are seven ways to protect yourself.

1. Don't confuse a good story with good investment advice

Remember the old Wall Street saying, "When the ducks quack, feed them"?

Scott Hanson, co-founder of Allworth Financial and longtime host of the Money Matters radio show and podcast, says investors should beware of people promoting the latest hot investment, including triple-leveraged exchange-traded funds.

"The most dangerous advice is not always obviously false," Hanson says. "It often begins with an accurate fact, removes the investor's personal context and turns it into a universal recommendation."

An investment might make sense for someone with decades until retirement, considerable savings and a high tolerance for risk. It might be entirely inappropriate for someone saving for a first home or preparing to retire.

Hanson also recalls a neighbor who once sold investment products, dropped his financial licenses and continued selling anyway. "It took the financial regulators a couple of years, but he eventually got caught, and it's likely that a few clients got burned in the process," Hanson says.

The lesson? Before following someone's financial advice, find out who's giving it and whether they're qualified.

2. Check credentials — and make sure they fit the advice

Financial certifications can be confusing. But a few respected designations are worth knowing.

A Chartered Financial Analyst (CFA) typically has specialized investment analysis and portfolio management training. A Certified Financial Planner (CFP®) focuses on comprehensive financial planning, while a Certified Public Accountant (CPA) specializes in accounting and taxation.

Credentials alone don't guarantee good advice. But they provide a useful starting point.

You can verify an investment professional's registration and disciplinary history through Investor.gov, the Securities and Exchange Commission's investor education website, or FINRA BrokerCheck. The CFP Board and CFA Institute also maintain credential-verification resources.

Keep in mind that someone providing general financial education online may not be required to register as an investment adviser. But if that person offers individualized investment recommendations or wants to manage your money, understanding their regulatory status becomes especially important.

And remember: A large following, polished videos and impressive testimonials are no substitutes for professional qualifications.

3. Follow the money: What's the finfluencer selling?

There's nothing inherently wrong with financial educators earning a living from newsletters, advertising, sponsorships or online courses. Plenty of credible experts do.

But consumers deserve to know how those experts are compensated.

Ernie Wingard, an adviser at Capital Choice Financial Group in North Richland Hills, Texas, says investors should be suspicious when a financial personality talks almost exclusively about one product.

"If they are only talking about indexed universal life or whole life insurance and not providing alternatives, that may suggest they're only licensed to sell in one area," Wingard says. "They may be pushing those products because they're the only ones they are licensed to offer."

The same applies to trading strategies.

Wingard says someone who focuses exclusively on day-to-day trading decisions, without discussing taxes, retirement planning or investment alternatives, may primarily be promoting a trading newsletter or educational course.

That doesn't automatically make the information worthless. But it should prompt another question: Is this person trying to educate me, or turn me into a paying customer?

Vignesh Coumarane, founder of Richmond, Virginia-based InvestEd, recommends a simple test: Look at the incentives.

"What's their motivation?" he asks. "You should see what the source gets if you follow their advice. Someone earning money from a newsletter or article may have different interests than yours."

4. Don't let FOMO become your investment strategy

One of the biggest threats to investors, young and old, is FOMO, or fear of missing out.

You've probably seen the pitches: Don't miss the next big thing. Get in now. This investment could change your life.

The excitement is contagious, especially when social media feeds are filled with screenshots of extraordinary returns.

"People want to latch onto shiny investments. It makes them feel good. They are told that now is the time to get in," says Michael Schramm, author of the forthcoming book Emotional Finance.

Schramm, a CFA, points to speculative investments, including cryptocurrencies, that can attract intense attention on platforms such as Reddit but may not make sense for every investor.

His advice is refreshingly simple: Take a deep breath. Ask yourself whether the recommendation feels legitimate. If it feels like a scam, it may well be one.

I'd add another suggestion: Give yourself 24 hours before acting on an investment idea discovered on social media.

A legitimate long-term investment strategy generally won't disappear because you took a day to investigate it.

5. Beware of guaranteed returns and secret strategies

There are few guarantees in investing. And if someone promises unusually high returns with little or no risk, that's a warning sign.

Investment disclosures routinely remind investors that "past performance does not guarantee future results." It's a message worth remembering when you encounter someone boasting about spectacular trading profits.

Be especially cautious about strategies involving borrowed money, highly leveraged investments or putting a substantial portion of your savings into a single stock or cryptocurrency.

Bridge Jackson, founder of Seattle-based fintech startup OUIvest, believes one of the biggest problems with financial advice on social media is that visibility can easily be mistaken for credibility.

A large following, sophisticated graphics or screenshots showing profitable trades tell investors little about whether the creator is qualified or whether the investment is suitable for them.

Jackson encourages investors to ask three questions: Who is giving the advice? How do they benefit if I follow it? And can I independently verify what they're telling me?

Those are good questions to ask before putting your hard-earned money at risk.

6. Do the math before you invest

One of the best ways to evaluate financial advice is to ask the person giving it to explain the numbers.

Coumarane says his first test is whether a creator shares the reasoning, assumptions and calculations behind a recommendation.

If someone suggests buying a particular investment, paying down debt or changing your savings strategy, you should be able to understand how the recommendation applies to your financial situation.

"If you cannot see the math, it is a sign that it may not be genuine," he says.

For example, someone might recommend paying off a low-interest mortgage rather than investing. But what's the mortgage rate? What's the expected investment return? What are the tax implications? How much emergency savings do you have?

Without that context, the advice is incomplete.

You don't have to be a financial analyst to ask reasonable questions. And if the person offering the advice can't explain the assumptions in plain English, consider that another warning sign.

7. Use social media to learn, but verify before acting

Despite these warnings, social media can be an excellent resource for younger investors who are just beginning to understand money.

Jackson believes financial education needs to meet younger people where they are.

"Newbie investors, age 20 to 30, don't want to go to Fidelity or Schwab. So they go online," Jackson says. "But they need basic financial literacy education, so we're making it more fun with gamification and AI."

That's an encouraging development. We need more accessible, engaging financial education, especially for people who may not have parents, teachers or experienced advisers to turn to.

But education and individualized investment advice are two different things. A video explaining how compound interest works can be valuable. So can an introduction to index funds, retirement accounts or the risks of borrowing money to invest.

A stranger telling you to put half your savings into a particular stock is another matter.

Before investing, compare claims with independent information from the SEC, FINRA, established financial institutions and primary company disclosures. If you're working with a financial adviser, ask how the idea fits into your overall plan.

The bottom line: Be curious, but be careful

I'm glad younger generations have so many ways to learn about investing. It's certainly more convenient than waiting until Friday night to watch Wall Street Week.

But access to financial information doesn't automatically translate into financial knowledge.

The best financial educators help you understand risk, evaluate alternatives and make thoughtful decisions. They're transparent about their qualifications, compensation and the limitations of their advice.

The ones to avoid rely on urgency, exaggerated promises, get-rich-quick schemes and a steady drumbeat of recommendations that always seem to lead to another product or subscription.

So keep learning. Follow knowledgeable financial professionals. Ask questions and build a network of trusted sources.

Just remember that having a million followers doesn't make someone a financial expert. And before you invest a dollar based on something you saw online, do your homework.

When it comes to your money, buyer beware.

*Legalaes methodology: The study relied on rule-based text analysis rather than individual manual fact-checking. Its misleading classification therefore should not be equated with proof that every flagged video contained false information. The Legalaes study classified 29% of sampled videos as misleading under its own criteria, which included certain promotional practices — not necessarily factually incorrect advice.

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We may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened. We may not cover every available offer. Our relationship with advertisers may impact how an offer is presented on our site but our editorial selection of products is made independently. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more. We calculate a typical annual reward for each card, assuming $36,000 spent annually and less any annual fee. Interest rates, fees, rewards and other terms listed in this article are subject to change. Before you apply for a credit card, check its current terms and conditions with the issuer.

American Express and Airbnb are teaming up to give travelers more ways to earn rewards and save on vacation rentals at the same time. The new partnership, announced October 22, 2026, brings more than 1 million Airbnb listings worldwide to American Express Travel, along with expanded Membership Rewards opportunities and new benefits for eligible cardholders.

For travelers who already use Airbnb for family vacations, extended business trips or weekend getaways, this partnership could make American Express cards more rewarding. Eligible cardholders can earn up to 5X Membership Rewards points on qualifying prepaid Airbnb stays booked through Amex Travel.

Cardholders with the American Express Platinum Card® or The Business Platinum Card® from American Express can also access up to $850 in combined annual statement credits, including an expanded $600 Lodging Credit and a new $250 Airbnb Experiences Credit. Terms Apply.

However, there's a catch. The biggest statement credits are tied to Airbnb Luxe properties, and travelers must meet specific booking requirements to qualify. That means the new benefits may be more valuable to luxury travelers than those looking for affordable accommodations.

Here's how the partnership works and what to consider before booking your next Airbnb stay.

How to use the $600 American Express Lodging Credit for Airbnb stays

One of the biggest changes from the new partnership is the expansion of the $600 Hotel Credit, now called the $600 Lodging Credit. Previously, the benefit covered eligible prepaid hotel reservations through Fine Hotels + Resorts® and The Hotel Collection.

Now, cardholders with the American Express Platinum Card® or The Business Platinum Card® from American Express can also use the credit toward qualifying Airbnb Luxe stays.

Airbnb Luxe is Airbnb's collection of high-end vacation rentals, including luxury estates, spacious villas and other premium accommodations. Standard Airbnb listings don't qualify for the credit.

To use the Lodging Credit on Airbnb, eligible cardholders must book a prepaid Airbnb Luxe stay of at least two nights through Amex Travel using their eligible card.

The $600 annual benefit is divided into two periods:

• January through June: Up to $300 in statement credits.

• July through December: Up to $300 in statement credits.

Unused credits don't carry over between periods, so cardholders can't apply the entire $600 toward one reservation in a single half of the year.

For example, if you book a qualifying two-night Airbnb Luxe stay for $1,300 in November, you could receive up to $300 in statement credits, assuming you haven't already used your credit for the second half of the year. The booking must be processed during the applicable benefit period, but you don't have to complete your stay before that period ends.

There's another important change coming for eligible cardholders who prefer hotels. Starting January 1, 2027, Fine Hotels + Resorts® reservations must be at least two nights to qualify for the Lodging Credit. Previously, eligible one-night stays could qualify. The Hotel Collection already requires a minimum two-night stay.

This change could make the benefit less flexible for travelers who frequently book single-night hotel stays or short business trips.

What's the catch with the new $250 Airbnb Experiences Credit?

American Express is introducing a new benefit that allows eligible cardholders to receive up to $250 annually in statement credits for Airbnb Experiences. These activities include guided tours, cooking classes, cultural excursions and other experiences hosted by local experts.

However, the credit isn't automatically available to everyone with the American Express Platinum Card® or The Business Platinum Card® from American Express. Cardholders must first book a qualifying prepaid Airbnb Luxe stay through Amex Travel to unlock the benefit.

Once the qualifying reservation is confirmed, eligible cardholders can receive up to $250 in statement credits for qualifying Airbnb Experiences purchased directly through Airbnb using their eligible card.

There's also a time limit. The Experiences Credit is available only for the remainder of the calendar year in which the qualifying Luxe reservation is confirmed.

For example, if you confirm a qualifying Airbnb Luxe reservation in November 2026, you could unlock up to $250 toward eligible Airbnb Experiences. However, you would need to make qualifying purchases before the end of 2026. The credit doesn't remain available for another 12 months.

Not every Airbnb Experience qualifies. Experiences that redirect customers to certain third-party booking platforms are excluded, so check the payment process before making a reservation.

How many Membership Rewards points can you earn on Airbnb stays?

The new partnership allows eligible American Express cardholders to earn between 2X and 5X Membership Rewards points on qualifying prepaid Airbnb bookings through Amex Travel. The rewards rate depends on which card you use. Terms Apply.

Here's how many points you could earn on a qualifying $2,000 Airbnb stay:

Cardholders with the American Express Platinum Card® or The Business Platinum Card® from American Express can earn 10,000 Membership Rewards points on an eligible $2,000 booking. At an illustrative redemption value of one cent per point, that's approximately $100 in rewards value.

Meanwhile, eligible American Express® Green Card holders could earn 6,000 points, while other qualifying Membership Rewards cards could earn 4,000 points on the same reservation. The Green Card's 3X rate is an existing travel rewards benefit that also applies to eligible Airbnb bookings made directly through Airbnb.

Keep in mind that Membership Rewards points don't have a fixed dollar value. Their value depends on how you redeem them, whether for travel, gift cards or other eligible options.

Should you book Airbnb through Amex Travel or directly through Airbnb?

The new partnership gives American Express cardholders another way to earn rewards on vacation rentals. However, that doesn't necessarily mean booking through Amex Travel will always provide the best value.

Before reserving a property, compare the total cost and booking conditions through both platforms. Look at the final price, including cleaning fees, service fees, taxes and other charges. Prices may differ between booking options, so it's worth comparing the total cost before making a reservation.

Availability may also differ because the Amex Travel partnership includes a selection of Airbnb's global inventory rather than every property on the platform. Cancellation policies are another important consideration, especially for business travelers whose plans may change unexpectedly. Review the property's cancellation terms and any applicable deadlines before paying.

One convenience of the partnership is that Airbnb continues handling reservations, host communications and customer support. Although travelers discover participating properties through Amex Travel, they complete their reservations through Airbnb and manage their stays there.

It's also important to distinguish between earning and redeeming Membership Rewards points. Cardholders can earn bonus points on qualifying Airbnb reservations through Amex Travel, but they can't currently use Membership Rewards points to pay directly for these stays at checkout. Eligible cardholders may have the option to redeem points for a statement credit after the transaction posts, although redemption values can vary.

Is the Amex and Airbnb partnership worth it for travelers?

The American Express and Airbnb partnership could benefit frequent travelers, particularly those who already have the American Express Platinum Card® or The Business Platinum Card® from American Express and regularly book upscale accommodations.

For cardholders who prefer luxury vacation rentals, the ability to use the $600 Lodging Credit on qualifying Airbnb Luxe properties adds flexibility. The new $250 Airbnb Experiences Credit could provide additional value if they already plan to book activities or tours during their trips.

However, the benefits may be less appealing to travelers who typically book inexpensive vacation rentals or shorter stays. Standard Airbnb properties don't qualify for the Lodging Credit, and cardholders can't unlock the Experiences Credit without first making a qualifying Luxe reservation.

If you're considering opening an American Express Platinum Card® primarily for the Airbnb benefits, calculate how much you'd actually save based on your normal travel habits. Don't assume you'll receive the full $850 in value every year.

Most importantly, avoid spending more on a luxury rental simply to qualify for a statement credit. If you already enjoy premium Airbnb stays, the partnership offers more ways to earn rewards and potentially reduce travel costs.

For everyone else, the biggest advantage may be the opportunity to earn additional Membership Rewards points on accommodations they were already planning to book.

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• Which American Express Credit Card is Right for You?
• Short-Term Rentals: 10 Things to Know About Sites Like Airbnb
• The Best and Worst Airlines for Holiday Flight Delays and Cancellations
• 3 Airline Credit Cards With Companion Fares That Could Save You Money

I moved to the Lowcountry in South Carolina in 2006. I told my wife I'd give it five years, and then I wanted to go back to Indiana, where I'm from. Twenty years later, I'm still here.

I'm a financial adviser, CFP® and Certified Financial Fiduciary®. My firm, Coastline Complete Wealth, is in Bluffton, which is the mainland side of Hilton Head Island and about 45 minutes from Savannah.

Almost everyone I meet who moves to this area seems to have vacationed on Hilton Head first. The island may be what draws them in, but then they discover that moving a little farther inland can buy them a newer home, more space and considerably more for their money.

For someone coming from an expensive market in the Northeast, seeing what their money can buy in South Carolina can feel like they're playing Monopoly.

And they're coming. According to the latest U.S. Census Bureau estimates, South Carolina is the fastest-growing state, and Jasper County, right here in the Lowcountry, is the nation's fastest-growing county.

What I'm seeing isn't unique to this area. Whether you're considering South Carolina, Florida, Georgia or somewhere else, vacationing there and retiring there are two very different things (I even wrote a book on this topic, Lowcountry Retirement). And buying a less expensive house doesn't necessarily mean retirement will be less expensive.

If you're going to move here, understand what it costs to fully commit

The Lowcountry can be an expensive place to live, but it can become a really expensive place to own a second home.

South Carolina property taxes are one thing to pay close attention to. A qualifying primary residence is generally assessed at 4% of fair market value versus 6% for a second home, and primary residences are also exempt from school operating taxes.

I recently met with someone who had bought a home here as a second property, having looked at the previous owner's property tax bill of roughly $6,000 on Zillow. He couldn't believe it when his first tax bill was more than $36,000.

South Carolina is a very property-tax-friendly state, but you have to do it right. A second home doesn't get the same favorable treatment as your primary residence.

Insurance is another consideration. We've had several hurricanes affect the region over the years, and insurance companies have been pulling back from coastal areas. Most homeowners insurance also doesn't cover flooding, so make sure you price both homeowners and flood coverage before you buy.

I have a handful of clients paying around $2,500 a month between homeowners' association fees and club dues. That's $30,000 a year before we've talked about property taxes, insurance, utilities, landscaping or maintaining the house.

In some parts of the country, $2,500 a month might be an entire mortgage payment. Here, it can just be the cost of belonging to the community.

Rent before you buy — and see what living here is actually like

I met with a couple earlier this year who had a flat overlooking the Hudson River. They were considering the Lowcountry and had just started looking at houses. A couple of days later, he called to tell me they'd bought a house in Sun City on their first trip here.

If you're seriously considering retiring here, get an Airbnb for the month of August. See what you think about the heat and humidity, and sit in the traffic on a Saturday when it's check-in day on Hilton Head Island.

Then come back and get an Airbnb in December, when we just throw on a fleece and say 55 is cold. You need to experience the place as someone who lives here, not someone who's here for a week.

You also need to think about what happens when you move somewhere everybody else likes to vacation.

For about two months every year at our house, it seems like we're shuffling one group of visitors out just in time to bring the next one in. They don't want to cook spaghetti every night. They want to go out to dinner, go to Hilton Head, play golf and do the things people do on vacation. They're on vacation even though you're not, and you're probably going along for the ride.

That's one of the great things about living here, but it also becomes part of your retirement lifestyle and spending. If your children, grandchildren and friends are going to visit regularly, plan for that too.

What does your retirement actually cost?

The biggest financial concern I see usually isn't that people haven't accumulated enough money. Quite the opposite. Many of the people I meet have substantial assets, and it's not unusual for someone sitting across from me to have $2 million or more saved for retirement. What surprises me is how many have no idea what their lifestyle actually costs.

I'll sit across from a couple who may have been earning $300,000 a year before retirement, and when I ask what they expect to spend, they'll say something like, "Well, if we can't live on $100,000 a year, something's wrong."

That's not a retirement budget. That's an arbitrary number. It may have been 20 years since that couple actually lived on $100,000 a year, so why would we assume they're suddenly going back to that lifestyle in retirement?

Start with reality. Look at what you actually spent over the past 12 months, subtract the expenses that will disappear in retirement and add the things likely to increase: Travel, golf, eating out, visitors and the carrying costs of the new house.

Once you know what your retirement is likely to cost, the next question is where the money is going to come from. A retirement plan should determine how you'll use Social Security, investments and retirement accounts to fund that lifestyle while considering the taxes you'll pay along the way.

The goal isn't to figure out the lowest number you can possibly live on. It's to build a plan that lets you afford the retirement you actually want.

I love this place, and you couldn't drag me out, so don't let me talk you out of coming. Just do it the right way. Understand what the lifestyle will actually cost and build a retirement plan around it.

You may find out, like I did, that five years turns into 20 pretty quickly.

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• The Rise of the 'Half-Back' Retiree: Why a Perfect Florida Condo Isn't Enough

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 it comes to estate planning, avoiding probate is one of the main motivators.

Whether it's designating beneficiaries or putting assets in a living trust, there are several ways assets can be directly transferred to heirs without going through probate.

But simply shielding assets from probate doesn't automatically mean assets will be distributed the way you intended. Sometimes, the same strategies used to avoid probate can unintentionally override other parts of an estate plan, potentially leaving loved ones without the protection you put in place.

Consider a father who has two adult children with different financial needs. One receives government benefits that have income and asset eligibility requirements. The other struggles with substance abuse and isn't able to responsibly manage a large inheritance.

To accommodate both children, the father creates a revocable living trust with separate trusts made for each. This allows the father to leave an inheritance to both while also keeping protections they need in place.

Later, the father opens a bank account and purchases an annuity, naming both children as beneficiaries.

Once he dies, the bank account and annuity proceeds go directly to the children instead of the trusts that were created. While naming the children as beneficiaries of that account allowed the father to keep his assets out of probate, it also bypassed the protections he deliberately built into his estate plan.

While avoiding probate is an important part of the plan, it shouldn't be the only consideration in this process. A beneficiary's situation can matter just as much as how the assets get transferred.

For example, a beneficiary might receive government benefits that have income or asset restrictions, struggle with substance abuse or managing money, or could be dealing with a personal matter such as a divorce.

Leaving an inheritance to someone in one of these situations could jeopardize future benefits, leave money vulnerable or bring new financial responsibilities they might not be prepared for or capable of handling.

Instead of having assets transferred to them outright, you might choose to open a trust so you can manage the inheritance and determine when and how distributions are made.

However, those protections only work if the assets are directed to the trust. Naming the individual as the beneficiary rather than the trust itself could make the trust irrelevant altogether.

While trusts can be helpful in protecting and managing assets, they're only one tool in the estate planning process. Reviewing how assets are titled and who's designated to receive them after you die is important.

Look at bank and investment accounts, retirement accounts, real estate, life insurance policies and annuities. A beneficiary designation or other transfer arrangement on a particular asset could determine where it goes once you die, even if that overrides protections you've established elsewhere in your plan.

Avoiding probate is just one of many considerations when it comes to building an estate plan. What's most important is making sure your assets are transferred to the people you intended in a way that accounts for their needs and circumstances.

For some, naming beneficiaries directly is enough. Others might find additional protections are necessary. Regularly reviewing your estate plan, making adjustments as needed, will ensure the strategies you use to avoid probate don't work against your estate plan.

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• I'm a Financial Adviser: This Is Why Unmarried Same-Sex Couples Need an Estate Plan
• Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms

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.

Too much information about stock market seasonality can lead to overload and bad decisions for investors. Just enough can be fun, even valuable if properly deployed.

Indeed, traders and speculators who specialize in technical analysis take advantage of inefficiencies created by retail investors going too deep on those kinds of things.

And even among the experts, you'll find an amusing variance in how they define things such as the "Santa Claus Rally."

At the same time, as some of the greatest asset allocators who ever lived will tell you, the stock market is a reflection of us, our emotions and our psychology.

Warren Buffett said it's a "popularity contest" in the short term, a "weighing machine" in the long term. He also described it as "a church with a casino attached."

Those are colorful words from one of the best who ever did it. Basically, though, it is a barometer of human behavior, including our emotions and psychology, as well as what we choose to consume and when.

Think about it for a second: It's October, so you're probably pulling out your sweaters and corduroy, maybe prepping to do some leaf work in the yard, perhaps watching football, possibly hitting a pumpkin patch.

As much as we want to understand ourselves and how we behave as investors, we can also profit from seeing how our decisions plus those made by others like us aggregate over time.

So seasonality offers another reference point along that journey, a map based on history and data to use as you approach prevailing terrain.

But it's just a guide.

And this quiz is for edutainment purposes only.

More on investing from the Kiplinger team:

• Now Is the Best Time to Make These 6 Financial Moves (You'll Thank Yourself in December)
• What the Midterms Mean for Your Stock Portfolio
• Stop Waiting for the Perfect Moment to Invest: There Isn't One
• How to Pick the Right ETF for Your Financial Goals
• The Best All-in-One ETFs to Keep Your Investment Portfolio Simple
• The 5 Best Long-Term Investment Stocks to Buy for Steady Returns
• Best Stocks to Buy for Rising Interest Rates This Fall
• 5 Stocks to Avoid as Interest Rates Rise This Fall
• 5 Best Momentum Stocks to Buy for More Upside in 2027

When the calendar flips to 2027, a series of Social Security updates will impact your wallet. These changes cover everything from taxes and monthly benefits to how the agency handles fraud.

These changes don't only impact retirees — they also affect current workers and their families. Workers need to keep an eye on accumulating enough Social Security credits to qualify for survivors benefits, correct errors in their earnings record and understand how much of their wages will be subject to the 6.2% Social Security tax.

Let's look at what's different in 2027.

1. Social Security cost of living adjustment (COLA) for 2027 is 3.6%

The 2027 COLA is 3.6%, up from last year's 2.8%. This matches the estimate provided by David Payne, staff economist for the Kiplinger Letter.

Older people are caught in a "COLA catch-22." A higher COLA means more money for retirees, but it results directly from higher inflation. Conversely, a lower COLA means less inflationary pressure, but it provides less money to help retirees with rising costs such as medical expenses and housing.

"There’s a lot on the line financially right now for older Americans: one in five have no retirement savings, and more people feel financially insecure this year than last. That makes Social Security’s cost-of-living adjustment (COLA) critically important. It helps millions of Americans keep up with rising costs for groceries, routine bills, health care and other everyday expenses," said Dr. Myechia Minter-Jordan, CEO of AARP.

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

Remember, the SSA automatically deducts the Part B premium from the Social Security benefits of most Medicare recipients. So any monthly increase will be reduced by higher Part B premiums.

2. November digital notification deadline to learn 2027 increase

In an October blog post, the SSA noted that beneficiaries wishing to view their official 2027 COLA notice online through their personal my Social Security account must establish their online account by November 18, 2026. Otherwise, the SSA will mail the notice in December.

Account holders can also choose to receive text or email alerts when a new message, including their COLA notice, is available in their personal my Social Security account Message Center.

3. Maximum Social Security benefits

For workers retiring at age 70 in 2027, the maximum possible monthly benefit increases to $5,358, up from $5,181 in 2026. To qualify, you'd need to have earned at or above the earnings cap ($192,300 for 2027) for 35 years — an achievement that requires consistently high income throughout your career.

Claiming without any delayed retirement credits reduces this amount; those retiring at full retirement age (FRA) in 2027 will see a maximum monthly payout of $4,188, an increase of $36 over last year's maximum of $4,152.

 4. Social Security tax limit

Social Security caps the amount of income you pay taxes on — and get credited for — when benefits are calculated. The Social Security tax limit in 2027 is $192,300, up $7,800 from $184,500 in 2026. The tax limit is indexed to inflation and is likely to rise in 2028.

The increase in the wage base will translate into paying a maximum total tax of $11,922.60 for 2027. Social Security will stop withholding taxes once you reach the maximum income amount for the year. However, there is no cap on Medicare taxes, meaning your total wages are subject to the 1.45% tax.

There's also an additional 0.9% Medicare tax for individuals earning more than $200,000 per year, $250,000 for married couples filing jointly, or $125,000 for married people filing separately. These numbers don't increase annually; they're statutory and not subject to indexing for inflation. Employers are responsible for withholding this amount from your paycheck, although they're not required to match it.

5. Earnings test: You can earn more from work in 2027 while collecting benefits

Continuing to work while collecting Social Security may reduce your monthly benefit check due to a rule called the Social Security earnings test. Fortunately, those limits typically rise every year, leaving more of your monthly Social Security intact.

The SSA temporarily withholds $1 of a worker's benefits for every $2 earned above $25,560 (or $2,130 a month) in 2027, up from $24,480 (or $2,040 a month) in 2026.

The year when you reach FRA, the test is more generous — you only forfeit $1 in benefits for every $3 in 2027 earnings above $67,920, an increase of $2,760 over the 2026 limit of $65,160. Once you reach your FRA, there is no limit on earnings for the remainder of the year, and any withheld benefits are restored.

For beneficiaries younger than full retirement age (FRA) throughout 2027: The annual earnings limit is $25,560; $1 in benefits will be withheld for every $2 earned above this limit.

For beneficiaries reaching FRA in 2027: The annual earnings limit is $67,920; $1 in benefits will be withheld for every $3 earned above this limit until the month the beneficiary reaches FRA.

 6. Earning Social Security credits in 2027

Workers need to earn slightly more in 2027 to secure quarterly work credits (quarters of coverage) toward the 40-credit minimum required to qualify for retirement benefits.

In 2027, earning 1 credit requires $1,970 in covered wages, up $80 from $1,890 in 2026. To earn the maximum 4 credits for the year, a worker must earn $7,880 in 2027, a $320 increase from $7,560 in 2026.

Why it's important. You must earn a minimum number of Social Security credits to qualify for retirement benefits. The SSA can't pay you benefits if you don’t have enough credits.

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

Once you earn the 40 credits, earning more credits won’t increase your benefit payment. Instead, your retirement benefit is based on your highest 35 years of inflation-adjusted earnings.

7. A single point of contact for identity theft victims

Victims of Social Security number theft and misuse have new relief under the Improving Social Security's Service to Victims of Identity Theft Act (H.R. 5345). Signed into law on October 7, 2026, the law requires the SSA to provide affected individuals with a dedicated, single point of contact to manage and coordinate their case through resolution.

While it does not issue automatic benefit checks or new Social Security numbers, it eliminates the need to deal with a different representative during follow-ups. The single-point-of-contact requirement takes full effect for cases beginning April 5, 2027.

8. Supplemental Security income (SSI) payment limits

The 3.6% COLA applies to Supplemental Security Income (SSI) federal benefit rates, which officially take effect for the 2027 tax year. Because January 1 is a federal holiday, eligible individuals and couples will see these updated payment amounts starting on December 31, 2026.

For an eligible individual, the maximum monthly benefit rises to $1,029 in 2027, up from $994 in 2026. For an eligible couple, the maximum monthly rate increases to $1,544 in 2027, compared to $1,491 in 2026. Additionally, the allowance for an essential person rises from $497 to $516 per month.

9. Disability income thresholds

The SSA has updated the monthly earnings thresholds for Social Security Disability Insurance (SSDI) recipients. These benchmark increases allow beneficiaries to earn higher wages before impacting their monthly disability benefits or triggering evaluation periods.

For non-blind disabled workers, the substantial gainful activity (SGA) threshold is $1,770 per month in 2027, up from $1,690 per month in 2026. For statutorily blind workers, the limit increases to $2,950 per month in 2027, up from $2,830 per month in 2026. Meanwhile, the earnings threshold required to count toward a trial work period (TWP) month increases to $1,270 per month in 2027, rising from $1,210 per month in 2026.

Other important changes effective in 2027

For more information about other 2027 changes, read:

8 Changes Coming to Medicare in 2027

Medicare 2027 Projections: Here's How Much Your Monthly Premiums Are Estimated to Rise

Projected 2027 IRMAA Brackets and Surcharges for Medicare Parts B and D

Related Content

• 2027 Social Security COLA is 3.6%: What You Need to Know
• Social Security Payment Schedule for 2027
• The Average Monthly Social Security Check
• The Average Social Security Check by Age
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The above picture was taken from my seat in Seattle at (sadly) the U.S. soccer team's last 2026 U.S. World Cup game.

I had tossed around the idea of going since the U.S. qualified for the round of 32, but I came up with too many excuses to take it seriously. It wasn't until the day before the game when my wife said, "Memories over money — just do it." More on that later.

The best emails I get from clients at Exit 59 Advisory, where I am president, feature phrases such as:

"I just got back from…"

"I just booked…"

"I just committed to…"

The best, best emails are the ones that include the part above and then the same quote from my wife: "Memories over money."

Now I know this seems counterintuitive coming from a financial planner, but let me explain.

Think of money as the base of Maslow's hierarchy of needs. I am not diminishing its importance. I am not diminishing the need for financial security to be happy in retirement.

Basically, every academic study agrees that we need financial security, along with health and social connection, to experience true happiness in retirement.

What is diminishing, to use that word once more, is the return you get beyond the security point. Beyond security, money can:

• Buy you freedom
• Buy you time
• Buy you memories

To be clear, all of our clients have financial plans. All of those plans have a line item for expenses like those. If you want to build your own, you can access our planning software.

When my wife and I were first married and had no kids, we caught the travel bug. When we had kids, we thought we would press pause, at least on the bigger trips. We didn't.

Many people told me that the kids wouldn't remember the trips. And we felt OK about that. We were still enjoying the trips. Our kids are now 8, 4 and 1:

• Our oldest, Vivian, recently brought up the name of a bunny on a farm we visited in Austria
• Our middle child, Lucy, talks about seeing the Statue of Liberty in "Yew Nork"

If my young children remember these trips fondly, even when everything didn't go exactly as planned, I would bet they'd be even more impactful for your adult children and grandchildren.

Carl Richards, a fellow financial planner who is part of my speaking agency and is a former New York Times personal finance columnist, has a Venn diagram sketch with "experiences" in one circle and "people you love" in the other, with an arrow pointing to the overlap and the label "spend money here."

So this is not just about travel. It is about spending money to create memories or creating memories that don't require spending.

My extended family has been gathering for Sunday dinners almost every weekend since 2011. Experiences, whether they involve a trip, a meal or a walk, provide more bang for your buck than material purchases.

You get the benefit of anticipation, the actual experience and the memory — bang for your buck from experiences in three phases.

So the Sunday night before the U.S. squared off against Belgium in Seattle, I booked a flight, one night at a hotel and a ticket to the game. As you probably know, the game did not go our way, but I have no regrets about going.

There are two more important lessons here.

First, even bad experiences or experiences with bad parts can become good memories. Three years later, we are able to laugh about my daughter getting sick on a transatlantic red-eye.

The last lesson is the concept of "contrast." One reason I got so much joy out of such a ridiculous itinerary is because of how much it contrasts with my day-to-day life. If this were something that was normal or not special, I would have been one of the five people in the front row scrolling their phones during the game.

As you know, I spend my days looking for every avenue to help you accumulate a healthy balance sheet, to save you money on taxes and otherwise optimize your financial situation.

I've also been doing this long enough to say that those who convert their financial balance sheet to a memory balance sheet tend to be happier.

Memories over money!

Related Content

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• The Secret to Life, Liberty and the Pursuit of Happiness? It Isn't Money. A Financial Planner's Take on the American Dream
• Can Money Buy You Happiness? Yes, It Can. However…
• The 5 Pillars of a Happy and Fulfilling Retirement
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Some of the greatest investors in history have famously favored a substantial home-country bias for U.S. investors, meaning a portfolio overwhelmingly weighted toward American stocks.

Perhaps the most famous example is Warren Buffett. Beyond his long-running optimism ("never bet against America"), the Berkshire Hathaway chairman emeritus has left remarkably simple instructions for how money left for his wife should be invested after his death: 90% in a low-cost S&P 500 index fund and the remaining 10% in short-term Treasury bonds.

Vanguard founder John Bogle expressed a similar preference. Despite Vanguard becoming one of the world's largest providers of international mutual funds and exchange-traded funds (ETFs), Bogle argued that foreign stocks weren't necessary for a well-diversified U.S. investor. He generally favored a heavy U.S. allocation and suggested that investors who wanted global diversification limit it to no more than 20% of their equity portfolio.

Today, however, international exposure remains a standard component of many professionally constructed portfolios. Owning stocks outside the U.S. can reduce dependence on a single country's economy, market valuations, sector composition and currency while providing exposure to companies and industries that aren't well represented domestically.

If you're a do-it-yourself investor, that leaves a practical question: How much international exposure, if any, should an ETF portfolio actually have?

Below, we'll examine the case for and against investing abroad, look at how some of the largest global equity ETFs divide their portfolios between U.S. and international stocks and highlight low-cost ETFs that can help you build an international allocation.

Why allocate to international stocks?

Despite the U.S. stock market's stellar performance over the past decade and its outsized influence on global markets, it's still just one basket.

Diversification can mean spreading investments across large-, mid- and small-cap stocks, value and growth styles, and all 11 stock market sectors.

It can also mean investing across different countries. One of the most instructive ways to visualize is with an asset return map spanning 2017 through 2026 from the BlackRock Investment Institute.

Sometimes called an "asset-class quilt," this type of chart ranks the annual returns of different asset classes, geographies and market segments:

Even during a period when U.S. equities performed exceptionally well overall, they didn't lead every year.

Chinese equities outperformed U.S. stocks in 2017, 2019 and 2020, while European equities took the lead in 2025. Emerging-market equities also delivered superior returns during several periods.

There is no readily discernible pattern an investor could have reliably used beforehand to move between these markets at exactly the right time.

Indeed, that's one of the arguments for owning the broader basket and allowing market dynamics to determine which regions contribute most to returns over time.

History also offers a more painful example of why geographic diversification can matter. The U.S. stock market experienced what is commonly called the "lost decade," generally referring to the period encompassing the aftermath of the dot-com bubble and the 2007-09 global financial crisis.

From January 1999 through December 2009, U.S. stocks produced an annualized total return of just 1.7%, according to Portfolio Visualizer. Adjusted for inflation, the annualized return was actually negative at -0.8%.

International developed markets did better at 4.1% annually, or 1.6% after inflation. Emerging markets were the standout, returning 13.7% annually and 10.9% after inflation:

With hindsight, it's easy to say that a young investor should simply have kept dollar-cost averaging into U.S. stocks at depressed valuations. Living through the experience is different.

Few investors have unlimited tolerance for watching a portfolio effectively go nowhere for a decade and actually lose purchasing power after inflation.

And there's no rule saying a future period of underperformance must last only 10 years. Japan provides a particularly sobering example.

The Nikkei 225 peaked at 38,915 at the end of 1989 following an enormous asset bubble. Japanese equities subsequently collapsed, and the country's economic difficulties became known first as the "lost decade" and eventually the "lost decades."

The Nikkei didn't surpass its 1989 record until February 2024, more than 34 years later.

That history provides a useful thought experiment for U.S. investors. How much of today's preference for U.S. stocks reflects their genuinely attractive characteristics, and how much reflects recency bias after an unusually strong period of relative performance?

If you'd been a Japanese investor near the end of 1989, after years of exceptional domestic returns and with Japan representing an enormous share of global equity markets, how comfortable would you have been putting virtually your entire stock allocation into Japan for the next three decades?

There are legitimate advantages to a U.S. home-country bias. Holding domestic stocks avoids the direct currency fluctuations that come with owning foreign assets denominated in euros, yen, pounds and other currencies.

U.S. stocks can also be simpler from a tax perspective. Foreign investments may involve withholding taxes on dividends and other complications, while qualified dividends from eligible U.S. companies can receive preferential federal tax treatment.

Those are worth considering, but they are generally secondary portfolio-construction considerations rather than the starting point. Asset allocation determines how much you hold in stocks vs bonds and, within equities, how broadly you diversify across countries and regions.

Those decisions should primarily reflect your objectives, risk tolerance and time horizon. Tax treatment, currency exposure and the particular ETFs used to implement the allocation come afterward.

What the leading global equity ETFs do

If you believe adding international stocks makes sense, the next question is the one that tends to cause analysis paralysis: How much should you allocate outside the U.S.?

There are two practical approaches. The first is to let market capitalization determine the allocation automatically. The second is to choose your own target allocation and periodically rebalance the portfolio back toward it.

Market cap is simply a company's share price multiplied by its number of shares outstanding. A market-cap-weighted global index extends that concept across countries.

As the collective market value of one country's companies increases relative to the rest of the world, that country receives a larger weight. If it decreases, its weight falls.

There are several advantages to this approach. Turnover tends to be low because you're not constantly trying to decide which country deserves a larger allocation.

If China, India or another market eventually becomes a much larger share of the global stock market, its allocation can increase naturally. If U.S. stocks continue outperforming and maintaining their dominant share of global market cap, you continue to benefit from that, too.

You're not systematically selling winners simply because they've exceeded an arbitrary geographic target. It's about as hands-off as international diversification gets.

For many investors, that's also the difficult part. It requires resisting the temptation to tinker with allocations based on whichever country has recently performed best or worst.

There isn't, however, one universally authoritative definition of the "global stock market." Different index providers define their investable universes differently, and the resulting U.S.-vs-international allocation can vary considerably.

Consider the iShares MSCI World ETF (URTH). It tracks the MSCI World Index, and an investor using URTH as a reference point might therefore arrive at a 70% U.S./30% international equity allocation.

But the MSCI World Index has an important limitation: Despite its name, it covers only developed markets. Emerging markets such as China, India, Taiwan and Brazil are excluded.

Contrast that with the Vanguard Total World Stock ETF (VT), which tracks the FTSE Global All Cap Index. Here, U.S. stocks account for roughly 60% of the portfolio.

One major reason is that VT includes emerging markets, which collectively account for approximately 10% of the fund.

The alternative is to choose an international allocation yourself. You might decide on 10%, 20%, 30%, 40% or even 50% of equities outside the U.S.

The exact percentage is arguably less important than selecting an allocation that you understand and can realistically stick with through periods when either U.S. or international stocks are lagging.

You can backtest different combinations indefinitely and fit the data to find the U.S.-international split that would have produced the best historical result. But that optimization is inherently backward-looking.

The winning allocation over the previous decade tells you what worked during that particular decade, not what will work during the next one.

If you set your own target, the more important decision is establishing a systematic rebalancing policy.

One approach is calendar-based, such as reviewing the portfolio quarterly or annually and restoring the target weights. Another is threshold-based, where you rebalance only after the U.S. or international allocation moves a predetermined amount away from its target.

Rebalancing doesn't necessarily require selling, either. Investors who are still accumulating can direct new contributions toward whichever allocation has fallen below its target.

That can be particularly useful in taxable accounts, where selling appreciated ETFs may realize short- or long-term capital gains and create an immediate tax bill.

Ultimately, a lot of the debate over international stock allocation amounts to splitting hairs. If you've already decided that geographic diversification belongs in your portfolio, much of the important work is done.

Choose an allocation you can maintain, establish rules for rebalancing it and avoid repeatedly changing the plan based on whichever market happens to be leading at the time.

Currency hedging adds another wrinkle

Another thing investors should understand before dismissing the historical performance of international stocks is that returns haven't always been driven solely by the underlying companies. Currency movements can either help or hurt a U.S. investor's return, sometimes substantially.

Consider the iShares Core MSCI EAFE ETF (IEFA). It invests across developed markets outside the U.S. and Canada, meaning its underlying stocks trade in currencies such as the euro, Japanese yen, British pound and Swiss franc. But IEFA itself trades in U.S. dollars, which creates an additional source of return and risk.

If the U.S. dollar strengthens against those foreign currencies, the value of the foreign investments translates into fewer dollars, creating a headwind for a U.S. investor. If the dollar weakens, the opposite occurs: Those foreign assets translate into more dollars, providing a tailwind even if the underlying stocks themselves haven't performed any better.

ETF issuers are well aware of this, which is why many offer currency-hedged versions of their international funds. IEFA's counterpart is the iShares Currency Hedged MSCI EAFE ETF (HEFA).

HEFA provides similar developed-market equity exposure. But this fund seeks to hedge its foreign currency exposure back to the U.S. dollar, reducing the effect of exchange-rate movements on returns.

Over the 12.6-year period through September 24, this distinction made a substantial difference. According to Testfolio, HEFA produced a 10.7% annualized return, compared with 7% for IEFA. Cumulatively, that worked out to approximately 260.7% vs 135.1%.

Assuming distributions were reinvested and ignoring taxes and trading costs, a $10,000 investment would have grown to approximately $36,069.62 in HEFA vs $23,509.48 in IEFA.

Does that mean HEFA is inherently the better international ETF? No. It means currency hedging was beneficial over this particular period, during which the U.S. dollar strengthened substantially against several developed-market currencies. The hedge insulated HEFA from much of that currency headwind.

If the U.S. dollar instead weakens against those currencies, the relationship can reverse. An unhedged international ETF such as IEFA can benefit from the currency translation, while a hedged ETF such as HEFA largely gives up that tailwind.

All else being equal, the same mechanism that helped HEFA during a strong-dollar environment can work against it during a sustained period of dollar weakness.

If you have a shorter time horizon or a particular desire to isolate the performance of foreign stocks, you may prefer to hedge some or all of your currency exposure. Over a multi-decade horizon, however, predicting currency movements becomes extremely difficult, and exchange rates can move through lengthy cycles in either direction.

If you don't have a strong view, there's nothing wrong with splitting the difference. A 50/50 allocation between hedged and unhedged international exposure, periodically rebalanced, reduces the need to make an all-or-nothing bet on the future direction of the U.S. dollar.

As with the international allocation itself, having an investment policy you can follow may be more useful than continually trying to predict which currency regime comes next.

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Most people know the basics of building financial security include saving consistently, investing for growth, managing debt and preparing for retirement.

The challenge facing many Americans is that financial strategies tend to focus on numbers while overlooking something equally important: Family communication.

Lincoln Financial's latest Consumer Sentiment Tracker found that 78% of families surveyed haven't had an in-depth conversation about life insurance, for example. It also found that 60% of adult children believe their parents have life insurance coverage in place, while only 44% of parents say they do.

The disconnect extends beyond life insurance. Similar gaps exist around retirement income, healthcare costs and wealth transfer.

What I find interesting isn't just the data. It's what it reveals about how families approach a financial strategy.

Many people assume critical decisions have already been discussed. They assume their spouse understands the decisions that have been made. They assume their children know where important documents are. They assume their parents have taken care of everything.

Sometimes those assumptions are right, but often they're not.

That's why I believe financial protection starts with conversation.

Why communication is becoming more challenging

Today's families are juggling more financial responsibilities than ever.

Many adults are trying to save for retirement while helping children through college. Some are supporting aging parents while managing mortgages, careers and their own long-term goals. Others are navigating questions about healthcare, caregiving and legacy at the same time.

As financial realities become more complex, communication becomes more important. Yet this is often the first thing to get postponed.

Nobody wakes up on a Saturday morning excited to talk about life insurance, healthcare costs or estate decisions. These conversations can feel uncomfortable. They can feel premature. Sometimes they can even feel unnecessary.

After all, if everything seems fine today, why bring it up?

The problem is that many financial decisions don't become important when they're made. They become important years later.

The families that seem most confident in their financial decisions aren't necessarily the ones with the largest portfolios or the most sophisticated strategies. In many cases, they're the families that have created clarity around who is responsible for what, what protections are in place and what they want their future to look like.

Life insurance awareness starts with creating clarity through conversation. That may sound simple, but many families still haven't taken that first step.

Life insurance is part of a bigger financial picture

One of the reasons life insurance gets overlooked is because people often think about it separately from the rest of their financial strategy.

Retirement preparation goes in one bucket, investments go in another, and insurance sits somewhere else.

But in reality, every financial decision is connected.

The amount of risk someone is willing to take in an investment portfolio may depend on the protections they have elsewhere. Meanwhile, healthcare needs, estate planning considerations and family obligations can all affect the type of financial protection that makes sense for a specific situation.

That's why I've long believed life insurance should be considered alongside saving, investing and preparing for retirement as part of a comprehensive financial strategy.

It's important to ask whether someone's overall strategy reflects the life they're building today and the responsibilities they want to prepare for tomorrow.

A family with young children may have different priorities than someone approaching retirement. A business owner may need different protection than a salaried employee. Someone caring for aging parents may face entirely different financial considerations.

The goal isn't to arrive at a universal answer.

The goal is alignment between financial decisions and financial realities.

Moving from assumptions to informed decisions

The good news is that closing the conversation gap doesn't require a complicated financial approach.

Most families don't need to start with spreadsheets, policy reviews or legal documents.

They need to start with goals.

Ask questions like:

• What are we trying to protect?
• Who depends on us financially?
• What would happen if one source of income disappeared?
• Are there responsibilities we haven't accounted for?
• Does everyone understand the decisions and protections in place today?

Those questions tend to open the door to more meaningful discussions about financial protection, retirement goals and long-term priorities.

From there, families can begin identifying areas that need more attention and move from assumptions to informed decisions.

Five ways to close the conversation gap

1. Treat life insurance as part of your financial strategy

Review life insurance the same way you'd review retirement accounts, investments or estate documents. Financial protection deserves a seat at the table alongside every other major financial decision.

2. Identify who's impacted

Financial decisions rarely impact just one person. Consider spouses, children, aging parents, business partners or anyone who depends on your financial wellbeing.

Talking across generations helps create a shared understanding of responsibilities, priorities and expectations before important decisions need to be made.

3. Start with goals, not policies

People connect more easily to conversations about family, security and future priorities than they do to policy features or coverage amounts.

Focus first on the people and goals you're trying to protect. The technical details can follow.

4. Check assumptions against reality

Ask yourself what you're assuming to be true. Then verify it.

• Do family members know where important documents are located?
• Have beneficiary designations been reviewed recently?
• Would the people who matter most know what steps to take if something happened tomorrow?

Assumptions are often where financial gaps begin.

5. Bring a financial professional into the conversation

A financial professional can help evaluate protection needs, identify blind spots and ensure life insurance is viewed within the context of a broader financial strategy.

Their role isn't just to recommend solutions. It's to help create clarity and guide informed decision-making.

A better way to think about life insurance

Lincoln's research suggests that for many families, there are important financial conversations left to have. The issue isn't a lack of interest in protecting loved ones. Most people care deeply about that.

The issue is that many families have never confirmed whether everyone's understanding of the family's financial decisions and protections matches reality.

Closing the conversation gap won't solve every financial challenge, but it can help families create clarity before it becomes urgent.

And it can help ensure life insurance plays the role it was intended to play from the beginning: Helping protect the life families are building today.

The conversation doesn't have to be perfect. It just has to start.

Lincoln Financial is the marketing name for Lincoln National Corporation and its affiliates, including issuing insurance company The Lincoln National Life Insurance Company, Fort Wayne, IN, and wholesaling broker-dealer, Lincoln Financial Distributors, Inc., Radnor, PA. LCN-9117890-090926

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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.

After the first increase to the federal funds rate in three years following the September Fed meeting, you're probably looking closely at your holdings, as well as across the market, for stocks to avoid as interest rates rise.

With inflation issues still persistent and a clear desire from the central bank to stabilize prices, the future likely includes higher rates. Naturally, that will disrupt both stock and bond markets.

If you're focused on long-term growth, obviously you shouldn't abandon the market altogether because of short-term volatility prompted by uncertainty about interest rates.

However, rising interest rates can cause big problems for certain businesses that depend on borrowing, need frequent refinancing or generate too little cash to cover their financial obligations.

As rates rise, these activities become more costly and eat into profitability. Although higher rates aren't guaranteed, the 10-year Treasury yield has already hit its highest level in more than two decades.

That means investors have ample data to show that borrowing costs and Treasury yields are already having an impact, particularly on firms with weak share-price performance and uncertain paths to stronger profits.

The following companies face a combination of financial and business headwinds that could make them particularly vulnerable in the months ahead as interest rates rise.

Here are five stocks to avoid as interest rates rise.

Data is as of October 21.

Boeing

• Market value: $151.9 billion
• Sector: Industrials

Boeing (BA) has a long road ahead as it works to restore profitability and investor confidence following years of production problems, safety concerns and costly delays. That task will be even harder as rates rise.

The aerospace manufacturer faces elevated borrowing costs, along with its substantial debt burden limiting financial flexibility while it attempts to improve manufacturing efficiency.

In September, the firm's CEO acknowledged that stabilizing production of the 737 MAX was taking longer than expected and delays in increasing production of its 787 Dreamliner also persist.

With some $26 billion in debt and operations currently in the red this fiscal year, strong demand for new aircraft alone can't cause this industrial stock to take off.

Higher financing costs would make an increasingly delayed turnaround even more expensive, and shares have declined by double digits in 2026 in part because of these challenges.

The fact that its customers may also face borrowing headwinds for big-ticket Boeing planes makes the situation even less attractive.

Carnival

• Market value: $36.9 billion
• Sector: Consumer discretionary

Carnival (CCL) faces a challenging combination of substantial debt, rising operating expenses and sensitivity to consumer spending.

This last point is particularly noteworthy, as Carnival typically is not catering to the highest tier of consumers. And many of its customers could see purchasing power eroded significantly by higher interest rates.

That one-two punch could make the cruise operator particularly vulnerable if interest rates remain elevated, as it faces operational headwinds even as its itineraries become less budget-friendly for travelers.

The company has roughly $25 billion in debt, and some $2.5 billion scheduled to mature in 2027 and another $4 billion is maturing in 2028, according to SEC filings. At the same time, operating expenses are on the rise in 2026 thanks to elevated fuel prices.

Small wonder shares of the consumer discretionary stock are down about 25% from their February highs before the U.S. bombed Iran. Although demand for cruises hasn’t crumbled yet, a combination of higher rates and higher costs make Carnival a risky bet.

Crown Castle

• Market value: $33.5 billion
• Sector: Real estate

Crown Castle (CCI) is a real estate investment trust (REIT) that specializes in telecommunications infrastructure. Among specialty REITs, it's certainly a stable business. But it's also not exactly growing at breakneck speed given market saturation.

What's more, maintaining and growing a network of cell phone towers for lease to wireless service providers takes significant capital, and CCI's debt load and recent business transition make it vulnerable if interest rates continue to rise.

The company has been restructuring its operations and selling its fiber businesses to focus more heavily on wireless towers. Proceeds from the asset sale seem a good thing, as they're intended to help reduce the firm’s massive debt load of about $30 billion.

But the move also leaves Crown Castle more dependent on tower leasing from wireless carriers that face their own spending crunch amid rising telecom borrowing costs.

In fact, the company has forecast a decline in 2026 site rental revenue that reflects these challenges. And with a leadership transition at the company that includes the third CFO since 2025, the company's ongoing changes bring these financing challenges into greater focus.

Lucid Group

• Market value: $1.3 billion
• Sector: Consumer discretionary

Lucid Group (LCID) has long been a high-risk investment as the luxury electric vehicle maker has looked to build out its global footprint and become a leader in the emerging EV category.

However, Lucid has struggled to match its production with demand. Lack of profitability, rising rates and a risk of consumer borrowing headwinds create even bigger problems going forward.

The company's latest delivery figures of 3,806 vehicles for the third quarter show just how small LCID stock is compared with other automakers.

Even if you look past the intense competition in the market to gain share, high manufacturing costs and the challenge of reaching true scale are daunting.

The company has cut jobs as part of its cost-reduction efforts and a hope to reduce cash burn, but there's little room for execution problems or slower build-out if this stock is going to live up to the growth promises of the past year or two.

And while higher financing costs are a practical concern, equally troubling is a gut-wrenching drop of about 80% in the last 12 months as investors have given up on this one-time momentum darling.

A combination of financial woes and Wall Street pessimism creates an awfully tough hill to climb for this EV company.

Vornado Realty Trust

• Market value: $6.1 billion
• Sector: Real estate

Another real estate leader, Vornado Realty Trust (VNO) is exposed to two challenges that can be particularly damaging when interest rates are high: a tough office property market and the cost of financing a massive commercial real estate portfolio.

The New York-focused landlord has been working to improve occupancy in the last year or so, but big-ticket office properties continue to face pressure from changing staffing patterns in the age of remote work.

Shares remain about half of where they were right before the pandemic of 2020, and the fact that rates are now at multi-decade highs put even more pressure on this struggling real estate leader.

Its debt obligations provide a more immediate reason for caution.

Recently, mortgages have been sent to "special servicing" as a sign of potential default. Although Vornado secured forbearance agreements to soften the blow for several months, interest and payments continue to accrue.

That delay could allow for asset sales to fund refinancing, but the current high interest rate environment makes the timing of those deals very painful.

Investors should closely watch VNO as a prime example of the kind of stocks to avoid as interest rates rise.

With limited balance sheet flexibility and a steady increase in borrowing costs, it's no wonder shares of this REIT are down about 14% in the last 12 months.

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The federal government's TreasuryDirect.gov website is the only place online where you can buy and redeem U.S. savings bonds. You can also use TreasuryDirect to purchase securities such as Treasury bills, notes and bonds, as well as Treasury inflation-protected securities (TIPS).

Recently, TreasuryDirect introduced changes to how its users access their online accounts. Last year, it discontinued a tool for tracking down unredeemed bonds. And those who request certain services may face a months-long wait for the Treasury to complete the task.

Here's what you should know.

A new way to log in.

As of late October, TreasuryDirect is requiring customers to log in to their accounts with ID.me, a digital identity-verification service. You may already have an ID.me account to log in to other government or business websites; taxpayers use it to access records with the IRS, for example. Those who have an ID.me account may need to take some additional identity-verification steps before using it to access TreasuryDirect.

If you need to create an ID.me account, you'll provide information including your Social Security number and a photo of government-issued identification, such as your driver's license or passport. You may also have to submit a photo of yourself taken with your smartphone's camera.

Tracking down unclaimed bonds.

Last year, TreasuryDirect discontinued its online Treasury Hunt tool, which customers could use to search for missing or unredeemed savings bonds. The service ended because a provision in the SECURE 2.0 Act called for the Treasury to share information on some unredeemed, matured bonds with the states, which can include them in their unclaimed-property databases. But the program is still in the works, and you can't yet count on using these databases to find bonds.

If any of your bonds have been lost, stolen or destroyed, you can fill out and mail FS Form 1048 to request a claim. Provide any details about the bonds that you have on hand, including the purchaser's Social Security number as well as bond serial numbers and issue dates.

Significant delays.

Prepare for a long wait if you submit a form by mail. Requests for lost, stolen or missing savings bonds take 11 months or more to process, according to the TreasuryDirect website. Converting paper savings bonds to an electronic format may take nine months or longer, and cashing in paper bonds could take at least three to five months. A high volume of requests is causing the delays, according to the Treasury.

If you're planning to cash in paper bonds, send the request (using FS Form 1522) several months before you need the money, suggests David Enna, founder of Tipswatch.com. If the total redemption value of the bonds is more than $1,000, you'll have to sign the form in the presence of a notary or another certifying officer. Send the request via certified mail to the address listed on the form, with a return receipt requested, Enna advises.

Alternatively, you may be able to cash in paper savings bonds at a local bank or credit union. But many limit the service to customers who have an account with the institution.

If you're counting on savings bonds to cover a major expense, timing matters. A financial adviser can help you evaluate your options, plan for potential delays and determine how your savings bonds fit into your broader financial strategy.

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

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

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Who likes paying taxes? Let me see a show of hands.

OK. No one.

Still, taxes are part of investing, and sometimes the determination to avoid them can lead to a worse financial decision than simply writing the check.

I know because I've done it.

Like many investors, I've held on to winners too long, in part because I feared paying a large capital gains tax bill. In 2021, I watched a roughly $1,500 investment in Adobe (ADBE) balloon to nearly $90,000. It was also a high-income year for me, so I decided not to take the profits.

Looking back, that feels like a mistake. Adobe shares subsequently fell dramatically from their 2021 highs. I was worried about the tax consequences of selling and, at the same time, suffered from a healthy dose of FOMO: What if I sold and the stock kept going up?

It didn't.

That experience has made me much less resistant to selling big winners in retirement.

Why is it so hard to let go of a successful investment? Maybe we become attached to the company. Maybe we like believing we're great stock pickers. Or perhaps the capital gains tax feels like an immediate, certain loss while the possibility of a future stock decline seems distant and theoretical.

For some investors, that can lead to tax paralysis: refusing to sell an appreciated investment primarily because of the tax bill, even after the position has grown far larger than makes sense for the portfolio.

When taxes become a behavioral problem

Behavioral finance helps explain why.

One phenomenon is sometimes called the tax-lock effect. An investor continues holding an asset that no longer fits his or her risk tolerance, investment thesis or desired asset allocation because selling would trigger a capital gains tax.

Then loss aversion enters the picture.

The concept, associated with psychologists Daniel Kahneman and Amos Tversky's prospect theory, holds that people tend to feel the pain of losses more strongly than the pleasure of comparable gains.

For a wealthy investor sitting on a large, appreciated position, writing a six-figure check to the IRS can feel like losing money rather than enjoying the result of a successful investment.

The potential future loss from owning too much of one stock can be harder to picture.

Jason Lilly, a financial adviser with Tenere Wealth Advisors in Hyannis, Massachusetts, sees several behavioral biases come together when clients resist trimming successful holdings.

Last year, he worked with a client who had about $1 million invested in Apple (AAPL). The client loved Apple products — "we are Mac people" — creating an emotional attachment to the company. Recency bias reinforced the reluctance to sell: The stock had been performing well, so why assume that would change?

Lilly approached the problem gradually. "As an adviser, my No. 1 fiduciary role is to help clients protect the downside. So that's how I frame the conversation. This client has 10,000 shares of Apple. We sold 100 shares at $290. Then the stock bumped up to $310 and an element of seller's remorse kicked in."

Lilly reminded the client that those 100 shares represented only about 1% of the Apple position.

"I continue to underscore the importance of having a highly diversified portfolio and a comprehensive financial plan. When I can get clients to truly see the big picture and look 10 years down the road, then they get more comfortable paying capital gains taxes," Lilly says.

For clients like these, Lilly and his team can also establish a capital gains budget for the next one to three years. Rather than treating every taxable sale as an unpleasant surprise, the investor decides in advance how much in gains he or she is comfortable realizing. So taxes become part of the plan.

When you may need a CPA

Tax planning for wealthy retirees can quickly get complicated.

Financial advisers increasingly use tax-planning software to model strategies, but an adviser generally is not a CPA or licensed tax professional. For higher-net-worth families, coordination among the financial adviser, CPA and estate-planning attorney can become increasingly valuable.

Some investors may benefit from engaging a CPA specifically for long-range tax planning. John Barut, CPA and owner of Providence Consulting CPA, PLLC in Charlotte, North Carolina, offers retirement tax planning for clients who want to estimate what their tax burden could look like five, 10 or even 25 years into retirement.

The exercise can incorporate stress testing the impact of Roth conversions, charitable giving, Social Security claiming decisions, required minimum distributions (RMDs) and tax-bracket management on the portfolio over time. Instead of evaluating each decision separately, the idea is to see how the pieces interact over decades.

Barut recently worked with a retired married couple in their 50s who had approximately $7 million in traditional IRA assets. Doing nothing with those accounts for the next 10 to 15 years could mean substantial required minimum distributions later in retirement. He developed a multiyear Roth-conversion strategy. This year, the couple plans to convert $250,000 from traditional IRA assets to a Roth IRA — and willingly pay the associated income tax now.

"This couple may live another 40 or 50 years and have to pay taxes every year on portfolio gains. But with an aggressive Roth conversion strategy, we can demonstrate how this couple can reduce their total tax burden by approximately $12 million over their lifetime. That's a significant savings," Barut says.

The exact result of any Roth strategy depends heavily on future tax rates, investment returns, longevity and other assumptions. But the larger lesson applies to many retirees: Sometimes paying taxes today can improve the long-term plan.

The hidden risk may be the stock, not the tax

Jamie Botsko, a senior family office wealth adviser at Greenleaf Trust in Grand Rapids, Michigan, works with wealthy families that have highly concentrated stock positions.

"HNW clients often misconstrue capital gains taxes as the primary risk when selling appreciated assets, when the actual risk is market decline and potential wipeout of their holdings because of a concentrated position," Botsko says.

Consider an investor with several million dollars tied up in the stock of one company. Perhaps the shares came from decades of executive compensation, an early investment in the business or ownership of a company that later went public.

The investor may have an extremely low cost basis. Selling creates a large taxable gain. Doing nothing, however, leaves a substantial portion of the investor's retirement wealth dependent on the fortunes of one company.

For clients with significant concentrated positions, Botsko may consider strategies such as charitable remainder trusts, exchange funds, variable prepaid forwards and long-short strategies, depending on the investor's circumstances.

"The key issue is not the tax hit itself, but rather the market risk that could derail clients' retirement plans. Proper planning should focus on diversification rather than tax avoidance," Botsko says.

A charitable remainder trust, for example, can allow someone with highly appreciated assets and charitable intentions to contribute those assets to an irrevocable trust. The trust may sell the assets and reinvest the proceeds without immediately triggering capital gains tax at the trust level. The donor or another beneficiary receives payments according to the trust terms, with taxes generally recognized as distributions are received. The remaining assets eventually pass to the designated charity.

An exchange fund takes a different approach. Investors contribute concentrated shares to a pooled fund containing stocks provided by other investors. In return, they gain exposure to a more diversified portfolio without immediately selling the original shares and realizing the gain. These vehicles can carry substantial restrictions, costs and complexity, so they aren't appropriate for everyone.

Other strategies, according to Botsko, including prepaid variable forwards and certain long-short approaches, can be even more complicated and typically require specialized tax, legal and investment advice.

"The goal isn't necessarily to eliminate taxes. It's to keep taxes from dictating the entire investment strategy," says Botsko.

Give yourself permission to enjoy your wealth

There is another side to tax paralysis that often emerges in retirement: Some investors become so reluctant to realize gains that they hesitate to spend money they can comfortably afford to spend.

Jason Dall'Acqua of Crest Wealth Advisors in Annapolis, Maryland, sees this with clients who have spent their working lives saving and investing.

The fear of not having enough can be healthy. It encourages saving, investing and planning. But habits built over 30 or 40 years don't disappear when someone retires.

Dall'Acqua recalls one client who takes an expensive family vacation each year but still wants reassurance that the expense is affordable, despite having sufficient assets. "An emerging part of my role is to help clients enjoy their wealth through meaningful experiences while addressing their concerns about spending," Dall'Acqua says.

Sometimes that means selling appreciated investments and paying taxes. No one enjoys doing that. But the purpose of accumulating wealth isn't simply to preserve every dollar indefinitely. Retirement portfolios are ultimately there to support your retirement, he says.

Lilly tells clients to view a capital gains tax bill from a different perspective. "This is a ‘good' problem to have. Think ahead. Be proactive. We appeal to clients' qualms about paying taxes on concentrated stock positions by using patience and framing the conversation around strategies like capital gains budgets, charitable giving, and gifting appreciated assets to manage taxes effectively."

Barut makes a similar case for looking ahead. "Having a better handle on future taxes — which many retirees don't plan for in their retirement budget — takes some of the uncertainty out of retirement planning. No one enjoys paying taxes, but showing clients their current and future tax burden makes them more open to tax mitigation strategies like Roth conversions and charitable giving," he says.

There may be one final psychological hurdle worth clearing: A capital gains tax bill usually exists because an investment made money. The true challenge is deciding when and how to pay some tax today to help protect the wealth you'll need tomorrow.

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There's more than one good reason why U.S. investors have Portugal in their sights. Ultra-high-net-worth individuals and switched-on investors regard it as a fast-growing entry point into the EU marketplace.

They view significant investment from the likes of Microsoft, which recently pledged to invest $10 billion in new AI data centers in Sines, as a clear indicator that it's an up-and-coming investment hotspot.

They're also attracted to its relaxed lifestyle, and the political and economic stability it offers, seeing it as a potential escape route if geopolitical disruption further impacts their lifestyle at home.

What U.S. citizens need to do to purchase property

Portugal has no nationality-based restrictions on property purchases, whether residential, commercial or new builds, but there are plenty of other rules around buying a property and seeking residency.

The first step for any U.S. citizen seeking to buy property is to get a Portuguese tax number, known as an NIF. It's essential for getting contracts signed, opening bank accounts and paying taxes. It's also required when registering property ownership.

Non-EU buyers will also need an in-country fiscal representative to comply with local tax obligations, such as municipal property taxes and Portugal's requirement for a local contact for non-EU citizens.

You can apply for an NIF online, or in person by pre-booking an appointment at a local tax office.

Bank accounts and legal representation

A Portuguese bank account is a must-have. Without one, buyers will be unable to pay a deposit on a property, utility bills or taxes. Although non-resident bank accounts are available, they will be subject to compliance checks. An in-country account will help to simplify any bureaucracy you may encounter.

Securing the services of a Portuguese lawyer, although not mandatory, is advised. They'll be needed for title checks, registry searches, contract reviews and deed signings.

Lawyers also need to perform due diligence, including verifying land registry certificates, dealing with the tax registry, securing a habitation license and handling any debts or encumbrances associated with the property purchase.

The buying process

Buyers must follow these steps once they've established a bank account, secured a NIF and contracted a legal representative:

• Negotiate the property purchase terms
• Instruct the local lawyer to complete due diligence
• Sign a promissory contract (CPCV)
• Pay a deposit typically ranging between 10% and 30%
• Register ownership when the deed is complete

All of this can be done remotely by power of attorney.

Note that a CPCV is a binding contract. If the seller withdraws, they will need to pay double deposit compensation to the unsuccessful buyer. If the buyer withdraws, they will be liable for a similar level of compensation.

Tax implications for U.S. buyers

Buyers are required to pay a property transfer tax known as IMT. Currently, non-residents pay a flat 7.5% IMT on residential purchases, although the current rules allow for exceptions — for example, if the buyer becomes a Portuguese tax resident within two years of the purchase.

Other annual taxes, such as municipal property tax (IMI) vary by municipality. Mortgage terms for non-residents include higher interest rates and stricter lending criteria.

U.S. citizens holding Portuguese bank accounts may also have U.S. reporting obligations. Foreign accounts may need to be reported through a Foreign Bank Account Report (FBAR) if their combined value exceeds $10,000 at any point during the year.

Taxpayers whose foreign financial assets exceed separate, higher thresholds may also need to file IRS Form 8938 under the Foreign Account Tax Compliance Act.

Given the potential complexity of the tax implications for U.S. citizens, professional cross-border tax advice is highly recommended.

2026 market conditions

Portuguese properties remain a compelling investment proposition, with prices rising rapidly as its popularity grows. The national average rise stands at 19.8%, according to Statistics Portugal (INE), with higher increases in Lisbon and Porto.

Mortgage rates are currently between 3% and 4%, although non-resident mortgage rates are generally higher. This is softened to a degree by the comparative strength of the U.S. dollar, which still provides significant buying power and relatively good value.

Portugal still offers a stable, transparent and accessible property market. Its attractions are clear, but U.S. investors must understand the tax, legal and procedural requirements they'll need to complete before committing.

Portugal Pathways connects internationally mobile individuals and families with specialist cross-border wealth management, estate planning and tax advisory services. Through its network of regulated advisers and family office professionals, it helps clients structure, preserve and transfer wealth across multiple jurisdictions.

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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.

Do you need a steady paycheck in retirement, or are you ok with withdrawing money as you go? Not sure? Then you aren't alone.

We spend decades focused on accumulating money for retirement, but give little thought to how we'll spend it when we retire. Will we create a guaranteed stream of income deposited in the bank each month, or will we pay as we go, taking solace in the fact that the money is there when we need it?

The paths are vastly different. If you choose the guaranteed route, it means taking a portion of your savings and turning it into a steady paycheck, typically through an annuity. If you choose the pay-as-you-go route, it means making periodic withdrawals from your retirement account when you need the funds.

Which approach is right for you depends on several personal factors: your cash flow (steady monthly income), longevity (how long your retirement will last), and temperament (your ability to manage withdrawals on your own)

The decision is not as clear-cut as saving money in a 401(k), is it? Before you decide if you need some guaranteed income in retirement, ask yourself these three questions.

1. Does your guaranteed income cover your living expenses and if not, are you ok with that?

For most retirees, fixed income comes from either Social Security, a pension, other income like real estate, or a combination of some of the above. That money replaces the paycheck from working and typically covers monthly expenses. Sometimes the money is not enough, and retirees have to tap their savings to make up the difference. If that sounds familiar and you're ok with that scenario, then you probably don't need guaranteed income.

But if you're not comfortable with that scenario, guaranteeing the portion of your expenses not covered by Social Security and other fixed income would probably provide peace of mind.

"I would argue that if you cover most of the essential spending with guaranteed income, that takes out a lot of stress in retirement," said Nick Nefouse, global head of retirement solutions and head of LifePath, Multi-Asset Strategies & Solutions at BlackRock.

The key is to guarantee some, not all, of your retirement income, warns Barb Pietrangelo, a financial planner at Prudential Wealth Advisors. After all, retirement can easily last 30 years, so you still need some of the money to grow and compound.

Pietrangelo says to tally your monthly expenses against your recurring income, then ensure guaranteed income fills any gap. "The general rule of thumb is 70% of spending, but that is not always true," said Pietrangelo. "Look at your checkbook or charge card for the last three to six months to see what you are spending on a regular basis."

The easiest way to turn retirement savings into a monthly paycheck is via an income annuity. With this, you get guaranteed income for life, but it comes at a cost. Accessing your money early means high surrender fees, and you'll have no built-in inflation protections unless you pay extra.

2. Will you be ok if the stock market drops and takes your retirement portfolio along with it?

One major benefit of guaranteed retirement income is freedom from market anxiety. Stock drops, high unemployment, or economic slumps won't stop your checks — unlike living strictly off an investment portfolio.

An investment portfolio fluctuates with the market, carrying inherent risk and potential losses. If you can handle market volatility and potential shortfalls, self-managing your withdrawals may work best. But if market swings will keep you up at night, an annuity offers a more reassuring alternative

"Would you be ok if the market dropped? Would you still have enough income to pay yourself forever? Most people wouldn't," said Pietrangelo. "With guaranteed, you don't have to worry about that. But always pair it with another savings vehicle."

3. Is certainty important to you?

Is longevity on your side? Are you worried about running out of money in retirement? If you answer yes to either question, then guaranteeing a portion of your retirement income may be for you. After all, by doing so, you ensure the money will last as long as you do. If you live to 100, you will get a monthly payout until then.

Plus, you'll know exactly how much you get each month. For some people, that certainty is all the permission to spend they need.

"People don't like talking about life expectancy; they like being certain about the ability to spend," said Nefouse. "With guaranteed income, you're more certain; you're more willing to take more risks, take that extra trip."

Take your time before deciding

Whether to guarantee income or withdraw as you go is as unique a decision as your retirement plan. But one thing is for sure: it's not something you should choose blindly. Both approaches have pros and cons.

Guaranteed income gives you peace of mind, but you give up growth and flexibility. Withdrawing as you go provides the potential for appreciation and continued portfolio growth, but there's also more risk. Ultimately, finding the right balance is about matching your money to the lifestyle and comfort level you want.

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The 2026 midterm election season has been a nail-biter. Republicans entered the contests with one of the slimmest margins of control of the House of Representatives in history and seem poised to lose power. The Senate is likely, but not certain, to stay red. But an awful lot can happen in the final weeks and days to turn the tide one way or the other.

One thing is much more predictable, however: The stock market almost always shakes off the uncertainty that leads up to a midterm election and performs well in the third year of a presidency.

Midterm years are choppy, with a bias to the downside. Since 1926, the U.S. stock market has delivered its weakest annual returns in midterm years, on average, rising just 7.5%, compared with an overall average annual return of 12.4%, according to data from BlackRock analysts Bryan Wood and Mark Peterson. The two most recent midterm years have been the two worst years for the S&P 500 Index since 2008: In 2022, stocks fell 18.1%; in 2018, they dropped 4.4%.

Three cheers for year three of a presidential cycle

By contrast, the S&P 500 hasn't lost money in the third year of a presidential term since 1939. We must note that past performance is no guarantee of anything. But we'll also note that in 2023 the pattern played out with an S&P 500 return of 26.3%.

Why is this post-midterm effect so powerful? Because financial markets hate uncertainty, and wrapping up the midterm elections typically reduces political and policy uncertainty — especially when the result is a divided Congress or a significant loss of seats for the president's party, making policy advancements harder to achieve. "Legislative gridlock reduces policy risk and supports additional equity upside, all else equal," says Barclays Capital public policy analyst Michael McLean.

McLean notes that since World War II, the president's party has lost seats in 18 of 20 midterm elections, with 1998 and 2002 the exceptions. The average loss was 25 seats. (The average job-approval rating for presidents was 50% in this period, a good 10 percentage points above President Trump's numbers in August.)

Currently, Republicans control the presidency and both houses of Congress. (The Supreme Court, although not partisan, has a majority that are conservative, Republican-appointed and business-friendly.) The Republican margin in the House sat at just three in August, the smallest majority in 92 years. The Democrats are widely expected to win enough seats to gain control of the chamber.

It's an uphill battle for Dems in the Senate, where Republicans have a 53-47 margin. Although Democrats need to gain just four seats, only 10 of the 35 races this year are competitive, McLean says, and Trump won seven of those 10 states in the 2024 presidential election.

Most election watchers who are modeling the intersection of politics and the markets are planning for a Democratic House and Republican Senate. That scenario, combined with a Republican president, has produced an average annual return in the S&P 500 of 13.7% since 1933, says Keith Lerner, the chief market strategist at Truist Advisory Services. That's the second-best mix for annual returns, behind a Democratic president, Democratic Senate and Republican House. A Republican president with a fully Democratic Congress, however, has produced just 4.9% average annual returns, the worst performance of any combination.

The analysts at LPL Financial say that although a split Congress means investors should expect fewer large legislative changes, they could see more volatility around key issues such as government funding and the debt ceiling. Democrats will likely use House committees to revisit changes the Trump administration made at the Consumer Financial Protection Bureau (CFPB) and to push for greater regulation of banks and prediction markets, LPL believes. Trump will continue to use executive orders and regulatory rulemaking to boost his agenda.

Congressional gridlock isn't guaranteed, however. BCA Research posits a 60% chance of Democrats pulling off an upset and winning the Senate. In that case, restoring the powers of the CFPB would likely graduate from a committee-hearing topic and become legislation that reaches the president's desk, awaiting signature or a veto.

Even in the event of a Democratic sweep — or, less probably, a continuation of Republican control — small majorities in either direction would be likely to limit the party in power's agenda to "more incremental and contested policy outcomes," predict LPL's analysts. And any vetoes by Trump would probably withstand override attempts.

So what's an investor to do when it comes to translating political moves into portfolio moves? You might guess that our advice is to stick to your long-term plan, but keep the following in mind:

1. Don't sit on your hands until the balloons drop

Waiting for post-election certainty could mean missing out. Those hefty third-year gains don't always wait for January 1. Historically, the market begins to rally about one month before midterm elections as polling data starts providing a clearer expectation of the outcome, according to Wood and Peterson, the BlackRock analysts.

Since 1970, the six-month periods immediately following a midterm election have produced an average return of 14.1%.

2. Be careful about handicapping post-election market winners

Many analysts suggest that post-midterm stock gains are broad and difficult to predict by industry. That doesn't stop investors from trying — several high-flying space stocks, for example, had terrible summers as investors figured rising Democratic fortunes meant less funding for the Defense Department, including space exploration.

But Truist's Lerner says that although conventional wisdom often suggests certain sectors should benefit from specific election outcomes, history shows things often unfold very differently than expected. Economic and business trends shape returns more than political headlines, he says.

An exception might be the technology sector, say the Barclays analysts. They note that tech stocks are perennial post-midterm winners because they are among the biggest beneficiaries of a drop in policy uncertainty, particularly with regard to trade and national security issues. Tech tops the sector leaderboard by a wide margin for 12-month post-midterm returns, according to Barclays, outperforming the S&P 500 in all but one midterm election cycle since 1990.

3. Don't obsess over politics

Keep in mind that the mitigation of U.S. political uncertainty is only one part of the risk equation for investors. Matt Gertken, the chief geopolitical strategist at BCA, says there is a tendency to lump all political and geopolitical risks together, from tariffs to the control of the Strait of Hormuz to the U.S. midterm elections to China's global ambitions.

To do so is "misleading," he says. "The midterm election pales in comparison to Hormuz or Taiwan risks."

4. Check your biases

What investors should not do, analysts say, is let their own political preferences prompt investment choices.

Wood and Peterson of BlackRock cite an extreme example to make a point: Since 2013, a $100,000 investment in the S&P 500 would have grown to $398,000 by the start of 2026 if left fully invested. But had investors moved to cash whenever their preferred political party lost the presidency, returns would have been dramatically lower — $214,000 if you pulled out with a Republican president or $186,000 if a Democrat prompted your exodus.

"Letting politics guide investment decisions comes at a significant cost," they say.

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

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Investing is complex, and human beings are wired to make predictable mistakes, which is why you should consider enlisting a good financial adviser — someone who doesn't just manage your money, but also your behavior.

They help you stay disciplined when every instinct screams at you to do something, which happens to even the most experienced investors.

Successful relationships aren't built on promises of market-beating returns or sophisticated strategies. They're built on trust. But trust can't exist without transparency.

Transparency begins with asking the right questions to cut through the marketing language and sales pitches and reveal what really matters.

1. What is your investment philosophy?

By asking about an adviser's investment philosophy, you can learn whether you're dealing with someone who understands how markets actually work or someone who's still chasing yesterday's performance.

You want to hear about evidence-based investing, broad diversification and rules-driven approaches. The adviser should be able to explain the relationship between risk and return without resorting to jargon or promising to eliminate risk entirely.

2. How will you invest my money — and why?

This question digs deeper into the practical implementation of their philosophy. The answer should be directly connected to your personal financial plan and cash flow needs, not some generic model portfolio.

Think of your investments as a portfolio for life and focus on the long term, not on a series of day-to-day, short-term objectives. You want to hear about specific rebalancing rules, tax-management strategies and how investment policy flows from your individual circumstances.

When it comes to designing the actual investment plans, experienced advisers can help devise a sensible combination of relatively risky and relatively riskless assets such as money market funds to point you to the best, most likely path to reach your goals.

They can run simulations to demonstrate the full range of potential outcomes for different modeled portfolios, so you can understand the tradeoffs in designing the right mix to suit your goals, preferences and risk appetite.

The adviser should be able to explain why they've chosen specific asset classes, how they'll manage taxes in taxable accounts and what triggers will prompt rebalancing. Most important, they should connect every recommendation back to your specific situation.

3. How do you get paid, and for what?

When someone's compensation depends on how often they can get you to trade or which products they can sell you, that creates what economists call a principal-agent problem.

Your interests and theirs aren't aligned. You want a clear explanation of all fees, not just the adviser's management fee, but every underlying cost including fund expenses, trading costs and custody fees. Ask when fees change and whether financial planning is included or costs extra.

4. Do you work with people like me?

When an adviser knows exactly who they serve best, they can develop specialized knowledge about the unique challenges those clients face. They understand the emotional and practical aspects of your situation because they've guided many others through similar circumstances.

5. Can you show me a sample plan and your planning process?

A question such as this might separate the professionals from the product salespeople. A real financial adviser should be able to show you examples of their work, demonstrate how they approach scenario planning and outline their implementation process.

A good way to start is with an honest self-assessment that helps you know where you stand now and where you want to get to, evaluating all aspects of your financial health (such as your savings and spending habits.)

Think of it as a financial checkup that can help clarify your goals, needs, and preferences. How is your brain wired? Are you comfortable taking more risk or less? You want to see evidence of comprehensive planning that goes beyond investment allocation.

6. What's your background — and why this profession?

One adviser I know often starts first meetings with a story. He explains that his father suffered a rare brain illness, and while the family had some safeguards (a will, a mandate, disability insurance), they were still left struggling.

That experience shaped his mission: to make sure no family he works with is ever left unprepared. "You'll tell me things you wouldn't tell your spouse or best friend," he says. "I take that seriously." Clients don't just learn his credentials; they learn his reasons.

Look for advisers who can tell a coherent story about why they do this work and how their experience shapes their approach. The best advisers often have personal experiences with money — sometimes painful ones — that drive their commitment to helping others avoid similar mistakes.

7. Who is your custodian? How is my money protected?

You want to understand how your assets are held and protected, separate from the adviser's business. Third-party custody means your money is held by an independent organization such as Charles Schwab or Fidelity, not by the adviser themselves. This protects you if something happens to the advisory firm.

You should also understand SIPC insurance coverage and any additional protections. Bernie Madoff was able to run his Ponzi scheme for so long partly because he served as both investment adviser and custodian, giving him complete control of client statements and making independent verification impossible.

8. How often will we meet — and about what?

Regular communication is essential for maintaining trust and keeping your plan on track. You want to understand not just the frequency of meetings but what will be covered in those discussions. It's crucial to communicate clearly and often.

An adviser can add value by explaining carefully what they're doing when forming portfolios and by setting appropriate expectations. That way, whether performance is good or bad, the investors can feel alright about the decisions that they made upfront.

By putting cadence and content on the table from the start, advisers eliminate one of the biggest sources of client anxiety: Silence. These conversations should cover changes in your life circumstances, progress toward goals, tax planning opportunities, and any adjustments needed in your strategy.

The frequency of these meetings should match your needs and preferences. Some clients want monthly check-ins, while others prefer semi-annual reviews. What matters is that the schedule is predictable and the meetings are substantive, because having a routine builds long-term discipline.

9. Who will be on my team, and who does what?

Modern advisory practices often involve teams rather than individual advisers. You want to understand the roles of different team members, whom your primary contact will be and how decisions get made. You should know whether you'll be working with the named adviser or primarily with associates. Understand the experience levels of different team members and how work gets allocated.

What's the escalation path for complex decisions or unusual situations? The best advisory teams have clear role definitions and good communication systems. You shouldn't feel as if you're being passed around randomly, but you also shouldn't expect to monopolize the senior adviser's time for routine account maintenance.

Before your meeting, consider some of these questions yourself. Think of them as conversation starters, prompts that open feelings and life priorities that often stay hidden.

You'll go into your meeting with a better sense of what you need.

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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.