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

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

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

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

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

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

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

What are grocery store surprise bags?

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

Here's how the process works:

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

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

My experience buying a grocery store surprise bag

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

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

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

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

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

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

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

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

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

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

Here's what I got

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

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

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

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

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

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

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

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

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

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

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

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

1. The scarcity tax

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

2. The variety tax

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

3. The relative value tax

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

The bottom line

Would I get it again? No.

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

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

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

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

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

Read More

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

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

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

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

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

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

Calculating your RMDs

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

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

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

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

Lower your RMDs with Roth conversions

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

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

If you are 73 or older, do this…

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

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

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

If you are under 73, do this…

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

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

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

RMDs don't have to be a headache

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

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

Related Content

• Got $1 Million Saved for Retirement? Here Are the Huge RMDs the IRS Makes You Take at Ages 73, 75, 80 and 85
• Seven 401(k) Perks You May Not Know About
• Your Kids Are Doing Fine. Is It Time To Spend Some of Their Inheritance?

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

More than most investors realize.

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

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

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

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

Opportunities in the pipeline

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

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

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

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

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

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

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

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

Investing in the age of AI

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

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

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

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

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

Related Content

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• How Can Investors Profit From AI's Energy Use?
• Energy Investing Is a Long Haul: How You Can Prepare the Road Ahead for Your Heirs
• Fortune Favors the Gold: Expert Highlights a Little-Known Game-Changing Investing Strategy
• Do Self-Storage REITs Deserve Space in Your Portfolio? It's a Yes From This Investment Adviser

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

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

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

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

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

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

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

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

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

Side hustles build wealth, but jobs are boring

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

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

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

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

Girl/boy math and 'no-spend' months

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

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

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

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

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

Be your own financial adviser — it's easy

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

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

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

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

Setting the right foundations

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

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

Related Content

• 7 of the Best Budgeting Apps for 2026
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• Gen Z's Biggest Money Mistakes (Plus, Small Wins That Fix Them)
• A Matter of Trustees: Is Your Spouse the Best Person to Manage the Kids' Trusts?
• Tending to Your Estate Plan This Spring? Don't Forget to Give Your IRA Some Love

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

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

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

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

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

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

Passing on assets, values and processes

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

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

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

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

Using a flexible giving vehicle

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

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

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

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

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

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

How to navigate family dynamics

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

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

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

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

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

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

Related Content

• Great Wealth Transfer: How Families Can Get on the Same Page
• Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who Knows
• High Earners Want to Give Money and Communities Need It: Impact-First Investing Can Bridge the Gap
• Giving Gamechanger: Why Now's the Time to Use a Donor-Advised Fund
• Donating Complex Assets Doesn't Have to Be Complicated

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

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

1. Changes to the premium tax credit

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

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

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

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

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

2. Forecasting what Congress will do

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

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

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

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

3. Paying back excess PTC

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

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

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

4. The PTC is an IRS audit red flag

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

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

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

About Ask the Editor, Tax Edition

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

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

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

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

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

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

More on Retirement, from the Kiplinger team:

• 3 Questions That Reveal if You’re Actually Ready to Age in Place
• The Cost of Staying Put: Aging in the Neighborhood You Love
• The Rise of the 'Half-Back' Retiree: Why a Perfect Florida Condo Isn't Enough
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Americans 50 and older have long been allowed "catch-up contributions" to their 401(k) plans, IRAs and other retirement accounts. The reason is straightforward: as the runway to retirement gets shorter, Uncle Sam wanted to incentivize as much saving as possible.

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

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

What is a super catch-up contribution?

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

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

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

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

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

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

How to invest your super catch-up contribution

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

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

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

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

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

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

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

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

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

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

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

Don't forget about taxes

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

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

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

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

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

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

How capital gains tax works

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

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

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

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

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

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

State capital gains taxes

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

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

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

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

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

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

Also, keep in mind:

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

Capital Gains Tax Rates by State

States with special capital gains rules

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

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

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

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

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

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

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

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

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

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

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

Federal Capital Gains Tax Rates for 2026

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

• 0%
• 15%
• 20%

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

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

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

Ways to reduce capital gains tax

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

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

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

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

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

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

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

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

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

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

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

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

What are some legacy planning basics?

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

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

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

Some common components include:

A basic will

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

A will allows you to:

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

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

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

A living will

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

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

A healthcare power of attorney (POA)

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

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

A financial POA

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

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

Other must-dos to help avoid probate

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

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

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

Let's talk about trusts

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

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

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

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

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

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

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

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

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

Do you really need a trust?

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

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

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

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

The sooner you get started, the better.

Kim Franke-Folstad contributed to this article.

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

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

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

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

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

Market drops trigger anxiety

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

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

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

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

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

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

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

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

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

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

The role of risk management in a retirement strategy

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

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

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

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

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

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

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

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

Building a reliable strategy for uncertain markets

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The incentive you're not supposed to notice

Revenue sharing is simple:

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

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

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

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

Think about the grocery store "shelf space" analogy.

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

Now apply that to your portfolio:

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

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

The cost to you: Hidden fees and compounding costs

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

• Advisory fees
• Fund expenses
• Platform costs

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

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

Why most investors never see it

Revenue sharing is technically disclosed.

But in practice?

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

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

Here's the truth most investors miss

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

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

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

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

The clean break: Fee-only financial advice

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

NAPFA advisors operate under a strict standard:

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

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

Why this matters even more than credentials

Many investors focus on designations, titles and branding.

But here's the uncomfortable truth:

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

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

A simple process of elimination

If you want better financial advice, start here:

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

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

The bottom line

You have two choices when it comes to financial advice:

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

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

For many investors, that means one thing:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do hedged ETFs work?

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

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

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

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

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

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

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

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

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

How we picked the best hedged ETFs

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

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

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

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

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

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

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

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

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

JPMorgan Hedged Equity Laddered Overlay ETF

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

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

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

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

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

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

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

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

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

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

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

Learn more about HELO at the JPMorgan provider site.

Simplify Hedged Equity ETF

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

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

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

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

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

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

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

Learn more about HEQT at the Simplify provider site.

iShares Large Cap Deep Buffer ETF

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

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

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

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

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

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

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

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

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

Learn more about IVVB at the iShares provider site.

Parametric Hedged Equity ETF

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

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

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

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

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

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

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

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

Learn more about PHEQ at the Parametric provider site.

Fidelity Hedged Equity ETF

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

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

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

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

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

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

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

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

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

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

Learn more about FHEQ at the Fidelity Investments provider site.

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

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

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

What are subscription traps?

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

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

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

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

The price you didn't agree to: Junk fees

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

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

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

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

The regulatory wave: Are other places following?

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

Here are several examples of what states are doing:

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

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

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

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

Here's how to protect your cash from hidden charges

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s what consumer experts suggest.

Know your rights.

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

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

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

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

Cancel strategically.

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

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

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

Shop around in advance.

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

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

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

Fight back.

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

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

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

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

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The third-place match of the men's World Cup is hardly a consolation prize. In fact, it's usually among the most exciting matches of the tournament, as teams play with nothing to lose, leading to higher-scoring matches.

This makes the match in Miami a must-attend experience for any soccer fan, not only because of the excitement of the World Cup, but also the diverse array of things to do and see in Miami.

The match kicks off at 5 p.m. EST in Miami Stadium in Miami Gardens on Saturday, July 18. I'll show you some of the best Hilton hotels to consider for your trip, depending on what you want to get into, along with a few suggested attractions to make your stay memorable.

Make Miami part of your World Cup vacation

Miami is one of my favorite cities. Each neighborhood has its own unique flavor and feel.

Little Havana is the perfect destination for Cuban culture, art and amazing food; Brickell is a downtown hotspot where locals hang out, and Wynwood is an artistic gem known for jaw-dropping street murals, art museums and some of the city's best breweries.

The one thing I recommend when visiting is to take your time while traveling, as traffic is a beehive, even on the weekends. The other thing to keep in mind is that Miami Stadium isn't in downtown Miami; it's north of the city, about a 20- to 25-minute drive.

Thankfully, Miami is offering free shuttles for the event with proof of ticket. Here are the shuttle pickup locations:

• Golden Glades Multimodal Transit Station: 15890 NW 7th Ave, Miami.
• Aventura Brightline Station: 19796 W Dixie Highway, Miami.
• Dr. Martin Luther King Jr. Plaza Metrorail Station: 6205 NW 27th Ave, Miami. No on-site parking is available.
• Seminole Hard Rock Hotel & Casino: 1 Seminole Way, Hollywood.

Knowing where to stay can help you plan a trip that includes the World Cup match and other attractions. Here are some suggestions based on different locales:

Close to the stadium recommendations

If you're looking for a quick trip where you get to the match quickly while enjoying time in your hotel, here are a few options to consider:

• Hilton Miami Aventura: The hotel is the perfect choice for convenience and relaxation. It features an upscale rooftop pool and quick access to Sunny Isles Beach via the afternoon shuttle.
• SERENA Hotel Aventura Miami, Tapestry Collection by Hilton: This charming boutique hotel offers a buffet breakfast, breathtaking views of the Miami skyline and is roughly 6 miles from the stadium.

Live the coastal life, Jimmy Buffet style

Meanwhile, if you're in town not only for soccer, but also want to relax and take in some rays on a beach, where you stay will matter a lot. There's Fort Lauderdale, the sleepy yet affluent suburb to the north of Miami, offering exceptional beach views, great restaurants and a quieter neighborhood vibe.

And it's the better overall beach experience compared to Miami. Here are the top stays on the coast:

• Hotel Maren Fort Lauderdale Beach, Curio Collection by Hilton - This stunning hotel offers amazing beachfront views, and you can walk to shops and restaurants. There is also a hotel shuttle to Fort Lauderdale Airport (for a fee).
• Beach House Fort Lauderdale, a Hilton Resort - If you're searching for the ultimate beach experience, look no further than this hotel. It features a wraparound deck, spa and condo-style rooms for the ultimate escape from the bustle.

Experience the local Miami vibes

If you want to experience the vibrant downtown core, here are a few places to consider:

• Hampton Inn & Suites Miami Brickell-Downtown: This hotel, nestled in downtown, has a rooftop pool, easy access to restaurants and shops and a daily hot breakfast.
• Hampton Inn & Suites Wynwood Design District: The hotel's design is a tribute to Wynwood's exceptional art culture. The hotel is among the highest-ranked in the area, with walkability to Wynwood Walls and downtown Miami.

Extend your trip with these ideas

One of the perks of Miami is being so close to unique attractions, such as:

• Take the train to Orlando: Known as the theme park capital of the world, this is a perfect family-friendly day trip, easily accessible via the Brightline high-speed rail service that connects Miami directly to Orlando.
• Head to Key Largo: A slower-paced, oceanic oasis about 60 miles from Miami. It's an ideal spot for snorkeling, scuba diving, glass-bottom boat tours and kayaking for a relaxing post-match escape.
• Explore the Everglades: Taking an airboat through the Everglades is a surreal experience, allowing you to explore and learn about the wildlife and the area.

How to choose the right hotel for your World Cup trip

As you plan your stay, it's important to consider the full cost of the trip, including transportation, parking, resort fees and meals, rather than room rates alone. Also be mindful of your hotel's cancellation policies and transportation plans, as traffic the day of the match will be very busy around the stadium.

The third-place match can be more than a one-day event: With the right home base, it can become the starting point for a family vacation, beach getaway or Florida Keys escape.

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If you're a frequent flyer, you likely have a preferred airline — and a credit card to match. These cards offer significant value, from free checked bags and intro bonuses to points that add up to free flights.

To identify the best airline credit card reward program, we asked you to rank them in an online survey for the 2026 Kiplinger's Readers' Choice awards conducted over the winter. Over 4,000 readers participated in the survey, ranking airline credit card reward programs on three factors: Customer service, most recommended and overall satisfaction.

For the third consecutive year, Southwest Airlines won the best overall award for airline credit card programs. Here are three reasons our readers recommend them, along with some recent changes Southwest made that impact your travel.

1. Tailored rewards: A Southwest card for every traveler

You can get three different Southwest credit cards. The Rapid Rewards Plus card gives you 3,000 points on your cardmember anniversary. The Southwest Rapid Rewards Premier card has a 6,000-point anniversary bonus, and the Southwest Rapid Rewards Priority Card offers a 7,500-point anniversary bonus.

On top of that, each card offers cash-back incentives (in the form of points) for purchases made with Southwest. The Priority card earns you the most, with four points per dollar spent on Southwest purchases.

It is also the quickest way to obtain A-List status. A-List status is Southwest's tier-based loyalty program that offers perks such as priority boarding, a dedicated check-in line and bonus points on flights.

To earn A-List status, fly 20 one-way routes or earn 35,000 qualifying points in a year. Cardholders earn 2,500 Tier Qualifying Points toward A-List status for every $5,000 spent.

2. The fastest route for free travel for two

The Companion Pass is among the most valuable travel benefits, as it allows you to bring a companion on your flights for free, excluding taxes and fees. Each Southwest card offers you a 10,000-point bonus every year.

One reader said, "By timing the bonus offer correctly, you can get a companion pass for almost two years - well worth the effort to concentrate spending on this card!"

This bonus is a major reason why readers cite these cards as the fastest route to free travel for two. By maximizing your Southwest purchases and using these annual boosts, you'll reach the 135,000 points needed for the pass. You can also qualify with 100 one-way flights in one calendar year.

3. Responsive service and tech that makes travel easy

One reader summed up their experience perfectly: "I have called customer service many times, and they are VERY helpful." This also correlates with a recent J.D Power airline satisfaction survey that ranked Southwest highest in customer satisfaction in the economy/basic economy section for the fifth consecutive year.

Along with customer service, having an easy-to-use app is integral if you encounter delays or cancellations. I've flown a few times with Southwest this year, and even with delays, I find changing my flights through the app a quick way to get travel back on schedule without standing in a theme park-sized line to speak with customer service.

Keep in mind too that Southwest made some pretty significant policy changes. Now, you have assigned seating like any other airline. Also gone are free checked bags. Southwest charges $35 for your first checked bag and $45 for your second. However, if you have a Southwest credit card, your first checked bag remains free.

While our readers ranked Southwest the highest airline, other airlines also made our rankings:

• Alaska Airlines
• Delta Air Line credit cards
• JetBlue credit cards

Overall, Kiplinger readers favor Southwest for its responsive customer service, diverse card offerings and bonuses that make it easier to obtain a Companion Pass. While some of the recent changes (doing away with free luggage and assigned seating) might perturb some passengers, if you have a Southwest card, your first bag will still fly for free, making the card's perks even more valuable.

Want to see how our readers ranked your favorite airline? Visit our Kiplinger Readers' Choice best airline credit card rewards programs to see our full ranking and what our readers liked about each one.

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Roth conversions have recently become one of the most popular retirement tax planning strategies. Financial headlines often promote them as a way to create tax-free income, reduce future required minimum distributions (RMDs) and leave a more tax-efficient legacy to heirs.

For many retirees, those benefits are real.

But Roth conversions aren't a one-size-fits-all solution. In fact, as a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that converting retirement assets at the wrong time can result in paying more taxes than necessary and reduce your long-term wealth.

The key question isn't whether Roth conversions are good or bad; it's whether paying taxes today will save you on taxes in the future (I wrote a bestselling book all about taxes — you can request a free copy here).

Below are six situations where retirees may want to think twice before converting.

1. You don't have a pension

One of the biggest factors in determining whether a Roth conversion makes sense is your expected future tax bracket. For retirees without a pension, their future taxable income is often lower than it was during their working years, as many rely primarily on Social Security and modest withdrawals from retirement accounts.

As a result, they could remain in relatively low tax brackets throughout retirement.

Today's tax code also includes a generous standard deduction (up to $32,200 for 2026). For some retirees, that deduction might shelter most or even all of their taxable income.

If you expect to stay in a lower tax bracket for life, voluntarily accelerating taxes through a Roth conversion might not provide as much benefit.

By contrast, retirees with substantial pensions often face a different reality. Pension income can create a permanent tax floor that follows them throughout retirement, making Roth conversions far more attractive in certain cases.

2. You have less than $500,000 in tax-deferred accounts

Your account size matters. When evaluating Roth conversions, it's important to consider future RMDs. Starting at age 73 (or 75 for many younger retirees), the IRS requires withdrawals from traditional IRAs and other tax-deferred retirement accounts.

However, smaller account balances produce smaller RMDs.

For example, a retiree with $500,000 in a traditional IRA might have an initial RMD of roughly $20,000. Combined with the standard deduction and other available tax benefits, that withdrawal could have little impact on their overall tax situation.

If your retirement savings aren't large enough to create a meaningful future tax burden, converting assets today could mean paying taxes earlier than necessary without generating significant long-term savings.

3. Your tax rate today is higher than it will be in retirement

At its core, a Roth conversion is a tax-rate arbitrage decision. You're choosing to pay taxes now because you believe you'll pay the same or even a higher rate later. This strategy falls apart if the opposite is true.

Consider someone in their peak earning years who is currently in the 32% federal tax bracket. If they have no pension and moderate retirement savings, they may eventually find themselves in the 12%, 22% or even lower brackets after they retire.

In that scenario, converting assets while working could mean prepaying taxes at a significantly higher rate than what would have been owed later.

Before converting, retirees should estimate their likely retirement income rather than assuming their future tax rate will automatically be higher.

4. You're planning to retire early

One reason not to do Roth conversions today is that you could have a better opportunity later. Early retirement often creates what planners call a "tax window": A period after earned income stops but before Social Security, pensions and RMDs begin.

For example, someone retiring at age 58 might have several years when taxable income drops dramatically. During those years, they can often perform Roth conversions in much lower tax brackets than they could while working.

This window can be particularly valuable because it could allow retirees to:

• Convert assets before Social Security becomes taxable
• Avoid increasing Medicare premiums tied to higher income
• Fill lower tax brackets more efficiently
• Reduce future RMDs

Rather than converting aggressively during high-income working years, some retirees may benefit from waiting until these lower-income years arrive.

5. Your children might be in lower tax brackets than you

Many Roth conversion discussions focus on leaving tax-free assets to heirs. This can be an advantageous legacy planning strategy, but it isn't always the right answer.

Today's inherited IRA rules generally require most non-spouse beneficiaries to empty inherited retirement accounts within 10 years. Because of this rule, many parents assume they should convert everything to Roth accounts, but there are considerations to think about.

The better question is: What tax bracket will your children be in when they inherit the money?

If your children have higher incomes than you, significant retirement savings of their own or expect to remain employed during those 10 years, Roth conversions may make more sense because each of these could result in your children paying more taxes down the road than you would have paid.

But if they're likely to be in lower tax brackets than you, allowing them to inherit traditional IRA assets could result in a lower tax bill being paid across generations.

Legacy planning shouldn't focus only on your tax rate, but should also account for the tax situation of the people who will ultimately receive the assets.

6. You're single today but expect to marry

Tax brackets are not static. A single retiree who expects to get married in the near future could gain access to larger tax brackets and a higher standard deduction through married-filing-jointly status.

In some situations, waiting until after marriage to perform Roth conversions can create additional flexibility and allow larger conversions at lower effective tax rates.

This isn't a common planning strategy, but it's one that can be overlooked when evaluating conversion opportunities.

Bonus consideration: You're moving to a lower-tax state

State taxes can significantly influence the math behind a Roth conversion. Someone working in a high-tax state, such as California, may pay an additional 7% to 10% or more in state income taxes on converted dollars.

If that same person plans to retire in Florida, Tennessee or another state with no income tax, waiting would likely generate sizable tax savings.

In some cases, the difference between converting before and after a move can amount to tens of thousands of dollars.

The bottom line

Roth conversions can be an incredibly effective tool, especially for retirees with pensions, large tax-deferred balances and concerns about future taxes. But the goal isn't to convert simply because Roth accounts sound attractive. The goal is to minimize your lifetime taxes.

Related Content

• If You're Converting to a Roth IRA, Don't Do It Like This
• 5 Reasons Roth Conversions and Pensions Work Well Together
• This Changes Your Social Security Decision (Especially if You're in the 2% Club)
• 7 Times to Dip Into Your Roth IRA if You Have a Pension (and When to Leave It Alone)
• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You

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

"I feel like we'll never actually retire."

"We make good money. But what retirement? It keeps moving further away."

"I don't want to abandon my kids. But I also don't want to work until I'm 67 to make sure they're OK."

These aren't quotes from struggling households. They're what I hear regularly from Gen X professionals, dual-income earners in their late 40s and early 50s with real portfolios and real incomes.

They're high earners with strong intentions — and a quiet but growing line item that almost none of them budgeted for: The Bank of Mom and Dad.

Picture this household: Both spouses are 49 with a combined income of $400,000 and an investment portfolio of $1.5 million. They want to retire at 60 to live on $175,000 a year in retirement, but feel as if they've finally earned the life they've been building.

Yet, $50,000 a year is quietly flowing out of that household to support two adult children, $25,000 each.

• One is 22, in her final year of college and living on campus but relying on her parents for tuition, a car, insurance and everyday expenses.
• The other is 27, recently engaged, living at home, needing help with a wedding and, eventually, a home down payment.

Neither child is a failure. Both parents are generous. But without a plan, that $50,000 is on its way to $70,000. In the 11 years before this couple wants to retire, that unstructured support will cost them far more than money.

People in these circumstances feel behind because they are. It's not because they failed, but because no one helped them plan for this.

The situation is fixable, but only if it changes before the window closes.

The Gen X retirement squeeze is real and getting worse

Research by the Alliance Retirement Income Institute found that Gen X is the least financially prepared generation for retirement by nearly every measure. While Baby Boomers dominate the headlines, Generation X faces an even greater retirement crisis.

In 2025, the eldest Gen Xers entered their 60s, with multiple studies highlighting their lack of retirement preparedness, compounded by their status as a sandwich generation simultaneously caring for aging parents and supporting young adult children.

Meanwhile, roughly one in three adults ages 18 to 34 in the U.S. live with a parent, according to 2025 Census data, up slightly from the year before. A growing share aren't just living at home; they're financially dependent, sometimes deeply so.

For the theoretical household described above, the $50,000 in annual support isn't the only problem. It's what that number becomes. If support continues growing with life events, the wedding, the down payment, extended college costs, ongoing lifestyle needs, that figure reaches $70,000 per year with no defined exit point.

Over the 11 years before their target retirement at 60, unchecked support will have redirected hundreds of thousands of dollars that could have been compounding in retirement accounts, brokerage investments, and tax-advantaged savings.

That's not a small gap. That's a retirement.

One question before we run the numbers

I want to start where I start with every client, with a question I've asked clients for years: "Are you content with the financial and emotional investments you have placed into your adult children thus far?"

If the answer is yes, that doesn't mean you continue indefinitely. It gives you permission to transition from guilt to intention, moving from reactive support to aligned support.

If the answer is no, that doesn't mean you've failed. It means you have clarity.

This question is the foundation of my work on boomerang parenting and what it costs Gen X families, and I've explored it in depth in my Bank of Mom and Dad planning guide.

What I've found across thousands of conversations is that most parents aren't irresponsible. They're unresolved. They haven't yet asked the question that turns support from a reflex into a plan.

What the numbers show

To fund $175,000 annually in retirement, using a 4% withdrawal rate as a planning baseline, this couple need about $4.375 million at age 60. They have $1.5 million today. That leaves a gap of roughly $2.875 million to build in 11 years, achievable with disciplined savings and compounding, but only if their dollars are pointed in the right direction.

Currently, $50,000 per year is flowing to adult children. If the 22-year-old transitions to financial independence after graduation but the 27-year-old's needs continue to grow through wedding costs, a down payment, ongoing lifestyle support after marriage, that figure reaches $70,000 or more per year with no defined end.

Ameriprise Financial found that working parents contribute 2.3 times more to their adult children than to their own retirement accounts each month. For this household, that ratio is quietly becoming true.

Just as the structure of an adviser's fee can quietly compound against retirement outcomes over time, so can unstructured household outflows. The Bank of Mom and Dad is one of the largest untracked line items in a Gen X financial plan.

The compounding cost of that drift is measurable. Here's the planning illustration:

That $510,000 to $625,000 difference is not a rounding error. It's the gap between retiring at 60 and working until 63 or 64. It is the gap between retiring with confidence and retiring with the same anxiety that followed this household through its peak earning years.

"We don't want to abandon them. We just don't know how to stop."

That's a conversation worth having before the numbers get worse.

The catch-up window: Use it or lose it

What makes the next decade specifically critical for this Gen X household is that the tax code is actively rewarding people in their situation, if they act.

For 2026, participants in most 401(k), 403(b), governmental 457 plans and the federal government's Thrift Savings Plan who are 50 and older can generally contribute up to $32,500 each year. That's a $24,500 base contribution plus an $8,000 catch-up for those 50 and older.

The SECURE 2.0 Act introduced super catch-up contributions for those ages 60 to 63. For 2026, the super catch-up limit is $11,250, higher than the standard $8,000 catch-up available to those 50 and older, and designed to help those closest to retirement maximize their savings in the final stretch.

For a dual-income household, this is significant. If both spouses contribute maximally in their 50s and into their early 60s, the combined annual contribution capacity in employer-sponsored plans alone exceeds $65,000 per year, before IRA contributions and brokerage investments.

One note for high earners: Starting in 2026, if you earned more than $150,000 in FICA wages in the prior year, catch-up contributions in employer-sponsored plans must be made on a Roth after-tax, basis.

For a $400,000 dual-income household, this almost certainly applies. This isn't a penalty. Roth contributions build tax-free retirement wealth, but it requires coordination with your plan and your adviser.

Every dollar redirected from unstructured adult-child support into catch-up contributions is a dollar that compounds tax-advantaged for 10 or more years and avoids taxation in retirement. For high earners in peak earning years, this is one of the most direct financial moves available.

The five-step plan for Gen X parents running the bank

Step 1: Get aligned with your spouse or partner first.

Before any conversation with your adult children, get aligned emotionally and financially with each other. Conflicting messages, one parent holding firm while the other quietly supplements, destroy planning integrity and create resentment in both directions.

This alignment conversation covers three questions:

• How much can we afford annually without compromising our retirement security?
• What are we willing to support?
• What's the exit strategy?

Unity is not about being harsh. It's about being honest with each other before you can be honest with your children.

Step 2: Audit the real numbers.

Many parents are genuinely surprised when they total what they're spending on adult children annually. Housing, food, cellphone plans, car insurance, credit card transfers, tuition extensions, medical costs and emergency payments that recur like clockwork all add up to a real line item. For this example household, $50,000 is only the beginning of an honest audit.

Compare that number with current retirement contribution rates, brokerage account contributions, debt-reduction acceleration and lifestyle goals that have been postponed. Seeing trade-offs clearly, in actual dollars, removes guilt and restores agency.

Step 3: Distinguish between support types and set a timeline.

Not all support is equal. A 22-year-old in her final year of college has a clear exit point. A 27-year-old recently engaged and still living at home, needing wedding funds and a down payment, represents a much longer and more open-ended financial commitment if left unstructured.

Ask explicitly: Is this support a bridge or a baseline?

• Time-limited essentials cover final semester costs, a specific medical event or a relocation deposit. These have natural endpoints. Fund them clearly and close the chapter.
• Intra-life transfers are intentional gifts toward wealth-building milestones such as a home down payment or an emergency fund. These can be profoundly impactful and might carry more meaning than a post-death inheritance. They should be deliberate, budgeted and non-recurring.
• Lifestyle subsidies include ongoing rent, car payments, credit card transfers and recurring lifestyle support. These are the most consequential category because they rarely have a defined exit and tend to grow, not shrink, over time.

For the 27-year-old in this household, a one-time, clearly bounded contribution toward a wedding or down payment with a specific ceiling is fundamentally different from continuing open-ended household support into the couple's first years of marriage. Define it now, before the number drifts.

Step 4: Redirect with intention.

If this household redirects $20,000 annually of unstructured support into retirement and after-tax accounts, starting in year three when the 22-year-old finishes college and becomes self-supporting, the compounding difference in the following eight years is substantial.

If both spouses max out 401(k) contributions including catch-up provisions starting at age 50, the annual retirement contribution capacity climbs well above $60,000 per year, enough to put the $4.375 million retirement target within reach.

An after-tax brokerage account deserves focused attention. Unlike retirement accounts, brokerage accounts provide liquidity before age 59½, flexible withdrawal options and the ability to fund retirement expenses from ages 60 to 72 before required minimum distributions begin. For a household targeting retirement at 60, this account isn't optional; it's essential.

Step 5: Have a compassionate, adult conversation.

The financial plan is only as effective as the conversation that introduces it.

With the 22-year-old, the conversation is relatively direct: There is a clear graduation date, and with graduation comes a transition to financial independence. You're there for genuine emergencies, a health crisis or an unexpected job loss, not ongoing lifestyle support. This is not rejection; it's the clearest expression of belief in her capability.

With the 27-year-old, the conversation requires more care. He's newly engaged, wants to build a life, and has been living inside the support structure of his parents' home. Be clear about what you can offer — perhaps a defined contribution toward a wedding or down payment with a specific amount and a specific end date — and equally clear that ongoing housing and lifestyle support has a sunset.

Frame it as preparation, not withdrawal. The boundaries you set today protect both your retirement and his long-term resilience.

Support without structure breeds resentment. Structure without compassion breeds distance. The goal is neither.

What intra-life transfers can do that inheritances can't

The most meaningful financial gifts you can give your adult children might be the ones you give while they're in their 20s and 30s, when a down payment helps them build equity for 30 years, or when early retirement account seeding gives compound growth decades to run.

In my experience, both parents and their adult children often say the same thing when this comes up: They would rather the money have meaning now, when it can change the trajectory of a young family's life, than arrive later as part of an estate settlement.

The key is intentionality. An intra-life transfer that is bounded, purposeful and budgeted into your financial plan is fundamentally different from ongoing support that grows without definition or consent.

For the 27-year-old preparing to buy a home, a structured gift of $20,000 to $25,000 toward a down payment, planned, finite and clearly communicated, might do more lifetime good than a far larger sum left in an estate. It also carries more meaning to both the giver and the receiver when it's given with intention rather than obligation.

Aligned generosity and aligned retirement savings are not in conflict. Your financial decisions should reflect how you actually want to live, not just how you feel in the moment.

Related Content

• How to Help Your Adult Kids Without Hurting Your Retirement
• The Real Cost of Funding Adult Children: Postponing Retirement
• Before You Give Money To Your Kids, Ask Yourself These 3 Questions
• High-Income But Low Confidence? This 5-Point Plan From a Financial Planner Can Fix That
• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth

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

Long-term care can become one of the biggest expenses in retirement. Yet, traditional long-term care insurance doesn't fit everyone's budget or needs.

Rising premiums and stricter underwriting have pushed many people to seek more flexible ways to protect their savings and future care choices.

We'll cover what you need to know about long-term care insurance alternatives with modern strategies for wealth protection.

What long-term care policies cover

Long-term care insurance (LTCI) helps pay for the kind of support many people need as they age. Think of assistance with daily activities such as bathing, dressing, eating, walking and buying groceries.

Policies typically reimburse a daily or monthly amount for such services as in-home aides, adult day care, memory care and skilled nursing. The goal Is to preserve assets and give families options when health needs change.

Bryan Henry, president of PeterMD, recommends looking beyond conventional insurance and finding alternatives for long-term care.

"Traditional LTCI has become harder to buy and harder to keep," Henry says. "Premiums run high, which can be unpredictable. Policy language is dense. Benefits can be limited or exclude certain situations.

"Many insurers have left the market over the past decade, and those remaining often require strict medical underwriting. That's why more people are now looking for flexible alternatives."

Here are some strategies to consider.

Long-term care insurance

Hybrid insurance products

Hybrid insurance policies combine life insurance or annuities with long-term care benefits. If you need care, the policy accelerates benefits to cover it. If you don't, your heirs receive a death benefit, or you can access the cash value.

These policies typically come with guaranteed premiums or at least more predictable funding than stand-alone LTCI.

On the tax front, many hybrid benefits are treated as tax-free when used for qualified long-term care under federal rules. See IRS guidance related to qualified LTC benefits and Form 1099-LTC.

Some policyholders use a tax-free 1035 exchange from an existing life insurance policy or annuity to fund a new hybrid contract. Check FINRA's overview of 1035 exchanges.

Annuities with long-term care riders

Annuities can be customized with riders that boost income, or they can provide extra benefits if you become chronically ill. You're essentially building a baseline retirement paycheck with an added layer that helps cover care if needed.

Some riders multiply your monthly benefit for a set period if you need assistance with the activities of daily living. Others waive certain fees during a qualifying care event.

These designs vary widely by carrier, so, you need to understand the contract language, such as how benefits trigger and what counts as covered care.

Health savings accounts (HSAs)

If you're covered by a high-deductible health plan, an HSA can be surprisingly powerful for future care.

HSAs come with a rare triple-tax advantage:

• Contributions might be deductible or pretax
• Funds can be invested and grow tax-free
• Withdrawals for qualified medical expenses are tax-free

Long-term care services and a portion of LTC insurance premiums might qualify as deductible under IRS rules. See IRS Publication 969 and Publication 502.

As contribution limits change each year, check the current numbers before you automate deposits.

Alternative investment strategies

Self-funding and portfolio diversification

Some households prefer to self-fund care. That doesn't mean ignoring the risk; it means creating a dedicated long-term care reserve in your financial plan and investing it thoughtfully.

You might segment a portion of your portfolio as a long-term care reserve sized to your goals and family health history. Match some of that reserve to inflation-protected assets or short-duration bonds to reduce sequence risk.

A TIPS ladder or a balanced mix of stocks and bonds can help keep pace with rising care costs. Keep cash for the first six to 12 months of potential care, then invest the rest for growth and resilience.

You can also add stopgaps (such as a smaller hybrid policy) to cap worst-case scenarios while still relying on investments to cover the bulk of expenses.

Real estate investment

Real estate can serve two purposes: An income source now and a fallback for care later. Here are some potential investments:

• Rental properties can generate predictable cash flow
• Real estate investment trusts (REITs) offer a simpler way to access the sector without being a landlord
• A reverse mortgage can turn home equity into tax-free loan proceeds to pay for in-home help or facility care, but you need to understand interest accrual and repayment rules before signing

Jeffrey Zhou, CEO and founder of Fig Loans, notes that alternative investment strategies work best when real estate and self-funding are integrated into a broader retirement plan. He emphasizes that both portfolio-based funding and property assets can complement each other in managing long-term care costs.

"A well-structured approach that combines diversified self-funding strategies with real estate can provide steady cash flow in retirement," Zhou explains. "This helps offset rising care costs while preserving the underlying assets as part of long-term wealth."

This perspective highlights how a balanced mix of liquid investments and property income can improve financial resilience. It ensures retirees are not overly dependent on any single source of funding for healthcare and long-term care needs.

Government programs and community resources

Medicare and Medicaid

This is where confusion often creeps in. When it comes to government programs, there's a line drawn between the two:

• Medicare covers medical care, not custodial long-term care. It might pay for limited, short-term skilled nursing or rehab after a qualifying hospital stay. However, it's not going to help with activities of daily living that most people eventually need.
• Medicaid does cover long-term care, but only for people who meet strict income and asset rules, which often means spending down savings first. There's also a five-year look-back period on asset transfers in most states, plus complex spousal protections to navigate.

Proper planning helps you qualify for benefits when needed while protecting your life savings and your home. The key is understanding these programs' rules well before you need care.

Local and community resources

Don't overlook your local support network:

• Area agencies on aging can connect you with home-delivered meals, transportation, caregiver respite and benefits counseling. Eldercare Locator is a perfect example of this alternative access for older people.
• Nonprofits and faith-based groups often offer volunteer services. They provide older people with long-term care.
• Large organizations, such as AARP Caregiving, maintain extensive caregiver guides and checklists you can use right away.

There are more choices than there used to be

Traditional long-term care insurance isn't your only option. With rising longevity and rising costs, planning ahead makes sense, and you have more choices than you used to.

That's why you should consider hybrid life policies, annuities with care riders, HSAs, a thoughtful investment reserve and even targeted real estate. They can work together to protect both your care choices and legacy.

The sooner you prepare for future care costs, the more financial stability you're likely to have later.

Related Content

• This Trust Can Protect Your Assets From Long-Term Care Costs
• Planning for Care If You Can No Longer Care for Yourself
• I'm a Financial Planner: Here Are 3 Ways to Plan for the Soaring Cost of Long-Term Care
• Four Tax-Friendly Ways to Pay for Long-Term Care Insurance
• How to Negotiate to Lower Your Medical Bills: These Strategies Can Help Reduce Your Costs

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

When our children were little, we taught them how to cross the street, brush their teeth and say "please" and "thank you." Many people started the kids doing chores and earning an allowance. We understood that those conversations were part of raising responsible adults.

Then they turned 18.

Somewhere along the way, many parents assumed that talking about money should stop because their children were now adults. Nothing could be further from the truth.

In fact, adulthood is when the most important financial conversations begin.

The American Dream has changed

Today's young adults are navigating a financial landscape unlike any previous generation. Student loan debt, soaring housing costs, rising insurance premiums, inflation, volatile markets and an uncertain job market have changed the traditional path to financial independence.

Many are delaying marriage, homeownership and having children — not because they lack ambition, but because the economics are dramatically different.

What does this all mean? Almost 80% of baby boomers own homes vs only 26% of Generation Zers being able to or choosing that path of homeownership.

And baby boomers are trying to ease their kids' pain (and perhaps creating more pain for themselves) — about 50% of these parents are helping to offset money pressures for their adult children.

Things aren't rosy for any generation

Meanwhile, older parents are facing their own financial realities. Many are working longer than expected, caring for aging parents while helping adult children and worrying whether their retirement savings will last 30 years or more.

In fact, among Americans 65 and older, about one in five is still in the labor force. And many more have odd jobs or are gig workers.

That creates a generation caught in the middle — and a lot of silence.

Silence is not golden

Silence is expensive.

I elevated the topic of teaching kids about money in the 1980s. I have taught families the lessons of finance for decades, and one truth remains constant: Families who talk openly about finances make better decisions together. Those who avoid the subject often create misunderstandings, unrealistic expectations and emotional landmines.

The goal isn't to lecture your adult children. It's to have a conversation between equals.

Start with your own story

Many parents hide financial struggles because they want to protect their children. Others hide financial success because they don't want to create entitlement. Others carry the baggage from when they grew up that the biggest secrets in the household related to money issues.

None of these approaches helps. Adult children benefit from understanding how their parents made financial decisions, overcame setbacks and learned from mistakes.

Tell your offspring about the first house you couldn't afford. The investment that didn't work. The credit card debt you finally paid off. The promotion that changed everything. How you had to take your Social Security early to make ends meet later in life.

Money stories teach lessons that spreadsheets never can.

Be honest about your retirement

One of the biggest misconceptions adult children have is assuming Mom and Dad will always be financially available. They may quietly assume you'll help with a home down payment, pay for grandchildren's education or leave a substantial inheritance.

Those assumptions can create disappointment —or, worse, poor financial decisions — based on deceit.

A healthier conversation sounds like this: "We've worked hard to secure our retirement because we don't ever want to become a financial burden to you."

That's one of the greatest gifts parents can give.

If you plan to help your children financially, explain what that help looks like. Is it a loan? A gift? A one-time opportunity?

What are the expectations? Clarity prevents conflict.

Discuss inheritance before it's necessary

No family enjoys talking about death. But avoiding estate conversations doesn't protect anyone.

Adult children should know:

• Where important documents are located
• Who has financial and healthcare powers of attorney
• Whether there is a will or trust
• Who the executors are
• The family's overall wishes — not necessarily for every dollar, but the overall plan

Surprises after a death rarely strengthen families. Money issues and unclear expectations can tear a family apart. Do you really want that to be your legacy?

Set boundaries without guilt

Many parents continue financially rescuing adult children well into their 30s and 40s. Sometimes that help is appropriate. Sometimes it delays independence.

Before doling out the next pot of money, ask yourself: "Am I solving a temporary problem or creating a permanent dependency?"

Financial assistance should come with conversations, not conditions. Explain why you're helping, how often you're willing to help and what success looks like. Healthy boundaries strengthen relationships.

Respect your kids' financial choices

Your adult children grew up in a different economy. They may prioritize experiences over possessions, rent instead of buy or work remotely instead of climbing a traditional corporate ladder. That doesn't mean they are being financially irresponsible.

Instead of criticizing, ask questions:

• "What made you choose that?"
• "How does that fit into your long-term goals?"

Curiosity builds trust. Judgment shuts conversations down.

The best financial conversations happen long before anyone needs money. Don't wait until there's a medical emergency, job loss, divorce or estate settlement.

Instead, create a family tradition. Have a semiannual "money dinner," where you:

• Review major life changes
• Discuss family goals
• Celebrate financial wins
• Update important documents

Make money as normal to discuss as your vacation plans.

The greatest inheritance

Many parents focus on leaving wealth. I believe our greatest inheritance is wisdom. Money can be spent. But values compound.

If your children inherit confidence, sound judgment, healthy financial habits and the ability to have honest conversations about money, you've already given them something priceless.

The question isn't whether your family should talk about money.

It's whether you'll begin the conversation before life forces you to. Because the families who talk together today are often the families who stay together tomorrow.

Related Content

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• Bubble-Wrapping Our Kids Robbed Them of Resilience. Now What?
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• Inflation Is the New Fixed Expense in Retirement: 5 Things That Actually Work to Address It (and What Doesn't)
• Aging in Place Can Be Bad for Your Health: This Financial Pro's Alternative Is a No-Brainer

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

Most people have never heard of a "mega backdoor Roth" — and that could prove costly, as it can allow some retirement savers with strong cash flow to save more money each year in a tax-free Roth account.

The mega backdoor Roth is a retirement savings strategy that lets some workers — typically high earners who can save more — contribute more to a Roth account than the normal annual Roth IRA or Roth 401(k) deferral limits allow. "It's a way to put tens of thousands of dollars into a Roth account that you wouldn't otherwise be eligible to do," says Tim Steffen, director of advanced planning at Baird.

This strategy is only available to savers in employer-sponsored retirement plans that include key features that permit it. The catch? Not all 401(k) plans are set up to enable savers to take advantage of a mega backdoor Roth.

A mega backdoor Roth is a two-step process

Whether you are eligible for a mega backdoor Roth depends on the specifics of your workplace retirement plan.

"To do a mega backdoor Roth, an employer has to offer two things to their employees," says Steffen.

First, they must allow the saver to make after-tax contributions to the 401(k) plan. This type of contribution allows you to save more than your plan's annual contribution limit for pre-tax or Roth 401(k) contributions.

Second, the employer must have a Roth 401(k) option that allows the saver to make an in-plan Roth conversion or to take in-service withdrawals to facilitate a rollover to a Roth IRA.

"If your employer doesn't allow both of those things, it's a moot point — you're not allowed to do a mega backdoor Roth," says Christian DiRusso, senior financial adviser at Altfest Personal Wealth Management.

Just one in four (24.1%) workplace 401(k) plans administered by Fidelity Investments give savers the ability to make after-tax contributions to the plan, according to the 1Q26 Fidelity retirement analysis. And only half (50.7%) of plans offer in-plan Roth conversions.

Know the contribution limits

So how does the strategy work? Savers in 401(k) and 403(b) plans who have already maxed out their regular contributions can make additional "after-tax" non-Roth contributions to their employer plan and then move, or convert, those dollars into a Roth 401(k) account offered by the employer via an in-plan Roth rollover or a Roth IRA rollover.

While most savers know their basic annual 401(k) contribution limits, many don't realize that the IRS allows far higher total limits when employer matches and after-tax contributions are factored in. Here is a summary of those 2026 limits:

• Under 50: $24,500 regular limit and $72,000 total limit
• Ages 50–59: $32,500 regular limit (with $8,000 catch-up) and $80,000 total limit
• Ages 60–63: $35,750 regular limit (with $11,250 catch-up) and $83,250 total limit

In 2026, for example, the total an individual under 50 can sock away in a workplace plan is $72,000, according to the IRS 415 annual limit rule. Savers 50 and up can contribute up to $80,000, and those 60, 61, 62 or 63 have a total limit of $83,250.

How a mega backdoor Roth works in practice

Here's a simple example of how the strategy works. Say a worker under 50 maxes out her $24,500 401(k) contribution limit and receives a $5,500 matching contribution from her employer. Her total contribution is $30,000, which allows her to contribute an additional $42,000 in after-tax pay to her 401(k), bringing her total contributions to the allowable limit of $72,000. That extra $42,000 in after-tax savings would then be either moved to the employer's Roth 401(k) plan or rolled over into a Roth IRA.

Wall Street dubs it a "mega" backdoor Roth because a regular backdoor Roth, which starts with making a nondeductible traditional IRA contribution and ends with a Roth conversion, has much lower contribution limits than the mega backdoor Roth. The 2026 max for standard IRAs is $7,500 for savers younger than 50 and $8,600 for those 50 and older, which pales in comparison to the $72,000 and $80,000 respective maximum contributions for a mega backdoor Roth.

Keep an eye out for taxes

Be aware of taxes on the conversion, however. "Whether you convert to a Roth IRA or Roth 401(k), you will need to pay taxes on any earnings included in the conversion (you will not generally need to pay taxes on after-tax contributions you convert, as those amounts have already been taxed)," according to Fidelity Investments.

To avoid taxes, convert after-tax contributions to a Roth account as quickly as possible.

Once those after-tax dollars are moved into a Roth account, they accrue all the benefits of a Roth: tax-free growth, tax-free withdrawals, and no required minimum distributions (RMDs), says Tara Lawson, wealth strategist at U.S. Bank Private Wealth Management.

Who should consider a mega backdoor Roth

High earners. This strategy heavily favors high earners who are locked out of regular Roth IRAs due to income limits but who still want to maximize their tax-free savings. It also works for those who have maxed out their ordinary workplace plan, or who simply want to save more in a Roth. "It's a good strategy for people who have extra money to save," says Lawson. "If you're going to do these after-tax contributions, it's going to be over and above your normal contributions to your 401(k)."

Executives. It's a commonly used strategy for corporate executives, CEOs, and small business owners whose 401(k) plans allow for it, personal finance pros say.

Windfall recipients. The mega backdoor Roth strategy could also be a useful tool if you receive a large bonus or a cash windfall outside of work, such as an inheritance, that allows you to forgo a larger portion of your salary and instead put it toward retirement.

Future high-tax retirees. Getting more retirement savings into the tax-free Roth bucket is particularly beneficial for savers who expect to be in a higher tax bracket in retirement than they are now.

Pros and cons of a mega backdoor Roth

Tax diversification. Executing a mega backdoor Roth boosts the tax diversification of retirement accounts, which gives retirees more flexibility when making withdrawals. It's good to have a bucket of Roth money you can tap tax-free, a bucket of traditional 401(k) dollars that gives you a tax deduction in your peak earnings years, and a bucket of taxable brokerage account funds that are taxed at lower long-term capital gains rates ranging from 0% to 20%.

"Tax diversification is certainly an added benefit of the mega backdoor Roth," says DiRusso.

Cash flow issues. However, DiRusso says the strategy is less attractive for lower earners who may run into cash flow problems by committing too much of their pay to fund retirement savings or people who need access to their money in a few years for, say, a down payment on a home, and don't want their money tied up in a tax-deferred retirement account.

"I recommend the strategy to anyone operating with a big cash flow surplus," says DiRusso. "As long [as a mega backdoor Roth] aligns with their long-term goals and they have the cash to support it, it's something we would advise on doing."

Complexity. You may face hefty tax penalties if you fail to follow the proper steps of a mega backdoor. Work with a financial planner or tax expert to avoid pitfalls.

Should you consider a mega backdoor Roth?

If you're interested in doing a mega backdoor Roth, step one is to check whether it is allowed under your 401(k) plan, financial advisers say.

Remember, this powerful tool is only available to people whose 401(k) plans allow it. But if you get the green light and have extra cash to put to work in a Roth account, it's a winning retirement savings strategy.

Read More About Roth Conversions

• Should You Convert a Traditional IRA to a Roth after 60?
• IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
• Quiz: Understanding Roth Conversions

Kevin Warsh is making his first official trip to Capitol Hill since he was sworn in as the 17th chair of the Board of Governors of the Federal Reserve System in May.

The Fed chair will tell Congress the central bank has "no tolerance" for high inflation, and cool June Consumer Price Index (CPI) data offers some momentary relief.

But the ceasefire between the U.S. and Iran is over.

And, less than a month after the June Fed meeting and two weeks before the Federal Open Market Committee (FOMC) gathers for a second time under his leadership, Warsh is being challenged by battles on multiple fronts.

What happens at the Strait of Hormuz is well beyond his control. And he's unlikely to say much about attacks on his authority from both the executive branch and the judicial branch.

But it's probably good for all of us if Warsh is seen to be working with FOMC dissidents to establish credibility with central bank colleagues and other financial market participants and stakeholders.

Those markets had been aggressively pricing in higher interest rates ahead of Warsh's two-day testimony, while even President Donald Trump would say, loudly, that he put his man there to cut the federal funds rate, and fast.

In the long run, Warsh will have to consider how far he'll go to meet White House demands. He already must account for other policy choices, such as using tariffs as a tool of foreign affairs and opting for war in the Middle East.

In the longer run, Warsh will be Fed chair after the expiration of President Trump's second term on January 20, 2029.

At the same time, though the Supreme Court has already said the president can't fire Fed governors "at will," the central bank's power as we currently understand it is under active review.

Things are in the saddle, to borrow from Ralph Waldo Emerson, and they're riding Kevin Warsh.

Let's talk about five conflicts, both literal and figurative, driving the narrative around the not-so-new-anymore Fed chair right now and what they mean for the most important central bank in the world for the long term.

1. Warsh v. Greenspan

Warsh wants to be measured by his ability to manage inflation, and he plans to achieve price stability via the fed funds rate. He reiterated that explicit commitment in remarks prepared for his testimony on July 14.

A "monetarist" at heart, his role model appears to be Alan Greenspan. We'll see what happens, though, when Warsh tries to shrink the Fed's balance sheet.

Reversing what started as "quantitative easing" when Warsh was former Fed Chair Ben Bernanke's right-hand man during the global financial crisis/Great Recession will impact bond prices and interest rates.

The thing to remember about Greenspan is not so much the policy details as the mere presence. He was there when markets required assurance about their continuing ability to function, which is really saying a lot if you think about it.

He also gave cover for policymakers on the fiscal side as their processes grew more and more sclerotic, even if they had no idea what he was talking about.

Bernanke, his immediate successor, understood the ultimate assignment, even if he had to clean up messes Greenspan allowed. So, too, did Janet Yellen, then Jerome Powell.

They also made mistakes along the way, each of them. But the up-and-to-the-right trend continues.

See what I mean?

2. Warsh v. Powell

Warsh's immediate predecessor, Powell, is still a member of the Fed board. The former Fed chair is committed to staying in place until legal threats to the central bank's independence are resolved.

He voted in favor of holding rates steady in June. Monetary policy is still important, but Powell is working for a bigger-picture objective at the same time.

This is about independence, the long term, as Powell said in late April, referring to Trump's lengthy campaign to remove him.

"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policies without taking into consideration political factors," he said. "It is so important for our economy, for the people that we serve, that they can depend, over time, on a central bank that operates that way, free of political influence."

Powell said he wouldn't leave the Fed until an investigation into cost overruns for a project to renovate the central bank's headquarters "is well and truly over with transparency and finality," noting that his decisions "will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve."

3. Warsh v. Waller

This is about inflation and interest rates, the short term, as well as Warsh's wish to limit Fed communications. And Christopher Waller, who was considered a potential successor to Powell, is staking out less totemic territory than the ex-chair.

Indeed, as Neil Dutta of Renaissance Macro writes, remarks Waller delivered on the eve of Warsh's congressional testimony suggest this Fed governor "is laying the groundwork for a hike as soon as the July FOMC meeting."

Waller and his colleagues will certainly welcome cooler-than-forecast June CPI data. But that data is subject to what happens in the Middle East.

So maybe July is not a "live" meeting, during which the FOMC will consider raising the fed funds rate. Dutta says Waller understands something else about central banking in this 21st-century moment:

"Let Waller's speech serve as a reminder that while Warsh might be circumspect around his own views, Waller has no problem letting his views be known," the economist observes. "The information void gets filled by the rest of the committee."

4. U.S. v. Iran

Fiscal policymakers make choices, too.

As long as Iran controls the tempo of the war in the Middle East and to the extent the Islamic Republic manages the Strait of Hormuz come peacetime, the effects of the 2026 energy shock will linger.

Uncertainty about oil and gas prices will undermine the economy, simple as that, the Warsh Fed acknowledged in its brief policy statement in June.

The month-over-month data will be noisy. But softness in year-over-year core inflation data suggests the energy shock is relatively contained, and that's definitely comforting for those who'd like to see lower interest rates.

What's discomfiting is that Iran seems to be able to attack critical energy infrastructure targets whenever it feels the need to assert its will, and the Trump administration's Truth Social diplomacy is not working.

5. Trump v. Cook (and Trump v. Barr)

All three branches are in on this play: On June 29, the Supreme Court said President Trump couldn't fire Fed Governor Lisa Cook, yet.

Writing for the majority in Trump v. Cook (pdf), Chief Justice John Roberts said the Trump administration's interpretation of the law would transform the Fed's for-cause protection into at-will employment.

According to Roberts, that's "an interpretive leap out of step with the statute Congress enacted and our Nation's tradition of central banking protected from political interference."

But Roberts left open the possibility that Trump can remove Cook, pending the Fed governor's case against the president in a lower federal court. "To be clear," the chief justice explained, "the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts."

The same day the Court dropped that decision, Trump promised to "take appropriate action immediately" to remove Cook.

And the Roberts majority opinion includes a footnote that opens up the Fed's regulatory function as an avenue of attack. Two dissents focused on this issue, questioning whether and how this oversight fits within the central bank's monetary policymaking.

Associate Justice Amy Coney Barrett asked, “Do all the Federal Reserve's existing regulatory powers have the requisite connection to monetary policy? If not, are they grandfathered in? And is the Federal Reserve unique, or might history sanction other exceptions too? The court does not say."

So, the question becomes, what is central banking? It's not an active case on the federal docket, but the case to test it could very well be Trump v. Barr.

Former Vice Chair for Supervision Michael Barr led the 2023 Federal Reserve Review into the collapse of Silicon Valley Bank (SVB). His report is currently subject to an independent review.

Though current Vice Chair for Supervision Miki Bowman has said it's not about assigning blame, Barr and other former Fed officials are concerned about the purpose and intent of the independent review, as are Senate Democrats.

Barr's term on the Fed board is set to expire on January 31, 2032.

As Capital Account co-writer Ryan Tracy suggests, the Fed's regulatory powers "seem to be a liability to those concerned about monetary policy independence."

Indeed, Associate Justice Clarence Thomas observed in his dissent that the first two U.S. central banks had no executive authority, but the Fed regulates most of the banking economy.

"The president, therefore, may remove Cook for any reason that he wants and by any procedure that he wants," Thomas concludes.

Related content

• 3 Ways Kevin Warsh Will Change the Fed
• Fed Zeppelin: 5 Songs That Explain the Biggest Central Bank in the World
• June Fed Meeting: Updates and Commentary

Tax planning for executives can look very different from standard financial advice. The reason? Your compensation package likely includes a complex mix of salary, bonuses, company stock and deferred compensation — all of which involve tax considerations.

Last year's One Big Beautiful Bill Act (OBBBA) introduced new "tax traps" specifically targeting the executive suite.

In 2026, a $75,000 bonus could lower your net take-home pay if it triggers the wrong phase-out. At this level, what matters isn't what you earn, but what you keep.

The good news from the OBBBA

The OBBBA resolved much of the uncertainty surrounding the expiration of the Tax Cuts and Jobs Act. For high-income earners, there are a few permanent victories:

• Top-rate stability. The 37% top tax rate is now permanent. Without this legislation, the rate was set to revert to 39.6% in 2026.
• QBI deduction. The 20% qualified business income deduction for pass-through entities (S corps, LLCs, partnerships) no longer has an expiration date.
• Estate exemption. The exemption is $15 million per person ($30 million for married couples) in 2026 and is locked in through 2033.
• Bonus depreciation. 100% first-year bonus depreciation has been restored permanently, allowing for the immediate deduction of business equipment costs.

The tax traps to watch out for

While the wins are significant, several new provisions act as a "stealth tax" on executive income.

1. The SALT phase-out.

The OBBBA raised the state and local tax (SALT) cap to $40,400 for joint filers, but it comes with a catch: It only applies to those with a modified adjusted gross income (MAGI) under $505,000.

Above that, the benefit phases out entirely, reverting to the old $10,000 cap by the time you reach $600,000.

Pro tip: Participation in deferred compensation can reduce current-year taxable income.

2. The 2026 AMT reset.

The alternative minimum tax (AMT) is set to kick in harder this year. For married filers, the exemption resets to $140,000 (down from 2025 levels), and the phase-out rate doubles from 25% to 50%.

If you plan to exercise incentive stock options (ISOs) in 2026, you should run an AMT projection first to avoid an unpleasant tax surprise next April.

3. The charitable "cover charge."

Starting in 2026, charitable contributions face a new floor: You can only deduct gifts that exceed 0.5% of your AGI. On income of $800,000, your first $4,000 in donations provides zero tax benefit.

Strategy: Use bunching. Instead of annual gifts, contribute a larger sum (e.g., $50,000) to a donor-advised fund (DAF) in a single high-income year to clear the floor for a meaningful deduction.

4. The 2/37ths deduction limit.

If you're in the 37% bracket, the OBBBA now caps the value of your itemized deductions at 35 cents on the dollar.

This 2% gap makes above-the-line deductions — such as 401(k) contributions and health savings account (HSA) funding — far more valuable because they reduce your income before this cap is applied.

Equity compensation: Where strategy makes the biggest impact

Company stock is often the largest component of executive pay and the primary source of complexity:

Restricted stock units. RSUs are taxed as ordinary income at vesting. If you have the cash to cover the taxes, holding the shares allows future growth to be taxed at lower long-term capital gains rates.

Stock options. Nonqualified stock options (NQSOs) generate ordinary income at exercise. Incentive stock options (ISOs) offer potential capital gains treatment, but the lower 2026 AMT thresholds make them "riskier" than in years past.

Too often, executives, especially those deemed control persons subject to Section 16 reporting, overconcentrate their wealth in company stock.

In addition, there's often internal pressure from the C-suite for high-level executives of publicly traded companies to retain their stock. This can create difficulties in adequately diversifying one's wealth while still indicating confidence in the company.

Advanced executive moves

To maximize efficiency, executives should look beyond the basic 401(k) limits:

The mega backdoor Roth. If your plan allows for after-tax contributions, you can potentially funnel an additional $47,500 into a Roth 401(k) for 2026 (up to the total $72,000 IRS limit), where it grows tax-free.

The PTET workaround. If you're a small-business owner or have consulting income, the pass-through entity tax (PTET) election allows your business to pay state taxes at the entity level. This bypasses SALT income thresholds and remains a key tax strategy under the OBBB.

Deferred compensation (nonqualified deferred compensation or NQDC). These plans allow you to delay income — and the 37% tax hit — until retirement, when you might be in a lower bracket.

However, they're governed by strict Section 409A rules. One wrong move can trigger a 20% excise tax penalty.

Distribution elections under deferred compensation are critical — it makes sense to consult with an adviser to determine how much to defer and what distribution election is most advantageous.

The bottom line

Most executives leave money on the table because their equity, retirement and charitable strategies aren't managed in concert with one another.

In the OBBBA era, these elements are interconnected. Success requires a coordinated look at how a move in one area changes the math in another.

Related Content

• How High Earners Can Get Through the Income Tax Maze
• Cash Balance Plans: An Expert Guide to the High Earner's Secret Weapon for Retirement
• Should Your Asset Allocation Change When You Retire?
• The Fiduciary Rule Is Gone (Again): Why Your Retirement Safety Net Just Shrank
• This Is How the 'Brady Bunch' Safety Net (aka a QTIP Trust) Protects Your Kids' Inheritance

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

As the saying goes, "You're only as happy as your least-happy child." Any parent or grandparent knows how true that feels.

We may spend a lifetime building financial security, saving for retirement, buying insurance and drafting detailed estate plans. Some families even create spreadsheets spelling out who gets the wedding ring, the family home, the brokerage account, the antique table or the emerald earrings.

All of that planning matters.

But deep down, we do not simply want our children to inherit our assets. We want them to be happy, capable and grounded. That desire is not just emotional — it is deeply human. We are wired not merely to pass on our DNA, but to protect, nurture and help our children thrive.

That is why the greatest legacy we leave may not be financial wealth. It may be what I call "wisdom wealth" — the judgment, values, self-knowledge and purpose that help the next generation use money well and live well.

Financial wealth is what you own. Wisdom wealth is what you have learned.

Financial wealth includes your home, portfolio, retirement accounts, business interests, insurance proceeds and personal property.

Wisdom wealth includes your values, judgment, resilience, faith, gratitude, mistakes, life lessons, decision-making habits and your understanding of what money is actually for.

One can be transferred with documents. The other must be transmitted through lived experience, conversations, examples and intention.

And that is where many families fall short.

The most ignored inheritance

The coming decades will bring one of the largest transfers of wealth in history. Much of that discussion focuses on dollars: Who will inherit, how much they will receive and how taxes can be minimized.

These are important planning questions, but they are not the whole story.

Many families are prepared to transfer assets, but not wisdom.

• Parents may leave behind a well-funded trust, but no explanation of the values that shaped it
• They may leave a brokerage account but never explain how they handled fear during market declines
• They may leave real estate, but never talk about the sacrifice, discipline and patience that made ownership possible

The result is that children may inherit the money without inheriting the mindset that created it. That gap can turn a generous inheritance into confusion, conflict or missed opportunity.

Here are five ways to transfer wisdom wealth while you are still living.

1. Turn family time into wisdom time

In the age of TikTok, Instagram and constant distraction, wisdom is rarely transferred through formal "sit-down talks." It is transferred in ordinary moments, a long walk, a family dinner, a car ride, a vacation, a holiday gathering or a conversation after everyone else has left the room.

One of the most practical things parents and grandparents can do is create recurring time with their adult children and grandchildren. This may mean a combination of weekly dinner, Sunday breakfast, a monthly family gathering or an annual vacation.

Occasions such as birthdays, anniversaries, graduations and promotions are valuable opportunities to get together and celebrate. The tradition matters more than the venue.

Longer trips can be especially powerful. When families travel together, they are removed from daily distractions. Conversations become deeper. Grandchildren see how grandparents make decisions, handle inconvenience, express gratitude, treat strangers and spend money. These experiences often teach more than any planned speech.

If you have the resources, helping pay for these gatherings can bring joy to the entire family and support the transfer of wisdom wealth.

2. Share the stories behind the money

Many children know what their parents own, but not what their parents endured. They may see the house, the portfolio, the business or the retirement account, but not the years of discipline, risk, sacrifice, delayed gratification, mistakes and recovery that created them.

Parents should share the stories behind the wealth. Talk about the first job, the bad investment, the business risk that failed or almost failed, the home you stretched to buy, and the market decline that tested your nerves. Share memories about the period when money was tight, the career decision that changed your life, the opportunity you missed, the mistake you would not repeat.

These stories are not self-promotion. They help the next generation understand that wealth is not magic. It is usually built through compounding, patience, work, judgment, resilience and sometimes luck.

Do not share only victories. Share failures, heartbreaks and the difficulty of accepting what you could not control. In many families, children inherit a sanitized and polished version of their parents' lives. But wisdom often comes from the real and unpolished chapters — the moments of fear, regret, humility and growth.

A child who understands how you stood back up after a mistake is far better prepared to stand back up after their own.

3. Create a family investment conversation

One practical way to transfer wisdom wealth is to involve children in real financial decisions early, long before they inherit significant assets.

Parents can help children fund investment accounts and discuss the difference between saving and investing. They can explain why diversification matters, review basic asset allocation and talk about how emotions affect decisions during market declines.

These investments can open the door to important life and money lessons. Why did the portfolio rise or fall? Why avoid panic selling? How do taxes and risk affect long-term returns? How do you balance enjoying life today with preparing for tomorrow? How much to save and how much to give?

The purpose is not to make children investment experts. It is to deepen relationships, enhance financial literacy and help them build a calm, informed relationship with money before they are responsible for larger sums.

4. Help them build real-life capability

Financial help can be generous, but it is most powerful when it builds capability.

Helping an adult child buy a first home can be more than a gift. It can become a lesson in budgeting, mortgage payments, property taxes, insurance, maintenance, neighborhood selection and the discipline of ownership.

Helping with education can include conversations about career choice, debt, income potential and purpose. Helping with a business idea can include discussion of risk, cash flow, customers, failure and persistence.

The key is to pair financial support with financial education and a deeper relationship. Instead of simply writing a check, explain the thinking behind the help. What is the purpose? What responsibility comes with it?

The goal is not dependency. The goal is capability, the confidence to make good decisions long after your help is no longer needed.

5. Explain how and why your beliefs and values have evolved

Most of us do not see the world at 60 the same way we saw it at 30. Our views about success, money, marriage, parenting, faith, health, ambition, status, generosity and happiness often change through experience, but many parents never explain that evolution to their children.

Tell them what you once believed and what life taught you.

• Maybe you once thought success meant income, but later realized it also required health and relationships
• Maybe you once chased status, but now value peace
• Maybe you once feared risk, but learned that some risks are necessary
• Or perhaps your faith, gratitude or sense of purpose has shifted or deepened through hardship

These conversations give children something more valuable than advice. They give them perspective.

Wisdom wealth is not the claim that parents have all the answers. It is the humility to say: "Here is what I learned. Here is where I was wrong. Here is what mattered more than I expected. Here is what I hope you discover earlier than I did."

The best legacy is more than money

A good estate plan can transfer assets efficiently. A good family legacy can transfer values, judgment and purpose. Both matter.

But if we leave our children money without wisdom, we may leave them resources without direction.

Financial wealth can change a child's balance sheet. Wisdom wealth can help guide them toward a joyful, meaningful life supported by financial security.

Your children may inherit your financial wealth. The deeper question is whether they will also inherit your wisdom wealth.

To learn more about legacy, personal transformation and other related topics, you can order my new book (out today!), The Wisdom and Wealth Solution.

Related Content

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

I picked up Strangers: A Memoir of Marriage by Belle Burden expecting a juicy divorce memoir. What I got was a thoughtful, sometimes uncomfortable look at how a marriage can unravel so gradually that, by the end, the person you've shared your life with feels almost unrecognizable.

Burden's memoir has all the ingredients of a page-turner: Wealth, privilege, beautiful homes, family dynamics, betrayal and a divorce that becomes increasingly contentious.

More than once, I found myself staying up later than I should have, telling myself I'd read just one more chapter.

As a financial adviser, however, I found myself reacting to different parts of the story than most readers probably would.

At one point, I wanted to reach through the pages and yell, "No! Do not take your money out of your separate property trust and put it into a jointly owned home!"

That's what made the book so compelling to me. Beneath the story of a marriage ending was another story unfolding quietly in the background: The financial decisions being made along the way.

The danger of disengaging with your finances

Burden's story reminded me how easy it is for intelligent, capable people to become passive participants in their financial lives. Not because they lack the ability to understand money, but because life is busy.

Careers demand attention. Children need to be raised. Marriages operate on trust. One spouse naturally takes the lead in certain areas, and before long, financial decisions become something that simply happens in the background — often brushed aside with a comment like, "This is all too complicated for you to understand, anyway."

Most of the time, that arrangement works just fine … until circumstances change.

The reality is that many of the financial pitfalls people encounter aren't obvious. Few people wake up worrying about how property is titled, whether inherited assets have been properly protected, whether a prenuptial agreement still reflects their current situation, or whether beneficiary designations are consistent with their wishes.

Yet these are precisely the kinds of issues that can have life-changing consequences.

What makes Strangers particularly powerful is that Burden doesn't portray herself as a victim of circumstance. Near the end of the book, she reflects on a series of decisions involving her prenuptial agreement, property ownership and her level of involvement in the family's financial affairs.

Reading those reflections, I found myself thinking less about the divorce itself and more about the dozens of moments along the way when a different conversation, a second opinion or a deeper understanding of the financial implications might have altered the outcome.

That's a lesson I see play out frequently in my profession.

Many people assume the greatest financial risks they face involve the stock market. They worry about whether they should buy a particular fund, invest in international stocks or wait for a market correction.

In reality, some of the most consequential financial decisions have little to do with investing. They happen when we sign legal documents we don't fully understand, make changes to ownership structures, neglect to update estate plans or assume someone else is paying attention to details that affect our future.

The value of expert financial advice

This is one of the reasons I believe comprehensive financial planning is so valuable. A good financial adviser doesn't simply manage investments. They help clients identify risks they may not even realize exist.

Sometimes the most important question in a planning meeting isn't, "What should I do?" but rather, "What haven't I thought about?"

And yes, you can use AI chatbots to answer questions, but you need to know what to ask them.

An experienced adviser, however, can prompt the questions that haven't yet occurred to you:

• What happens if circumstances change?
• Does this legal agreement still reflect our intentions?
• Have we unintentionally exposed assets we meant to protect?
• Is the financial structure of our lives still aligned with the reality of our lives?

Those aren't questions most people ask regularly. They're certainly not questions people ask when they're in love. Yet they're often the questions that matter most.

The power of staying engaged

That's ultimately the financial lesson I took away from Strangers. Burden's story is deeply personal, and every marriage is different. But her reflections serve as a reminder that financial security isn't created by avoiding difficult conversations. It's created by having them early, revisiting them often and staying engaged in the decisions that shape your future.

By the end of the book, I wasn't thinking about the divorce anymore.

I was thinking about all the people sitting across from me every year who assume nothing will change.

Most of the time, they're right.

The problem is not planning for the possibility that they're wrong.

Related Content

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• Estate Planning for Women: Married, Single or Divorced

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

While anxious eyes watch oil prices and inflation indexes, the best news for savers and income investors is hiding in the bunker often called the belly of the yield curve. So far in 2026 through the start of June, two-year Treasury yields have leapt from 3.46% to 4.01%, and three-year yields from 3.53% to 4.06%.

At the same time, despite chatter about inflation pushing up interest rates at the long end, these show gentler climbs, with 30-year T-bonds crawling from 4.86% to 4.97%. This tells us traders anticipate the surge in inflation to persist through 2029, then recede toward the Federal Reserve’s 2% target.

It also means savers and short-term-bond collectors have it better than long-term-bond investors. If yields climb, risk to principal and likely lost opportunities do not justify locking in 5% or 5.25% for a decade or longer. (Prices and yields move in opposite directions.) No wonder inflows to short and ultra-short bond funds are soaring. Where to best position your money on the yield curve is rarely so clear-cut. Read on for tips on minimizing costs and to see opportunities for extra marginal yield.

The easiest path to higher yields

The simplest and least costly approach is to accumulate short notes and bonds directly, either using the Treasury Direct website or a brokerage account. This is a freebie if you have cash reposing in, say, a Fidelity brokerage money market account currently paying 3.33%.

Switching to two-year 4.0% T-notes means for every $10,000, you see an extra $67 a year — enough to notice — assuming you keep the principal until maturity. There are also my favorite full-faith-and-credit federal agency notes, such as the Federal National Mortgage Association’s 4.3% notes due in May 2028. Unless you will need the money before maturity, this is sweet.

Banks usually offer a tad more on certificates of deposit, and there is also no cost.

Shop at a bank-rate site, or see if your brokerage posts CD rates noticeably higher than the Treasury pays. Fidelity, with the 3.33% money fund, lists 3.90% for various 90-day CDs and slightly upward of 4% for a ladder of six-, 12-, 18- and 24-month bank deposits. I am not a fan of longer-dated CDs because they do not pay suitably higher rates.

You can also shop for and compare the best CD rates using this Bankrate tool:

Tactical ways to earn higher yields

To angle for still higher income with equally short maturities, you will bear some expenses, but they can be trivial. I generally endorse short-dated defined-maturity corporate bond funds; Vanguard’s new suite of these charges 0.08% in fees and includes Vanguard Target Maturity 2028 Corporate Bond (symbol VBCB), an exchange-traded fund whose portfolio is valued to yield 4.50% to maturity; the fund terminates in December 2028.

That is long enough for a defined-maturity fund. The yield to maturity on a similar Vanguard fund slated to end in 2035 is just 5.25%.

Another higher-yield idea in the belly is a high-yield bond fund with a pile of bonds due to mature in a couple of years. This is a face-off between the established PGIM Short Duration High Yield ETF (PSH) and newcomer Columbia Short Duration High Yield ETF (HYSD).

Both are actively managed (which matters in high yield), charge low enough expenses (between 0.4% and 0.5%) and distribute close to 6% — more than enough to absorb the cost. There is little to gain now entering a long-term high-yield fund, though if you hold any with embedded unrealized gains, leave it be. You have done extremely well.

Again, if I have written zero that you do not already know, at least accept my affirmation that when every half percentage point matters, you can get it safely and effortlessly and at minimal cost. Banks and fund companies are not always your friends, but in the area of inexpensive short-term cash alternatives, they are worthy partners.

A financial advisor can help you build a strategy for saving, investing and reaching your long-term goals. Use the tool below to find an adviser who can help.

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

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One of the most interesting — and truly dramatic — highways in Southern California lies due north of Los Angeles. Known as The Grapevine, it is a steep, winding, five-mile section of Interstate 5 that goes through the Tehachapi Mountains, rising more than 4,000 feet via the Tejon Pass.

While not apparent at first glance, there are several small communities along the route.

In one of them, two neighbors were locked in a struggle over the refusal of one to recognize that an "implied easement" had been established nearly 30 years ago. Similar legal issues go back — way back — to Ancient Rome and the English common law brought to America in which the basic principles of using a neighbor's property without a written deed were established.

A paradise … until he moved in

In the small mountain community, longtime readers "Jill" and her husband, "Ricky," live in a mobile home on Lot A, which they bought from "Sally" more than 20 years ago. Sally had owned that land and the adjacent parcel, Lot B, for many years. Initially, she rented out a mobile home on Lot B, but she recently sold the lot to "Matthew."

A driveway is located between Lots A and B, with a portion of it on Lot B. For more than 30 years, Sally and all her tenants, including Jill and Ricky, either walked or drove across that Lot B portion to reach the nearest road.

Aside from a forested, 45-degree downward slope that is impossible to safely walk down or drive over, there is no other practical way to reach the nearest road. In other words, without access to that portion of the driveway on Lot B, Lot A would be landlocked.

"This wonderful place was a little paradise for everyone in the area until six months ago, when Matthew became our next-door neighbor," Jill said. "Overnight, our lives became a living nightmare with his behavior."

'You are using my property without permission'

Matthew became the neighbor from hell. He'd pound on their door and send them nasty texts, demanding to be paid $16,000 for their use of his driveway.

In addition to other assorted threats that I read in his texts, he threatened to lock a gate between the two lots, which would prevent the couple from leaving their property.

I had several telephone conversations with him, and the expression "as stubborn as a mule" fit Matthew, though I would say he was as stubborn as an entire barn of mules.

Given the facts and history of usage of that driveway, in my legal opinion, he didn't have a chance of collecting 1 cent from them.

Of course, the legal question boils down to this: Could he charge them anything for walking or driving over that small section of driveway that is, indeed, located on his property?

I referred my readers to Bakersfield, California, real estate attorney Fawn Dessy, who answered that question with two words: "Absolutely not!"

Creation of an implied easement

"This common situation in rural areas gives rise to what we call an implied easement," Dessy said.

She cited a classic definition that law students never forget: An implied easement is found when a property owner was previously using one part of their land to benefit another part and then divides and sells the parcels. Its use legally continues. It is usually not written in a deed but is recognized since it is based on prior use of the land.

Dessy listed the specific legal requirements to establish an implied easement:

• Common ownership. Both the parcels must have originally been owned by a single person or entity.
• Severance. The parcels must have been separated through, typically, a sale.
• Apparent and continuous use. Before the parcels were split, the use was visible, obvious and ongoing.
• Reasonable necessity. The easement must be reasonably necessary for the occupants on the parcel that is benefited by its use, such as getting to and from a highway.

Dessy's letter to Matthew

Dessy sent a polite, yet no-nonsense, letter to Matthew, citing controlling cases and urging him to take no actions that would in any way harm my readers.

Over the next few days, Matthew and I had reasonably pleasant telephone conversations in which I tried to reason with someone whose mind was made up, regardless of the facts. Then a question occurred to me: Had he been aware of that easement before buying Lot B? Did the information appear in the listing and sale agreements?

If it wasn't obvious to him or in the sales documentation — or he simply did not know of it — he would likely have a claim against the real estate agent who handled the transaction.

While it would require an appraiser to determine how much he overpaid, if any amount at all, for a lot subject to the implied easement, if he really wanted to pursue the matter, that would be his best bet.

So, I called him and asked, "Was the easement mentioned in the real estate sales agreements?"

At first, he did not directly reply, and then he said, "Beaver, I got Attorney Dessy's letter. Tell them they can continue using the driveway, as before. I'm done fighting. And, no, the easement was not disclosed in the actual sales documents. But the seller told me about it."

So he'd known about it all along. He'd been after a cash grab, punctuated by threats, bullying and name-calling.

I gave the good news to my readers that he was dropping his claim. The couple emailed me, "Mr. Beaver, Paradise has returned to our little corner of the world."

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

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

Retirement readiness is rarely a feeling. It's a numbers game. Yet many Americans approaching retirement age struggle with a nagging sense of uncertainty, even when their financial house is in order.

According to NerdWallet research, only 23% of Americans evaluated their progress toward retirement savings goals in the past year, leaving the vast majority in the dark about where they stand.

The disconnect between financial reality and emotional confidence is more common than you might think. Vanguard's 2025 Retirement Outlook found that more than four in 10 Americans are on track to maintain their lifestyle in retirement yet many of these same individuals express doubt about their preparedness.

I'm a financial planner with nearly two decades of experience, and if you've been questioning whether you can afford to leave the workforce, these seven concrete indicators suggest you might be more ready than you realize.

1. Your retirement savings meet or exceed age-based benchmarks

Financial planners use age-based milestones to gauge retirement readiness. Fidelity recommends saving 10 times your annual income by age 67, with incremental goals along the way: One times your salary by 30, three times by 40, six times by 50 and eight times by 60.

If you've met or exceeded these benchmarks, you're likely in strong shape. These guidelines account for a retirement lifestyle that maintains your pre-retirement standard of living, assuming you'll need 70% to 80% of your preretirement income annually.

2. You have multiple income streams in place

Financial experts consistently point to diversified income as a hallmark of retirement readiness. Relying solely on Social Security or a single pension creates vulnerability to policy changes or plan failures.

Strong candidates for retirement typically have three or more income sources: Social Security benefits, retirement account distributions (401(k)s, IRAs, Roth IRAs) and potentially pension income, rental property revenue or part-time work.

This diversification provides both financial security and flexibility to adjust withdrawal strategies based on market conditions and tax planning opportunities.

3. Your debt is eliminated or manageable

Carrying significant debt into retirement dramatically increases the income you'll need to maintain your lifestyle. Most financial advisers recommend entering retirement either debt-free or with only low-interest, manageable debt remaining.

If you've paid off your mortgage (or will within the first few years of retirement) and carry no high-interest credit card balances, you've cleared one of the most significant obstacles to retirement security.

The exception: Strategic debt like a low-rate mortgage that allows you to keep more funds invested might make sense depending on your tax situation and investment returns.

4. You've stress-tested your retirement budget

Wishful thinking has no place in retirement planning. If you've created a detailed retirement budget that accounts for essential expenses (housing, healthcare, food, insurance) and discretionary spending (travel, hobbies, entertainment) and your projected income covers these costs with a buffer, you're demonstrating the kind of preparation that indicates true readiness.

Financial planners suggest running multiple scenarios: One for your expected lifestyle, one for a reduced spending scenario if markets underperform and one for increased healthcare costs or other contingencies.

If your retirement income comfortably covers your baseline expenses across multiple scenarios, you're likely ready.

5. Your healthcare strategy is funded and understood

Healthcare represents one of the largest and most unpredictable retirement expenses. If you're under 65, the gap between retirement and Medicare eligibility requires a solid plan, whether that's COBRA coverage, marketplace insurance or a spouse's employer plan.

Research shows that financially prepared retirees have not only identified their healthcare coverage strategy but have also funded it. This includes understanding Medicare parts A, B, D and potential Medigap or Medicare Advantage coverage, plus maintaining an emergency fund specifically for out-of-pocket medical expenses.

If you've modeled healthcare costs into your retirement budget and have a clear coverage plan, this uncertainty is behind you.

6. Your portfolio is positioned for distribution, not just accumulation

The shift from saving to spending requires a different investment approach. If you've worked with an adviser to restructure your portfolio for retirement (creating a more conservative allocation, establishing a withdrawal strategy and potentially creating a bucket approach with short-term cash reserves), you've done the strategic work that separates hopeful retirees from prepared ones.

This includes understanding the tax implications of your withdrawal strategy. Smart retirees consider which accounts to tap first (taxable, tax-deferred or tax-free) to minimize lifetime tax liability and avoid pushing themselves into higher brackets or triggering additional Medicare premiums.

7. You can articulate your Social Security strategy

Social Security claiming decisions have lifetime implications, yet many people approach this choice casually. If you've analyzed your break-even points, considered spousal benefits and survivor benefits, and made a deliberate decision about when to claim (whether at age 62, full retirement age, or age 70), you're exhibiting the kind of strategic thinking that characterizes successful retirees.

Delaying Social Security until age 70 increases benefits by roughly 8% per year after full retirement age, a guaranteed return that's difficult to replicate elsewhere. Understanding this trade-off and how it fits your overall income plan is a sign of readiness.

The confidence gap

If you've checked most or all these boxes but still feel uncertain, you're not alone. The psychological transition to retirement often lags the financial reality. Consider working with a financial adviser to run a comprehensive retirement analysis, which can provide objective validation of your preparedness.

Remember that retirement readiness isn't about achieving perfection. It's about having sufficient resources to maintain your desired lifestyle with acceptable risk.

Vanguard's research shows that younger generations are on track to be better prepared for retirement than current retirees, thanks to improved access to workplace retirement plans and stronger plan design.

The question isn't whether you feel ready. It's whether your numbers say you're ready. If the financial indicators are in place, your hesitation might be the natural anxiety that comes with a major life transition, not a reflection of insufficient preparation.

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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.

One of the most common questions I hear from clients approaching retirement is also one of the most emotionally loaded: "Should I pay off my mortgage before I stop working?"

The honest answer is: Sometimes.

That's not a cop-out. It's the only answer that respects both sides of this decision.

Paying off a mortgage is not just a math problem. It's a cash-flow problem, a tax problem, an investment problem — and, for a lot of people, a peace-of-mind problem.

The mistake is assuming there's one universal rule. There isn't. The right answer for a homeowner carrying a 2.875% mortgage, a solid brokerage account and a reliable pension looks very different from the one facing someone with a 6.5% loan heading into heavy IRA withdrawals.

Two recent changes make the math worth revisiting.

• Freddie Mac's weekly survey puts the average 30-year fixed rate at 6.51% as of late May 2026.
• The SALT deduction cap increased to $40,000 under the One Big Beautiful Bill Act, with phaseouts starting above $500,000 in modified adjusted gross income.

Both shift the calculus for retirees in ways that weren't in play two years ago.

Start with where you are in your mortgage

By the time most clients ask this question, they're in the last quarter or third of their loans. That matters more than people realize.

Early in a mortgage, your payment is mostly interest. Later, it flips — you're paying far more principal than interest. The amount of interest you'd avoid by paying off early is probably smaller than you expect.

Here's a concrete example. Take a married couple with an original $350,000 mortgage at 6.5% and $111,000 still owed at year 26. Their annual payment runs about $26,547, but only $6,767 of that is interest. The total interest remaining in the next four years is roughly $19,670.

Compare that with the cost of paying off the loan by pulling from retirement accounts. Assuming a 24% federal bracket and 5% state tax, they'd need to withdraw approximately $140,845 to net the $111,000 after taxes, generating about $7,042 in state taxes and $33,802 in federal taxes.

That's more than $40,000 in taxes to eliminate $19,670 in interest. The numbers don't hold up.

The SALT change and why your state tax burden matters

For years, the $10,000 SALT cap made itemizing difficult for most homeowners. The new $40,000 limit changes that, particularly in higher-tax states such as Connecticut, New York or California.

At our firm, a large share of clients come from Connecticut, and this is the kind of question in which having accountants on staff pays off. The answer depends on whether you're itemizing, which depends on your full tax picture.

If you can now itemize under the new cap, your mortgage interest carries more federal tax value. That doesn't automatically mean you should keep the mortgage. It means you should compare your mortgage rate with your investment returns on an after-tax basis, not gross.

Don't drain your liquidity to feel debt-free

This is where a spreadsheet can mislead you.

Say you owe $300,000 and have $350,000 in taxable savings. Paying off the loan might feel like the right move. But if it leaves you with $50,000 outside your retirement accounts, you've traded one risk for another.

Retirees need accessible cash for home repairs, health costs, long-term care planning, tax bills, and market downturns. If paying off the mortgage means pulling more aggressively from IRAs later, you could end up with higher taxable income, steeper Medicare premiums and more of your Social Security subject to tax.

A paid-off house is comforting. But you can't spend your kitchen.

A practical framework for making the call

If your mortgage rate is below 4%, you're taking the standard deduction, and your portfolio is diversified, keeping the mortgage often makes more financial sense.

If your rate is above 6%, you get little or no tax benefit from the interest deduction, and if you have enough liquid assets remaining after payoff, paying it down becomes more compelling.

If you're somewhere in between, run four numbers before deciding:

• The after-tax cost of your mortgage (not the stated rate)
• Realistic after-tax portfolio return expectations
• Remaining liquidity after payoff
• The tax bill from withdrawing retirement funds to make the payoff

The best retirement decisions come from coordinating taxes, income and investments together. A mortgage decision is no different.

The real answer isn't "always pay it off" or "always stay invested." It's: Pay it off when the numbers work, your cash reserves stay healthy, and the peace-of-mind benefit is genuinely worth what you might be giving up.

Sometimes it is. And sometimes the spreadsheet makes that clear before your gut does.

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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.

Company stock can become one of the largest sources of wealth you'll ever accumulate.

Research from the National Center for Employee Ownership found that employees participating in stock ownership programs accumulated more than double the retirement savings of the average American, underscoring just how powerful equity compensation can be in building long-term wealth and financial independence.

But equity compensation can also quietly become a financial landmine if you don't fully understand how it works.

Without proper planning, you could face massive surprise tax bills, costly alternative minimum tax (AMT) liabilities, underpayment penalties or even pay taxes on wealth that later disappears in a market decline.

You can also become dangerously overconcentrated in your employer's stock, leaving both your paycheck and your investment portfolio exposed to the same company risk.

By the time many employees realize they have a problem, the damage is often already done.

Why equity compensation feels so confusing

You might receive restricted stock units (RSUs), stock options, employee stock purchase plans (ESPPs) or some combination of all three, and many high earners naturally assume they're taxed and managed the same way.

They're not. That confusion can become incredibly expensive.

• RSUs are company shares granted to you over time that become taxable as ordinary income once they vest. When an RSU vests, it means the stock officially becomes yours, and you can keep or sell it.
• Stock options give you the chance to buy company shares later at a price that's locked in today. If the company's stock price goes up, you can buy the shares at the lower locked-in price and potentially profit from the difference. Exercising your options means choosing to buy the shares using that special price.
• ESPPs allow you to buy company stock at a discount, often through payroll deductions.

Each type of equity compensation follows different tax rules, different vesting schedules and different planning opportunities. In some cases, taxes are triggered when shares vest. In others, taxes are triggered when you exercise options or sell stock.

You might not fully realize when those taxable events occur until you're staring at a shocking tax bill.

Once you layer in bonuses, deferred compensation, investment income and potentially multiple state tax filings, it's understandable that confusion can happen.

The tax bill that no one saw coming

One of the biggest mistakes employees make is assuming their company already withheld enough taxes.

In reality, many companies only withhold federal taxes on RSUs and stock option profits at a flat 22% rate, even if your actual tax bracket is 24%, 32%, 35% or 37%. That doesn't include state taxes, city taxes, Medicare taxes, or Social Security taxes.

That gap can quietly snowball into a massive surprise tax bill when April arrives.

Imagine receiving a large vesting event, celebrating what feels like a major financial win, only to later discover you owe the IRS hundreds of thousands of dollars you never planned for.

I recently worked with a senior executive whose RSUs vested during the same year she received a large bonus and significant deferred-compensation payouts. She assumed the taxes had already been handled automatically by her employer. They had not.

When we ran projections before year-end, we discovered she faced a six-figure tax shortfall. Had she waited until tax filing season to discover the problem, she could also have faced underpayment penalties.

The double taxation trap

Another surprisingly common mistake happens after employees sell their company shares.

Many employees don't realize they paid ordinary income taxes on RSUs when the shares vested because that income was already included on their W-2. Later, when the stock is sold, brokerage tax forms can sometimes make it appear that the full value of the sale is taxable all over again.

If your tax return isn't handled properly, you can accidentally pay taxes twice on the same money.

For high earners with large stock grants, this mistake can cost tens or hundreds of thousands of dollars.

When wealth becomes overconcentrated

Taxes aren't the only danger.

One of the biggest risks with company stock is emotional attachment. After years of working at a company, it's natural to feel loyal to the shares that helped build your wealth and career. But that emotional connection is dangerous.

Morgan spent decades building what she believed was a secure financial future through company stock and stock options. Over the years, her holdings grew to nearly $5 million. The shares represented years of hard work, promotions, long nights and professional success.

Like many longtime employees, she genuinely believed the company's best years were still ahead. Then everything started to unravel.

A major product recall triggered lawsuits. Earnings weakened. Headlines became increasingly negative. Employees watched the stock fall day after day while leadership struggled to calm investors.

Shareholders ultimately received only about 6 cents on the dollar in a corporate buyout. Her nearly $5 million position collapsed to roughly $300,000.

In a matter of months, both her career and the wealth she had spent decades building disappeared almost simultaneously.

Turning equity into long-term wealth

RSUs, stock options and ESPPs can either become one of the greatest wealth-building opportunities of your career or one of your biggest financial mistakes.

The employees who handle equity compensation most successfully are usually not the ones obsessing about the next stock surge or trying to perfectly time the market. They're the ones who proactively manage taxes, diversify before risk becomes dangerous and treat company stock as the major financial asset it truly is.

The damage is often already done by the time you realize you have an equity-compensation problem.

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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.

With summer temperatures skyrocketing nationwide and utility bills climbing right along with them, the fresh air and vibrant seasonal climate of Oregon might look better than ever.

Offering a high-quality, outdoorsy lifestyle with an overall lower cost of living than California prices, the Beaver State is known for balancing eclectic urban hubs like Portland with famously green, eco-conscious cities like Eugene and Corvallis.

But Oregon's appeal goes far beyond city limits; the state's tax structure is also friendly in a few ways. For starters, there is no state sales tax, meaning you generally avoid standard add-on taxes at checkout for items like clothing and groceries. Plus, Oregon enforces a state property tax cap that limits the growth of a property's assessed value (though local approvals may still apply).

So if you're ready to live in Oregon without draining your savings, here are the ten cheapest places to look.

Cheapest places to live in Oregon

After ranking property tax bills from highest to lowest per county in Oregon, one thing’s for sure: Rural areas win out. You can generally find more affordable living in the countryside than in the hustle and bustle of a big city.

But if you're ready to visit sweeping mountainscapes, archaeological digs, and relax in natural hot springs (and maybe want to commute for other enjoyments), check out these cheap places to live in Oregon.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Oregon to live.

Harney County

Median property tax bill: $1,943

Median home price: $242,100

Home prices are relatively affordable in Harney County compared to the rest of the state, with the median sitting just over $242,000. Property tax bills are also comparatively reasonable, sliding in just under $1,950 per year according to the latest data from the Tax Foundation.

Outdoor adventurers enjoy exploring more than 10,000 square miles of Harney, the largest county in Oregon. The area is famous for its rugged, high-desert landscapes, including Steens Mountain — which features a scenic loop that climbs over 9,700 feet above sea level, winding past deep glacial canyons and wild horse pastures.

Residents also enjoy wind sailing, land paddling, or flying kites across the super-flat, cracked earth of the Alvord Desert Playa, or going for a relaxing soak in the natural mineral waters of Crane Hot Springs.

And if you're drawn to unique geology and birdwatching, Harney's Diamond Craters Outstanding Natural Area is one of the most volcanically diverse landscapes in the U.S., packed with distinctly shaped lava cones and craters. The Malheur National Wildlife Refuge also provides plenty of opportunities to spot bald eagles, sandhill cranes, and trumpeter swans.

Come to Harney County for the (more) accessible property tax bill, but stay for the wide-open rural charm of it all.

Gilliam County

Median property tax bill: $1,904

Median home price: $189,300

Gilliam County has the most affordable homes on our list, with a median price sitting around $189,300. Located just under three hours east of Portland, the county's median property taxes are also remarkably low, coming in barely over $1,900 per year according to the U.S. Census Bureau.

If you're looking for uncrowded spaces on a dime in Oregon, Gilliam has you covered. As the third-least populated county in the Beaver State, the area offers an authentic blend of small-town living and outdoor recreation.

Year-round, anglers can cast a line for steelhead and bass fishing on the free-flowing John Day River. Alternatively, water lovers may also head up to the Port of Arlington along the Columbia River for paddleboarding and wind-propelled watersports.

And from May to October, residents can dive into the region's deep frontier roots by visiting the Gilliam County Historical Museum in Condon. This historic site highlights 11 historic buildings, including one original 1884 homestead.

So whether you're looking to protect your wallet from the Pacific Northwest's higher cost of living or want to secure some true peace and quiet away from metro areas, Gilliam might just be the option for your family.

Douglas County

Median property tax bill: $1,895

Median home price: $310,300

Homes in Douglas are priced slightly higher than those in other areas on our list, with a median value over $310,000. However, because the county has an effective property tax rate below the national average, the median property tax bill remains under $1,900, according to 2026 Tax Foundation data.

Beyond the numbers, Douglas County offers a high quality of life for foodies. The Umpqua Valley area, known for its rolling orchards and award-winning vineyards, is a local hotspot. And after enjoying a glass, residents can head over to the Dean Creek Elk Viewing Area to watch Roosevelt elk grazing in the open pastures, or visit the region's natural hot springs for a relaxing soak.

Animal lovers are also in for a treat with the Wildlife Safari in Winston. This drive-through animal park allows you to see ostriches, zebras, and other wildlife from the comfort of your own car.

Stop by Douglas County, Oregon, for the rich culture and conservation efforts, but stay to savor the surprisingly manageable property tax bill.

Wheeler County

Median property tax bill: $1,893

Median home price: $272,400

Wheeler is the least-populated county in Oregon, with just around 1,450 people living within its boundaries, according to the U.S. Census Bureau. Reflecting its quiet, rural footprint, the county features a highly affordable median property tax bill of $1,893. Home prices are similarly affordable in the state, with the median value at $272,400, according to the Tax Foundation.

Promoted as a "geologic wonderland," Wheeler sits atop a treasure trove of prehistoric fossils. The county seat, aptly named Fossil, has a public dig site located right on the grounds of Wheeler High School. For a small donation that supports local school programs, it is one of the few places in the nation where the public can dig up authentic 33-million-year-old plant fossils.

Families also love exploring Painted Hills, where stunning, saturated stripes of red and gold clay make the landscape look like giant canvas paintings. And when you're ready to transition back to the present day, the county still offers a rich collection of pastimes like river fishing, mountain camping, and a summer rodeo event.

Check out Wheeler if you're hunting for a unique family destination — and you might just fall in love with the natural history and budget-friendly lifestyle.

Malheur County

Median property tax bill: $1,860

Median home price: $248,900

Nestled along the Idaho and Nevada borders lies Malheur County, home to a relatively low median property tax bill of around $1,860. Prospective buyers will also find that home prices are highly affordable compared to the rest of Oregon, with the countywide median sitting at about $248,900 according to the U.S. Census Bureau.

Oregon Trail enthusiasts and history buffs might become smitten with the region. The historic city of Vale displays deeply carved, authentic wagon ruts left behind by pioneers during the Great Westward Expansion.

The county's high-desert backyard is also full of natural hot springs, excellent boating and camping opportunities, and the famous "Pillars of Rome" — a series of majestic, 100-foot-tall clay cliffs that tower over the town of Rome.

To top it all off, the county is home to the grand Owyhee Canyonlands. This piece of remote wilderness has volcanic rock spires, red-rock chasms, and whitewater rafting, earning it the nickname "The Grand Canyon of Oregon."

Visit Malheur County to explore the rugged wonders of Oregon's hidden "canyon country," and maybe make a home for the affordable property tax bill.

Curry County

Median property tax bill: $1,841

Median home price: $381,300

Curry County has the highest median home price on our list at over $381,000, according to the latest data from the Tax Foundation. But despite carrying higher real estate prices, the median annual property tax bill sits very low at $1,841. This is because the county boasts the lowest effective property tax rate listed here at only 0.50% — well below the national average of .90%.

Home prices sit higher in Curry County because of its coveted location along the southern Oregon coast. Dramatic ocean cliffs give way to expansive sandy shorelines like Gold Beach, where salmon fishing and river jet boat tours are a regular part of local life.

Residents also enjoy beachcombing and tidepooling at Harris Beach State Park to search for colorful starfish, or hunting for rare sea agates along the shores of Port Orford's Agate Beach.

For the avid seafarer, outdoor adventurer, or anyone who simply dreams of waking up to the Pacific Ocean views, Curry may help you to secure a slice of coastal paradise without being weighed down by a heavy property tax burden.

Klamath County

Median property tax bill: $1,752

Median home price: $280,400

Home prices can be quite low in Klamath County compared to other major regions of Oregon, with a median price tag of only $280,400. Annual property tax bills can also be relatively cheap (about $1,752) according to the latest U.S. Census Bureau data. While it may not be the absolute lowest-priced entry on our list, Klamath has lower property tax bills than most surrounding counties.

Located just an hour and a half east of Medford, Klamath offers plenty to do. One shining feature is Crater Lake National Park — Oregon's only national park, formed by a gigantic, collapsed volcano that now contains the deepest, clearest lake in the U.S.. Residents can drive the spectacular 33-mile Rim Drive, hike the Cleetwood Cove Trail to touch the water (which will reopen in 2029), or zipline through the dense surrounding canopy at Crater Lake Zipline.

Plus, nearby, the Lava Beds National Monument features 800 underground lava tube caves open for exploration. Or, you can head indoors to view a collection of over 100,000 Native American artifacts and historic western art at the Favell Museum.

Not for the faint of heart, Klamath attracts current and future explorers alike for its rough-and-tumble natural landscapes, ancient history, and relatively low property tax bills.

Grant County

Median property tax bill: $1,674

Median home price: $229,700

Sequestered near the heart of the state is Grant County, Oregon, where home prices sit comfortably under $230,000. Property taxes are also quite low, costing a median of only $1,674 per year according to the latest data from the Tax Foundation.

Grant is a forerunner for 1860s gold rush history, pioneering, and the great outdoors stretching for miles in every direction. Residents can actually still explore historic mountain towns like Canyon City and John Day, where early prospectors once panned for gold. A major local highlight is the Kam Wah Chun Chinese State Heritage Site — a 19th-century trading post, dispensary, and cultural center that offers a rare look into the early lives of Chinese immigrants.

Additionally, you can easily connect with the county's deep roots at the John Day Fossil Beds National Monument, or hike up to the dramatic wilderness of high-altitude alpine retreats like Strawberry Lakes.

So, if you're a passionate history buff looking for a relaxed lifestyle away from city congestion, Grant offers a destination that might not strain your finances too much.

Sherman County

Median property tax bill: $1,588

Median home price: $211,800

Sherman County home prices are typically on the low side, with the median value hovering around $211,800. Property tax bills are also cheaper, costing roughly $1,588 per year according to the Tax Foundation. To sweeten the deal, the county offers an annual Resident Incentive Program which pays out roughly $600 per household to those who move in and stay for at least one full year.

Home to fewer than 2,000 residents, Sherman is made for those who dream of a pastoral lifestyle. Golden, undulating wheat fields stretch across the landscape, dotted by modern wind turbines and backdropped by a stunning view of snow-capped volcanic peaks.

Locals can catch these famous canyon breezes via windsurfing and kiteboarding along the Columbia River, or head inland to hike the sun-banked canyon trails at Cottonwood Canyon State Park.

Communal ties also run deep here; every summer, the county hosts the Sherman County Fair and Rodeo, complete with livestock shows and local food trucks. Additionally, the Deschutes River (which borders the county) gives residents endless weekend opportunities for whitewater rafting, kayaking, and bass fishing.

Come to Sherman County, Oregon, for a slice of quiet, but stay for the lower property tax burden.

Lake County

Median property tax bill: $1,563

Median home price: $219,500

Lake County stands out as the most affordable place to live in Oregon, boasting a median property tax bill of only $1,563 and an accessible median home price of roughly $219,500.

Appropriately nicknamed "Oregon's Outback," Lake County is vast, with sprawling cattle ranches, dramatic alkali lakes, and a county seat that sits at an elevation of 4,757 feet. Like other areas of Oregon, the region is known for plenty of rock collecting possibilities; rockhounds can hunt for shiny black volcanic glass at Glass Buttes, or head to the Bureau of Land Management public collection area to dig for sunstones — the state's official state gem.

And for the stargazer in all of us, the county's lack of major urban development means it's home to some of the darkest night skies in the U.S.. Out here, the untamed canopy of stars showcases a clear view of the Milky Way that just might perfectly reflect the quiet, ancient beauty of the rocky desert floor below.

If you're hunting for highly affordable property tax bills with Beaver State living, the cheapest place to live in Oregon might be right for you.

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

Dear Wealth Wise: I have two grown children. Both were self-sufficient until recently. I'm still working, but my small business income has declined. I had a major home maintenance project and a low-mileage car that was totaled in an accident. My son was laid off from his municipal job and my daughter went back to graduate school. My children need help. What can I afford to give them without overly compromising my income needs? My savings are modest, and I'm afraid I'll run out of money. My home is worth $700,000, and I had hoped it would be a legacy vacation home for my family. — The Perfect Storm

Dear Perfect Storm: Today's economy looks strong on paper. In May, the U.S. labor market added 172,000 nonfarm jobs, and the unemployment rate was only 4.3%. But those numbers don't tell the whole story.

The Center for American Progress says that despite a relatively low unemployment rate, a growing number of Americans are underemployed. The share of workers not currently in the labor force who want a job rose in 2025 and currently sits above pre-pandemic levels.

This could help explain why young adults are increasingly leaning on their parents for financial support, otherwise known as "subsidized adulting."

As of late 2025, a good 75% of U.S. parents were supporting at least one adult child financially, according to a recent AARP survey. Thrivent's fifth annual Boomerang Kids Survey, meanwhile, found that 44% of parents with a child ages 18 to 35 had one move back home at some point.

If you find yourself in this reader's shoes — wanting to help your family but watching your own income slide — you're facing a tough balancing act. You're clearly hesitant to tap the equity in your home or to downsize, and would rather pass the home down as an inheritance.

It's a tough situation, but it's not uncommon today. Here's what the experts suggest.

Only provide the financial help you can afford

As a parent, it's natural to want to do what you can for your children, even if they're old enough to be self-sufficient. But if you're going to provide help, you need to put your own needs first.

"Helping adult children is one of the most difficult retirement planning decisions because it is a financial and emotional one," says Doug Carey, CFA, founder and owner of WealthTrace. "The question is not 'How much do my children need?' It's, 'How much can I give without putting myself in a position where I later need financial help?' "

Carey recommends totaling your required expenses, including housing costs, property taxes, insurance, utilities, food, healthcare, transportation, debt payments, and taxes. Don't forget retirement plan contributions. From there, you can see how much money you might have left to help your children.

To make this exercise easier, Carey suggests using a budgeting app to track your recurring expenses. He also recommends planning for the worst if your business has not been doing well.

"It would also be a good idea to assume your income will be lower in the future as a safety buffer," he says.

Have money in reserve

The fact that you recently had a major home repair and car loss should serve as a wake-up call, says Carey, that you need cash reserves.

"You don't want to use any of the money from a reserve fund for children since you might need it soon for emergencies," he explains.

Given that your business income has been slowing, you might want to set aside at least six months of living expenses in case things get worse and you need to dip into your savings to cover your basic needs. Having that money in a high-yield savings account could help you avoid tapping your IRA or 401(k) prematurely, allowing those investments to keep growing.

Family support should be temporary

If you have limited financial resources, it's important that any help you give your children not be open-ended, Carey insists.

"Make it very concrete, such as contributing $1,000 per month [toward your kids' expenses] for three months to start. Then review after that," he says. "It is also a good idea to pay specific bills if you can rather than just giving money."

Be very careful with tapping home equity

Your $700,000 home might be your largest financial asset. But Carey says you should be extremely cautious before doing things such as taking out a home equity loan or HELOC.

"Home equity is a great source of emergency money for those in retirement," Carey explains. "If the markets have several bad years or there is a serious medical emergency where you need to use those funds, you might not have enough if you use [that money] for children."

As it is, only 64% of Americans feel confident they have enough money to retire comfortably, according to recent data from the Employee Benefit Research Institute. If you're behind on savings, you don't want to do anything in the near term to reduce the equity you have in your home.

If you have to say no, say no

Saying no to your kids when they need financial help is not easy. But Georgia Bruggeman, Founder and CEO at Meridian Financial Advisors, says you absolutely need to take care of yourself first.

"Your kids are young and have time on their side to figure things out," Bruggeman says. "Bailing them out will not help them learn financial resiliency."

Bruggeman says that if graduate school has become too expensive, you could suggest that your daughter take a break or talk to the school about other options for moving forward.

While you can't snap your fingers and magically get your son a job offer, government layoffs are often more cushioned than private sector ones. Municipal jobs often come with specific severance packages, unused paid time off payouts or solid unemployment benefits. Your son should check his civil service options or look into other government agencies that value his experience.

"You need to be an example to your kids and show them that taking care of yourself is not selfish," Bruggeman insists.

Carey agrees. While you might have some room to offer support, it's crucial to prioritize your financial well-being.

"Do not compromise your own retirement to solve a temporary problem for your children," he says. "You can help support them, but make sure you are financially secure first."

A word from Wealth Wise

Our reader didn't say whether the $700,000 house is her primary home or if she lives near her adult kids. That's an important detail; she could invite her children to move in with her temporarily. That solution could provide solid financial help to them without dipping into her savings.

If the house is a second vacation home, she could sell it and invest that money to provide an income stream. At a 4% withdrawal rate, her additional monthly income would be about $2,300. She could also explore renting the home, though she's said the house has needed repairs. It's possible that renting might involve more financial stress than she could bear now.

We think it's wonderful that she wants to hold onto the home as a legacy for her children. But lowering her family's financial stress by selling could be the best gift of all.

Not all questions submitted will be published, and some might 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 might have in relation to the matters discussed in this article.

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High-income retirees are often surprised by a Medicare expense that can lurk behind the scenes, automatically deducted from their Social Security benefits each month.

It's a surcharge added to Part B and D premiums known as the income-related monthly adjustment amount (IRMAA).

These surcharges are tiered, meaning sometimes a single additional dollar of taxable income could trigger thousands in extra costs. Because it's based on income from two years ago, many retirees don't see it coming until it's too late.

The amounts aren't small. For 2026 the annual surcharges for Parts B and D range from slightly more than $1,100 for the lowest tier to nearly $7,000 for the highest tier. Those are per person, and on top of the base premiums.

Here's how the 2026 IRMAA brackets break down:

The good news is that it's reassessed each year, so you can take steps now to manage this hidden "tax" and optimize your Medicare costs.

Here are five situations in which you could pay more than you should in Medicare surcharges and strategies that could help.

1. After a major life event

Many Medicare enrollees are unaware that IRMAA can be reassessed under certain circumstances if an appeal is submitted.

The Social Security Administration (SSA) outlines specific eligible life-changing events, with the most common being retirement (or a work reduction such as moving from full-time to part-time), marriage, divorce and death of a spouse. A full list is available on Form SSA-44.

Strategy: You should consider appealing if it's likely to move you into a lower IRMAA bracket. This won't be the case for every life event.

For example, if you got married and your joint income would have pushed both partners in a higher IRMAA bracket, appealing won't be beneficial.

If you decide to appeal, you have 60 days from receiving your initial determination notice to do it, with instructions included in that notice. To start, you'll need to contact the SSA and will likely file Form SSA-44 and provide supporting documentation.

Depending on timing, you might need to appeal two years in a row. As an example, someone retiring in 2026 might need to appeal twice: Once for their 2027 assessment (which would otherwise be based on their 2025 working income); and once for their 2028 assessment (which would otherwise be based on their 2026 working income).

2. When your taxable income is near an IRMAA threshold

Distributions from retirement accounts such as traditional IRAs and 401ks typically increase taxable income. If you're near a threshold, an unnecessary distribution could push you into the next tier. The only thing worse than triggering IRMAA is triggering it by just a few dollars.

Strategy: If your income has historically been toward the top or bottom of an IRMAA bracket, try to stay (or get) in the lower tier. Be thoughtful about taking retirement distributions from pre-tax accounts that could pop you into the next tier.

If you have a health savings account (HSA), you can use distributions to cover qualified medical expenses without increasing your taxable income, including paying the premiums, deductibles and copays for Medicare Parts A, B, C and D (but not Medigap premiums).

If you have Roth accounts, you might be able to take tax-free distributions to keep you under the next IRMAA threshold.

3. When you start taking required minimum distributions (RMDs)

RMDs are withdrawals that must be taken from certain retirement accounts starting at age 73. For those with substantial traditional (pre-tax) retirement assets, this can translate to a meaningful increase in taxable income when they start taking RMDs, which can result in a surprise IRMAA bill two years later.

Strategy: If an RMD is pushing you into a higher IRMAA bracket, and especially if you're toward the bottom of that income bracket, a qualified charitable distribution (QCD) might be useful.

A QCD is a direct transfer from an IRA to a qualified charity. It can help satisfy your RMD without increasing your taxable income (up to $111,000 for 2026), all while giving to your charity of choice.

4. When you're doing Roth conversions

A Roth conversion involves moving funds from a traditional IRA to a Roth IRA. Because so many retirees have the bulk of their retirement savings in pre-tax assets, there can be many advantages to completing Roth conversions: The potential for tax-free distributions, no RMDs, and a tax-free asset for your heirs.

The cost is paying taxes now on the converted amount.

The tax impact means it's a good idea to work with a financial adviser and tax professional to execute the conversion, but even then, many well-intentioned professionals forget to mention (or consider) the impact on IRMAA.

Strategy: When considering Roth conversions, you'll want to keep in mind the immediate and future impact to IRMAA. Increasing your taxable income might trigger IRMAA two years after the conversion, but the resulting Roth assets can help save on IRMAA in future years, both by reducing future RMDs and providing a source for tax-free withdrawals.

The key is to understand the short-term and long-term impacts. It might also make sense to spread a conversion across multiple years.

5. When you choose your filing status at tax time (if you're married)

Filers who are married have a choice at tax time to file jointly or separately. But because IRMAA is a surcharge (generally deducted directly from Social Security payments) rather than a true tax (paid and reported to the IRS), it's often not considered as part of the calculation in determining which filing status is more advantageous.

This is problematic because the IRMAA determination for married individuals filing separately is particularly steep (some would say punitive), likely because the government doesn't want couples to file separately solely to avoid triggering IRMAA for both spouses.

Couples — even those working with experienced tax professionals — might save a few hundred dollars on their taxes by filing separately, only to trigger thousands of dollars in annual IRMAA surcharges that could have been avoided.

Strategy: Whether you're doing your own taxes or working with a professional, make sure potential IRMAA surcharges are part of the calculation of whether to file jointly or separately.

Final thoughts

By coordinating distributions, conversions and filing decisions with Medicare thresholds, retirees can avoid thousands of dollars in unnecessary surcharges.

The earlier you incorporate IRMAA into your planning, the more opportunities you'll have to keep your healthcare costs in check.

Related Content

• Projected 2027 IRMAA Brackets and Surcharges for Medicare Part B and D
• 7 Ways to Plan Now to Save on Medicare IRMAA Surcharges Later
• Will Your Retirement Income Trigger the IRMAA This Year? (Plus, 6 Ways to Avoid it in the Future)
• How One Extra Dollar of Income Can Cost You Thousands in Retirement
• 4 Ways to Make Debt Your Friend Instead of Your Frenemy

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

A prospective client told me he had it all done. He had a will in place, did his own stock picking and his wife did the taxes. What more did he need?

I went through my checklist. He had a lot of cash sitting in the bank and CDs — not ideal for high earners, since the interest is taxable. His will had no family trust, causing potential probate issues, and his adult children had no estate plan either. He was giving cash to charity, another tax faux pas. And on we went.

On the surface, financial planning can seem simple, if you are unaware of the possibilities. That is where a professional can help. And thanks to improvements in technology, today I am more excited about the opportunities to help high-income earners than ever in my 25-plus years in the industry.

Here are three examples, depending on individual circumstances, where technology may help in financial planning for high earners.

Tax-aware fixed income

High earners were traditionally advised to invest in tax-free municipal bonds in taxable accounts. Municipal bond interest is generally exempt from federal income taxes, and so high-income investors in a high tax bracket can use municipal bonds to avoid having the interest eaten up by taxes.

However, municipal bonds don't always pay the most interest on an after-tax basis. Some non-municipal bonds, such as corporate bonds and federal agency bonds, can pay more interest even after taxes.

Investment managers today can jump between different types of bonds depending on which yield pays the most after-tax interest for the client. Different bonds move at different speeds or valuations.

Munis might rally and become expensive relative to other bonds, and depending on the client's tax bracket, the manager might take gains from the munis and reposition into taxable bonds. Of course, you must pay attention to credit risk too, as different bonds have different risks.

The key is: Don't think municipal bonds always make sense. That might not be the case, and other bonds may offer different after-tax characteristics worth considering.

Robust tax-loss harvesting

If you are staring at a taxable gain on your Schedule D Tax Form, you probably need a more robust tax-loss harvesting strategy. Tax-loss harvesting — selling stock or bond losses to offset gains elsewhere in a portfolio — has been around for a long time.

However, technology has improved trading capabilities immensely. Today, tax-loss harvesting can be implemented more frequently using these tools.

There are other non-traditional tax-loss harvesting strategies appropriate for certain high-net-worth clients that can also be considered. If your tax-loss harvesting is stuck in the old way of doing it once a year around the end of the year, I encourage you to explore the new platforms that are available.

Advanced scenario planning

Moving to a state with a lower income tax? It can seem like a good idea, but it's best to check with a professional beforehand. Tax software can help show the difference in taxes between the two states, and sometimes the savings is less than expected.

I have client who wanted to see the impact of making additional Roth 401k contributions. The scenario planner showed the tax impact assuming different rates of return and different tax rates in the future. This helped put some context into the client's decision.

The software most planners use today is highly intelligent. Most of these scenarios can be done rather quickly and can lend confidence to decision-making.

My advice to high-income investors is this: If you haven't explored wealth management capabilities recently, much has changed in what a planner can do for you. The technology improvements have significantly improved the advice we can provide, and may be worth exploring.

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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 it comes to planning for retirement, the conversation usually centers around accumulating wealth.

Many people spend the majority of their careers focused on building enough savings to hopefully leave the workforce.

However, as retirement approaches, the mindset needs to shift.

In the five to 10 years before retirement, the goal should shift from growing assets to determining how those assets will generate income and support long-term goals.

Oftentimes, this transition is overlooked, and mistakes made during these years can have a significant impact on a person's ability to retire comfortably and maintain their lifestyle.

One of the biggest mistakes people make during this stage is assuming they still have plenty of time to figure everything out. The final five to 10 years before retirement are when important decisions about income needs, investment risk, Social Security and withdrawal strategies come into focus.

Another common mistake is assuming that a large retirement savings account is the only prerequisite to retirement. While reaching a certain savings goal is a great accomplishment and can provide confidence, it's not an accurate measurement of preparedness.

Many pre-retirees focus on how much they've saved without thinking about how that money will support their lifestyle in retirement. Without a detailed cash flow analysis that accounts for inflation and future expenses, even those with large retirement accounts may find themselves unprepared.

Wealth protection is important

Preparing for life after retirement involves more than maintaining the same investment strategy that worked during the earning years. While growth is important, protecting against significant market losses becomes the main priority.

A major market downturn can have a much greater impact on someone who plans to retire within the next 10 years than on someone who is still decades away from leaving the workforce. Therefore, pre-retirees should evaluate whether a portfolio's risk level still aligns with their personal timeline and income needs.

Understanding where retirement income will come from is equally important. Instead of assuming withdrawals can be made as needed, pre-retirees need to have a clear understanding of how their savings, investments and any other income sources will support their lifestyle.

Failing to account for these factors can leave some retirees with a false sense of security. For example, some pre-retirees think withdrawing 4% from their retirement accounts each year will provide a stable income stream.

While that may be the case in some circumstances, this strategy doesn't account for every market environment. A significant market decline in retirement, in addition to inflation and ongoing withdrawals, can put additional strain on a portfolio, impacting long-term stability.

As a result, stress-testing how savings will generate income in a variety of scenarios can be just as important as the amount of savings.

While every plan is different, there are three specific areas people who are five to 10 years from retirement should begin reviewing.

1. How much income will you need?

The first step is having a realistic understanding of how much income will be needed throughout retirement. Housing, healthcare, travel, hobbies and daily living expenses should all be factored into a retirement budget with regard to inflation.

Pre-retirees in this phase should also evaluate whether their investment strategy still aligns with their retirement timeline, risk tolerance and income needs.

The investment strategy that was used during your working years may not be appropriate as retirement nears. Once the need for income becomes more immediate, such as in retirement, protecting against major losses while managing volatility becomes the main priority.

2. Where will your income come from?

The next step is identifying where retirement income will come from, particularly for tax efficiency. Having different types of retirement assets, such as traditional IRAs, Roth IRAs and non-qualified investments, can offer more flexibility when managing taxes throughout retirement.

3. Do you have a retirement plan in place?

Finally, pre-retirees should have a comprehensive retirement plan in place before exiting the workforce. This plan should serve as a road map, accounting for income needs, spending expectations, taxes, investment risk and long-term goals.

Retirement is often viewed as a financial milestone, but the final preparations that should be made in the final decade of your career aren't talked about nearly as much.

While reaching a target number of retirement savings is important, understanding how those savings will generate income and withstand market volatility while supporting long-term goals is the key to a sustainable retirement.

By taking the time to address these questions in the decade leading up to retirement, pre-retirees can transition into retirement with more confidence and a better understanding of what lies ahead.

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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.

Many families view the SUV as a status symbol of success parked in the driveway. But that badge of success might be among the most expensive financial decisions you make this decade.

Buying a vehicle is one of your largest household expenses, yet too many drivers prioritize aesthetics above economics. While price and passenger capacity matter, a surprising trend has emerged at dealerships: Shoppers are ignoring affordable minivans in favor of pricier SUVs.

This represents the "SUV tax," the total cost of ownership of choosing a lifestyle badge such as an SUV over a more affordable vehicle. I'll break down the opportunity cost between the two vehicles, explain how every extra dollar spent on a car isn't working for your future and show how the "mom car" of the 90s might be your smartest financial move.

Why are people choosing SUVs more?

Growing up, we had a minivan, the "mom car" of the 90s. It wasn't pretty to look at, but it was practical, provided ample room for growing families and was a staple of family road trips. Going from a cramped sedan to a roomy minivan not only made 12-hour car trips more fun, but it made them more bearable for all involved.

Then, things changed in the 2000s. Those four-wheeled tugboats were replaced by vehicles of similar size delivering more visually appealing designs and higher profiles. If minivans were viewed as "you're settling," then SUVs were more of a "you made it" statement.

This sentiment is still reflected today. In a survey conducted by Bumper, respondents were asked what their perfect vehicle would be, and 63% pictured an SUV. A sedan came in second at 19%, while a minivan trailed the pack at 13%.

Yet, this is where things become interesting: In that same study, the top three things car buyers look for in a vehicle are passenger seating capacity, fuel economy and price. This means buyers are looking at practical features that can save them money now and down the road, something minivans do much better than SUVs.

Comparing opportunity cost between minivans and SUVs

Minivans are often more affordable and offer more space for passengers and cargo than SUVs, per Kelley Blue Book. Considering that price and passenger capacity are two of the most important factors car buyers prioritize, it shows that minivans can be smarter buys.

Let's break down the costs. The gap between what you would pay for a minivan and an SUV isn't substantial for base-level models. To demonstrate, the 2026 Toyota Sienna is $40,820, while the 2026 Honda Pilot is $42,395. SUVs come with more trim options, which can widen the financial gap.

Here's a breakdown of how SUVs and minivans compare on metrics car buyers care about:

*Averages calculated from the top 5 models in each segment. Sources: KBB, Edmunds, TrueCar, CarFax, Autoblog and MoparInsiders, with the table provided by Bumper.

On top of this, minivans aren't as expensive to insure. Why? Because they have a lower center of gravity, reducing their rollover risk. They also lack some of the expensive off-road features some SUVs offer, and their lower overall price can keep insurance costs reasonably affordable.

Another thing to consider in ownership costs is repair bills. This again is another edge to minivans. Minivans are often cheaper to fix because many are built on passenger car platforms. With more parts available, it's cheaper to make fixes.

Alternatively, many SUVs feature complex drivetrain and suspension systems. This can result in higher repair bills and more frequent maintenance.

These differences in maintenance and insurance costs might seem minor on a month-to-month basis. Yet, they collectively form the basis of a gradual, much larger financial shift. By capturing these savings, you move from simply managing costs to building wealth.

A small change yields big results

The "SUV" tax isn't just the sticker price you pay at the dealership; it's the opportunity cost. To illustrate, if you save $5,000 by choosing a minivan and invest that difference in an S&P 500 index fund with an average 7% annual return, you would have almost $10,000 in additional retirement savings after 10 years.

Over time, this can be one small decision that has a much greater impact on achieving your savings and retirement goals more quickly. It might not be as pretty as a sportier SUV, but you'll have the satisfaction of knowing your future self will thank you for that purchase.

Before you choose either option, make sure to shop for car insurance to see how much your new ride will cost you. Use this Bankrate tool for a faster rate comparison:

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The allure of living in a state with no income tax in retirement can be undeniable. You won't have to worry about withdrawals or required minimum distributions pushing you into a higher tax bracket. Nor do you have to think about the state taxing some of your Social Security or pension. Plus, every dollar you save on taxes is another dollar you can spend on travel, hobbies, spoiling the grandkids, or leaving money to your heirs.

It's one of the reasons Florida, Texas and Tennessee are popular destinations for retirees. But relocating for the tax break doesn't mean you'll automatically save in retirement. Other living expenses could make it a wash, or worse, more expensive.

"If a state doesn't have income tax, it still has to pay for things," says Chelse Stevens, a certified financial planner and VP, consultant at Fidelity Investments. "Tennessee has one of the highest sales taxes (in the country). You start to see it in other ways."

And it's not just sales tax where costs may be higher in a tax-friendly state. Florida doesn't tax your income, but it has the highest HOA fees and ranks third for the most expensive homeowners insurance. Meanwhile, Texas has the seventh-highest property taxes in the country and ranks fifth for the highest average home insurance premiums. Then there are property values, the cost of living, and health care costs to be factored in. You may not have to pay income taxes, but is everything else more expensive?

It's why Stevens says don't let the "tax tail wag the dog" when choosing where to live in retirement. Instead, ask yourself these three questions first to ensure you're moving for the right reasons.

1. What is the state's total tax picture?

When clients tell JPMorgan's Chief Retirement Strategist Michael Conrath that they are considering moving to a tax-free state, the first question he asks is which taxes they are referring to.

"It can be a pitfall to focus solely on the state income tax piece," says Conrath. "A zero income-tax rate can look great on paper, but it’s not a complete retirement plan. For retirees, the all-in picture — income taxes, property taxes, sales taxes and local taxes — is what matters."

Don't forget to consider the state's estate and inheritance taxes, says Conrath, as they can change the legacy you leave behind. Before relocating, Conrath suggests working with a tax professional, financial adviser, or doing it yourself to determine what you’ll pay in total taxes where you are now versus where you’re going.

2. Do I understand the total cost of living, and can I afford it?

Taxes are only part of the decision. There are other living expenses, which is why the second question you have to ask yourself is: Do I know the total cost of living?

"A move that saves on taxes can be offset quickly by higher insurance, utility bills or health care costs, which can vary dramatically by ZIP code," says Conrath. If you move to a state to save on taxes, will you end up paying more for housing, insurance, food, travel, medical and entertainment? Even one of those expenses could cancel out the savings from not having to pay state income tax.

3. Will the move improve my quality of life?

Moving in retirement for the taxes alone is not a good reason, even if you think you'll save money. There has to be something more, says Stevens, which is why the third question you should ask yourself is: Will the move improve my life?

Even if moving to Florida in retirement saves you tens of thousands of dollars, is it worth leaving your support network behind? A successful retirement relocation means balancing the financial benefits with quality-of-life factors, including proximity to family, friends, healthcare and daily conveniences.

"Before you move, make sure you are considering all the factors, not just one," says Stevens.

Test drive before you commit

To really get a sense of what it will be like to live in a tax-free state, consider a test run, Conrath says. Try renting for a season to get a sense of the costs and other trade-offs that won't be obvious by running the numbers on a spreadsheet. A test run can also help you "pre-experience" what normal life will be like if you retire in your city of choice.

"Don't just chase the lowest tax rate," says Conrath. "The goal is to understand and improve the durability of your plan over the course of your entire retirement so that you have the confidence to enjoy the retirement you’ve earned."

Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are: 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You, 3 Questions That Reveal If You're Actually Ready to Age in Place, 3 Questions That Determine If You're Actually Ready to Retire Early, 3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof, 3 Questions to Ask Before Unretiring, 3 Questions That Help You Find Your Perfect Social Security Claiming Age, Go Ahead and Splurge, But Ask Yourself These 3 Questions First and Before You Give Money To Your Kids, Ask Yourself These 3 Questions.

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Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million.

They're sharing how they did it and what they're doing with it.

This time, we hear from a single 51-year-old retired associate professor of surgery who lives in North Carolina. She reports that her salary started at $210,000 and was $530,000 when she was forced to retire because of health issues.

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

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

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

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

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

The Basics

How did you make your first $1 million?

I grew up in a lower-middle-class family and had to pay for my own education, so I went to schools that would pay at least partially for me to attend. I had less debt because of that, but still had more than I was comfortable with by the time I finished medical school.

Residency paid a pittance, but I found a cheap place to live, cooked my own meals and managed to fully fund my retirement account each year for the first two.

Then 9/11 happened and wiped out my accounts. I was so upset that I stopped contributing to them for the next two years. I didn't pull out what was there, so it all recovered, but I missed out on all those gains by not adding more.

I worked extra shifts at a nearby hospital to double my resident income for the last two years. Then I did a year of fellowship, also low pay and in a high-cost-of-living area, but I lived as frugally as I could and saved as much as I could.

My first attending salary was well below average, but as a woman in surgery, I was supposed to take what they gave me, so I did. I put a quarter of my salary into retirement accounts, which I could because I was an independent contractor, and used the rest to buy a house and a new car.

I built up cash savings, but never thought to invest it, out of fear that I'd lose it too easily.

Then I changed jobs and got sick within a year of doing so. I spent the next year recovering from four surgeries, only able to work in a limited capacity, and had my salary reduced as a result.

I got better, but I knew that I had to change some things. I stopped buying so much stuff I didn't need, changed jobs again to boost my pay by $200,000 to market rate and made a point of saving more than half of my earnings.

Then, in January 2015, I finally took the plunge and started a brokerage account. I put my aggressive savings to work there and hit my first million, between all the retirement accounts and the brokerage, after a year and a half or so.

What are you doing with the money?

I did absolutely nothing, just left it to keep growing in investments. I was still worried about not having my career for much longer. And I was right to worry — I had to medically retire at age 44 because of more complications from three more surgeries.

By then, my savings had grown to about $2 million, and I was terrified that it still wouldn't be enough for such a long (forced) retirement.

The Fun Stuff

Did you do anything to celebrate?

No. I think I was too busy still worrying about my health.

What is the best part of making $1 million?

The momentum it gives your next million. The first million feels the hardest, because it requires a lot of savings and discipline. After that, it just keeps going on its own, as long as it's invested reasonably.

Did your life change?

Yes, because it meant that even when I couldn't work, the money could keep on working. It gave me security, a safety net.

How much more would it take for you to change the way you live?

This is a question I ask myself regularly. I grew up on a routine regimen of delayed gratification, necessitated by family circumstances. If I wanted something, I had to "save up" for it, and I had to forgo something else. It was a deprivation mindset.

I see now that, while I was fine with it at the time, I missed out on a lot of amazing experiences and travel — things I can't make up for now because of my health.

I let myself spend more freely now than I used to, but only up to a limit.

I still can't fly business class and feel OK with it, though it would make a huge difference to my comfort when flying, given my medical issues. I think it would take having $10 million to make that change.

$1 million is not all that much in this world, in the sense of it not being enough to radically change one's life, unless you had nothing before.

But $10 million throws off more than enough to live on without touching the principal, and I think that's what real wealth probably means. A 4% withdrawal would be $400,000, as opposed to $40,000 for $1 million. So, eight figures instead of seven. I could change for that kind of cushion.

Did you retire early?

I had to retire at 44 because of medical issues. I didn't want to; I loved my work, and if my body could take it, I would gladly have continued until at least 60.

How do you define being wealthy?

When I was working, I used to tell myself that I'd know I was "wealthy" when I felt no hesitation paying to fly business or first class.

That day has never come, but maybe it would have if I were still making the kind of money I used to. I don't feel I have that kind of leeway now.

But I am also no longer as scared of running out of money, despite my prolonged retirement, so that is wealthiness of a kind.

Maybe "wealthy" is when I can live off the interest and dividends of my money, without touching the principal. I'm not there yet.

Looking Back

Anything you would do differently?

I'd have started investing earlier, instead of just saving. And I'd have negotiated my salary from the start, instead of only doing that after I was afraid of a shortened career. Negotiating got me a boost that took me to that first million faster.

I'd also have spent a lot less in the early years, if I had known then what I do now, and wouldn't have bought a bigger home than I needed.

I'd have more discipline from the start about spending.

What advice would you give to your younger self?

It seems far away when you're a student for so long, in debt while your friends are already working in good careers, making real money, while you are nowhere close. But you'll get there, if you just stay frugal a bit longer.

Did you work with a financial adviser?

When I first started my brokerage account, I put the money into a managed portfolio run by (a firm that) had a guarantee of your fee back after a year if you weren't happy. They didn't even beat the S&P 500 in my first year, so I left and got my fee refunded.

I did much better on my own, with leaving things in index funds and just continuing to contribute steadily.

I haven't been willing to seek out an adviser after that.

Did anyone help you early on?

My dad, in a way. Mostly, he was an example of what not to do. He lived in fear for years, didn't invest because he was afraid to lose.

He was the one who believed in saving every penny in a bank for the meager interest. It took him even longer than it took me to risk investing on his own, but he has embraced it and done well for himself, starting from a low salary and never even cracking six figures, despite having a PhD. He started investing seriously 25 years ago.

But he never taught us to do any of that — my sister and I had to figure it all out for ourselves and pushed ourselves to do it far earlier than he did.

Looking Ahead

Plans for your next $1 million?

I've passed the next already. Again, the money is doing it on its own. I need it for my long-term future, because my retirement is so much longer than expected.

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

For some, it's slow and steady. For others, like me, it had to happen quickly because I was running out of time in which to earn.

Either way, the secret to getting there is discipline. Steady, regular contributions, whatever you can afford.

Pay yourself first. Instead of saving "what's left over" at the end of a paycheck, count a definite amount from the start of each check and directly deposit it into savings or a brokerage account. Invest that money right away — automate it.

It is better if you're not looking at it, or the numbers, too closely for a while. When you do after several months, it will be a nice surprise how much closer you are to the goal.

Do you have an estate plan?

Yes. A revocable trust and will, plus DNR, etc.

Revocable trust because I'm single, and I want to make it easy for my family to inherit my home and be able to pay for it from my accounts.

Will, because after two separate near-death experiences, I needed to make sure someone had custody of my dog in the event of my death. I wanted that person to have money for her care, but also for themselves.

And I wanted to divide up my valuable smaller possessions, ensuring they'd go to friends and family who would appreciate them.

What do you wish you'd known …

When you first started saving? That banks are not places to earn money. There are so many better uses of your money than a savings account. It took me way too long to be brave enough to go elsewhere with my funds.

When you first started investing? That it's scary, but it's also kind of simple. Don't try to be an expert stock picker. Just let the rising tide lift your boat (index funds, ETFs).

I do wish I had paid more attention to the tax consequences of different types of investments early on so I would have bought them in the correct accounts.

And I wish I had known more about investing my early retirement accounts myself. I only started doing all that after I converted the workplace accounts to IRAs upon retirement.

Also, I wish I had understood account fees more clearly before choosing certain investment products.

When you first started working with a financial professional? Men think they know how to invest. Women think they don't. The truth is, no one is all that great at it! Luck matters as much as research.

When you first retired? That I really would be OK. I was absolutely terrified of ending up destitute or having to depend on my parents, who didn't have much themselves.

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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Money usually goes off track slowly, with a few ignored expenses here and some delayed decisions there.

But one financial reset each month can help you build a stronger financial position over the course of a year. I'm a financial professional with 10-plus years of experience, and this guide shows you how — and you don't have to start the process in January.

Month 1: Set financial goals and rebuild your budget

Start with measurable goals for the year.

Then rebuild your budget. It will work better when it accounts for real life instead of ideal behavior, so pull up the last three months' worth of bank and credit card statements.

This is usually where the surprises show up — such as deliveries, annual subscription renewals and more small purchases than you think — and it will show you where you can cut back.

Don't forget to plan for irregular expenses, such as insurance premiums, holidays, travel, car maintenance and school fees.

Month 2: Review your cash buffer

Look honestly at your emergency fund.

Three to six months of essential expenses is the common benchmark, but that range changes depending on how stable your income is.

If you start this process in January, then February is early enough to fix problems before tax season turns into a scramble.

Gather everything in one place first: W-2s, 1099s, mortgage interest statements, HSA records, donation receipts and investment documents.

Check your withholding.

A large refund feels good until you realize you essentially gave the government an interest-free loan for 12 months. A surprise tax bill feels worse. Adjusting withholding now is easier than fixing it next April.

And if a refund is coming, decide where it goes before it disappears into random spending.

Month 3: Attack expensive debt

This is the month to map everything out properly: Balances, rates, minimum payments, promotional periods and variable-rate exposure.

Stack small changes together:

• Negotiate lower rates
• Use balance transfers carefully
• Redirect subscription savings

The important part is reducing principal consistently. Minimum payments alone keep people stuck for years.

Month 4: Make money conversations normal

Pick one area and learn about it properly, whether it's investing basics, credit scores, insurance, taxes or compound interest. Then bring the household into it.

Conrad Wang, managing director of EnableU, works with families navigating long-term care and support planning, where financial conversations are often delayed until stress forces them to happen.

"The households that usually cope better financially are the ones having practical conversations early (around) what support exists, what recurring costs look like, and what happens if circumstances change," he notes.

Month 5: Clean up spending habits

Start with recurring charges, such as streaming services.

You did this in the first month, but you've probably stacked up a few subscriptions by now. This step helps with that.

The small operational habits matter, too, like meal planning a couple of nights each week. Saving an extra $100 or $200 a month changes things over a year.

If you cut $80 from a recurring expense, move that exact $80 automatically into savings or investments before it gets absorbed elsewhere.

Month 6: Financial check-in

This is where you stop and assess whether the past five months have helped you to move in the right direction.

Sometimes the answer is uncomfortable. But it's better to adjust now than pretend everything is fine at the end of the 12-month process.

If you started in January, then this is when bonuses, freelance income, investment gains and insurance changes can start affecting finances in ways people miss. Taxes can get messy at the midyear point if income changes and withholding does not adjust with it.

While you are reviewing accounts, check your Social Security earnings record, too. Errors are uncommon, but fixing them decades later is much harder.

Month 7: Review investments and rebalance risk

People often discover their allocation no longer matches their actual risk tolerance. This is where rebalancing comes in.

Gregor Emmian, deputy chief digital growth officer of trading app Rise, says people often mistake market movement for strategy: "One of the easiest ways investors drift into unnecessary risk is by letting a strong market convince them they had a plan all along. We see people become massively overweight in a single asset class without noticing because the gains feel good."

Look at your portfolio as a whole. If one category has become disproportionately large, trim it and redistribute intentionally.

Month 8: Review insurance before you need it

Most people set policies once and never revisit them, even after major life changes.

Review everything:

• Health insurance
• Auto and home coverage
• Disability insurance
• Life insurance beneficiaries
• Retirement account beneficiaries

Disability coverage gets ignored far too often. For many households, future earning power is the largest asset they actually have.

And update beneficiaries carefully. Those designations often override what is written in a will.

Month 9: Increase income

Now that you've done the previous eight steps, it's a good time to revisit your compensation.

If a raise is not possible, negotiate for something else useful: Training, flexibility, title progression or a documented path toward promotion.

Outside traditional employment, additional income streams can help accelerate financial goals faster than minor budgeting tweaks. Even temporary income boosts can reduce the time it takes to pay off debt.

Month 10: Handle estate planning before it becomes urgent

Avoiding estate planning creates problems for the people left to handle everything later.

At a minimum, most adults should have:

• A will
• Durable power of attorney
• Healthcare proxy
• Updated beneficiaries

If children are involved, guardian designations matter, too.

Month 11: Make giving intentional

November is usually when people start thinking about charitable giving, but it works better when it is planned instead of reactive.

For people who itemize deductions, donating appreciated securities creates better tax outcomes than donating cash directly.

The important part is whether your spending matches your values and deciding what money can support beyond consumption.

Month 12: Celebrate your wins

Take a net worth snapshot and celebrate your wins. Maybe you paid off a credit card balance that had followed you for years. Maybe you finally built a cash buffer.

Financial improvement can feel repetitive. Slightly boring, even. Then one day you look back and realize there's less pressure than there used to be.

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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.

Mike came into the consultation with his mind nearly made up.

At 67, he was past full retirement age and, between him and his wife, he had the larger earnings history. He could file for Social Security now and receive about $3,500 a month. Waiting until 70 felt, to him, like leaving money on the table.

"I paid into this system for decades," he said. "Why should we spend down our portfolio while I wait for a larger check?"

Amy, his 54-year-old wife, was quiet.

That happens often in Social Security consultations. Some couples arrive as a team. Others arrive as two people making what looks like a joint financial decision, while one spouse carries most of the confidence and the other quietly carries most of the worry.

So I asked Amy a simple question: "What concerns you most if Mike dies first?"

She paused. "I don't want to tell him what to do," she said. "But if I'm the one left here for another 25 years, I don't know what my income is supposed to look like."

That sentence changed the consultation.

The Social Security decision was no longer just about Mike's check. It was about Amy's future income floor.

The mistake: Claiming as if you are single

One of the most common Social Security questions I hear is: "How long do I have to live to make delaying benefits worth it?"

It is a logical question. It is also often the wrong one.

For a single retiree, a break-even calculation may be a useful starting point. But for married couples, especially couples like Mike and Amy with an age gap, Social Security should not be modeled only over the life of the person filing. It should be modeled over the life of the household.

That distinction can change everything.

Social Security gives retirees a claiming window. You can generally begin retirement benefits as early as 62, claim at full retirement age or delay as late as age 70. Delayed retirement credits can increase a retirement benefit for each month benefits are delayed beyond full retirement age, and the increase stops at age 70.

Many retirees know that delaying can increase their own monthly benefit. What they often miss is that the higher benefit may also affect the surviving spouse.

When one spouse dies, the survivor generally does not continue receiving both full Social Security checks. If the survivor's own retirement benefit is smaller than the survivor benefit available on the deceased spouse's record, Social Security generally pays the higher amount, either directly or by paying the survivor's own benefit plus a survivor amount to bring the payment up to the larger benefit.

That means the higher earner's claiming decision can become the surviving spouse's income floor.

This is where age gaps matter.

If spouses are close in age, the survivor period may be shorter. But when one spouse is 10, 12 or 15 years younger, as Amy nearly is, the survivor period can last decades. A claiming decision that seems minor at 67 can become a major income decision for a widow or widower in their 70s, 80s and 90s.

That is why I tell couples: "Do not ask only, 'When do I break even?' Ask, 'What happens to my spouse if I die first?'"

A simple example

Let's use round numbers.

Assume Mike's benefit if he files now is about $3,500 a month. If he delays until 70, delayed retirement credits could raise that benefit to roughly $4,340 a month before future cost-of-living adjustments. The exact increase depends on birth year and the number of months delayed, but the planning concept is the same: Waiting can produce a meaningfully larger check.

In this illustration, the difference is about $840 a month, or roughly $10,000 a year.

If this were only about Mike's own life, he might focus on how long he must live to recover the checks he skipped by waiting. But in an age-gap marriage like his, that is incomplete.

If Amy later qualifies for an unreduced survivor benefit and survives Mike by 20 years, that extra $10,000 a year could represent roughly $200,000 of additional survivor income before cost-of-living adjustments and taxes. If she survives him by 30 years, the difference could be roughly $300,000.

Mike and Amy's actual numbers will depend on their birth dates, benefit amounts, claiming ages, health, work history and survivor eligibility. Once survivor benefits are available, Mike's claiming age can help determine the size of Amy's protected income stream for the rest of her life.

Spousal benefits and survivor benefits are not the same

A major source of confusion is the difference between spousal benefits and survivor benefits.

A spousal benefit while both spouses are alive can be worth up to 50% of the worker's primary insurance amount, depending on the spouse's age and eligibility. Delayed retirement credits earned by the worker do not increase that spousal benefit above the 50% calculation.

Survivor benefits are different. A surviving spouse who qualifies may receive up to 100% of the deceased spouse's benefit, depending on the survivor's age and other factors. In addition, delayed retirement credits earned by the deceased worker can increase the survivor's benefit.

That is why the higher earner's claiming decision can be so powerful.

Delaying may not dramatically improve the younger spouse's benefit while both spouses are alive. But it may materially improve the amount available to the survivor after the higher earner dies.

This is the distinction many couples miss. They ask, "What will my spouse receive while I am alive?" But the more important question may be, "What income will my spouse have if I die first?"

The marriage dynamic matters

Social Security claiming conversations are rarely just about numbers. They often reveal how a couple makes decisions.

Some spouses communicate openly. They ask questions together, challenge assumptions respectfully and think of retirement as a shared household problem. Others unintentionally approach the decision as if they are still financially single. One spouse focuses on "my benefit," "my life expectancy" and "my money," while the other spouse quietly wonders what the plan means after the first death.

That dynamic matters because the quieter spouse is often the one carrying the survivor risk.

In Mike and Amy's case, Mike was not trying to ignore Amy. He simply saw the decision through the lens of checks he would receive or give up. Amy saw it through the lens of a possible future where she was widowed, older and dependent on one remaining Social Security check.

He had not been selfish. He had been solving the wrong problem.

Three questions every age-gap couple should ask

The right Social Security claiming strategy is not based on a rule of thumb. It is based on household modeling. For age-gap couples, three questions are especially important.

1. Who is this decision really protecting?

At Social Security Claiming Experts, we help clients understand their unique longevity forecasts. But no one can predict longevity perfectly. Age, health, family history and gender all matter.

In consultations, I listen not only to the numbers but also to the marriage dynamic. The higher earner may be focused on recouping what he or she paid into the system. The younger spouse may be thinking about an entirely different question: "Will I be financially secure if I am alone?"

Neither concern is irrational. But they are not the same concern.

If the higher earner is older and the lower-earning spouse is younger, the claiming decision may affect the younger spouse long after the higher earner is gone. That does not automatically mean the higher earner should wait until 70, but it does mean the survivor impact must be modeled.

Social Security is not just a monthly check. For many households, it is longevity protection. The longer the surviving spouse may live, the more valuable that protection can become.

2. Which Social Security check will survive?

Look at both spouses' benefit estimates.

If both spouses have similar earnings histories and similar benefit amounts, the survivor issue may be less dramatic. But if one spouse's benefit is much larger, the higher earner's claiming age deserves special attention.

The key question is not just, "How much will we receive as a couple?" The better question is, "What remains when one check goes away?"

Many affluent couples underestimate this because they view Social Security as supplemental income. But after the first death, the surviving spouse may face lower household income, higher effective tax pressure, reduced pension income or greater dependence on portfolio withdrawals.

In that moment, the larger Social Security check can become far more important.

3. What is the cost of waiting, financially and emotionally?

Delaying Social Security is not free. A household may need to use taxable savings, draw from retirement accounts, rely on pension income, continue working or adjust spending to bridge the gap.

For high net worth households, this is often where planning creates the most value. The question is not simply whether delaying produces a larger Social Security check. The question is whether the household has an efficient way to bridge the years before claiming.

Sometimes using portfolio assets earlier in retirement feels uncomfortable. That discomfort is real. The older spouse may see the account balance falling and feel like the plan is losing ground. The younger spouse may see the same withdrawals as the price of building a larger protected income floor for later.

Both perspectives deserve to be heard.

Other times, waiting may not make sense. If delaying would force damaging withdrawals, create cash-flow stress or increase risk in the rest of the plan, claiming earlier may be appropriate.

When delaying may be worth it

Delaying the higher earner's Social Security benefit often becomes more attractive when several factors line up:

• The higher earner has a much larger benefit
• The spouse is younger
• The younger spouse's own benefit is modest
• The couple has reasonable longevity expectations
• The household has enough savings, income or flexibility to bridge the delay

But this is not an argument that everyone should wait until 70.

An earlier claim may make sense when there are serious health concerns, when both spouses have similar benefit amounts, when there is no meaningful survivor issue, or when the household needs the income immediately.

The point is not "always delay." The point is "do not claim as if you are single when you are married."

The moment the conversation changed

When Mike first looked at the decision, he saw three years of checks he would not receive if he waited. That is a natural way to see it.

But when we modeled the household to Amy's potential survivor years, the decision changed. Mike was no longer comparing checks he might receive at 67, 68 and 69. He was comparing Amy's possible income at 75, 85 and 95.

By the end of the conversation, he said it differently: Waiting was not simply giving up checks. It was potentially buying Amy a larger, inflation-adjusted income floor.

That is a much more useful frame.

Your Social Security claiming strategy should not be built only around the person filing first. It should be built around the person most likely to live longest.

In many age-gap marriages, that means the older, higher-earning spouse's Social Security decision is not really about the older spouse at all.

It is about the spouse who may still need that check 20 or 30 years later.

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• Why You Need to Start Your Social Security Claim 4 Months Early: 7 Steps to Prevent a Delay at the Worst Possible Moment
• Don't Let Low Tax Rates Lull You Into the Torpedo Zone: If You Have $1M to $3M in Tax-Deferred Savings, You Could Be Looking at Brutal Tax Bills in the Future

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.

Jim and Pam are a hypothetical couple I use with clients to illustrate what the numbers in a retirement plan can look like. They're both 62, have $2.5 million in pretax retirement accounts and $54,000 a year in combined Social Security benefits when they retire. On paper, they've done everything right.

But when Jim dies at 75, Pam's financial picture changes in ways they never planned for.

Her Social Security does not disappear entirely. The higher of the two checks continues, but one check is gone and her fixed income drops significantly overnight.

Her effective tax rate climbs from approximately 10% to between 15% and 23%, and may reach 28% by the time she is 85. Her total annual tax bill rises by approximately 145%, from roughly $11,000 to roughly $27,000. Within just a few years that increase may exceed 300%, with estimated total taxes of around $46,000 a year driven primarily by required minimum distributions (RMDs).

On top of that, a Medicare IRMAA surcharge begins approximately two years after RMDs start, ranging from an estimated $4,600 to $6,300 a year, deducted directly from her Social Security before she ever sees it.

And her RMDs, around $167,000 a year when they begin and potentially $250,000 a year as the account grows, now land entirely on a single tax return.

Same savings. Dramatically different tax bill — for the rest of her life.

This is the widow's penalty. It is not a fluke or an edge case. It is a predictable consequence of how our tax system treats a surviving spouse, and most retirement plans don't take it into account.

Four financial hits that arrive at once

When one spouse passes away, the survivor faces four simultaneous changes. Each is significant on its own. Together, they reshape the entire retirement picture.

1. Tax brackets compress immediately.

The 22% tax bracket for a married couple filing jointly in 2026 begins at $100,800. For a single filer, that same bracket kicks in at $50,400. The standard deduction also drops, from $32,200 for a married couple to $16,100 for a single filer. The first full tax year after a spouse dies is often the most financially disorienting year a surviving spouse will face.

2. Medicare IRMAA surcharges can jump.

Medicare's income-related premium adjustments are tied to income thresholds that are far lower for single filers than for married couples. A couple may be comfortably below an IRMAA tier, but when one spouse dies, the survivor can suddenly be well above it, paying thousands more a year in Medicare premiums on exactly the same income.

3. One Social Security check stops.

The survivor keeps the larger of the two benefits but loses the other entirely. For many couples, that's a drop of $25,000 to $40,000 in annual income. It doesn't get replaced.

4. RMDs don't stop.

At age 73 or 75, RMDs continue, regardless of what else has changed. The account balance is the same. But those forced withdrawals now land entirely on a single tax return, at single-filer rates, whether the money is needed or not. For a $2.5 million pretax account, that's not a rounding error.

Why don't retirement plans cover this?

Three things work against couples here. First, most retirement planning conversations focus on accumulation — saving more, investing well, managing risk. Tax planning for the surviving spouse is rarely on the agenda.

Second, advisers and clients alike tend to plan for the couple as a unit. The shift to single-filer status feels abstract until it's real, and by then the options have narrowed.

Third, these are uncomfortable conversations. It's easier to defer them. But in tax planning, time is the asset. The window for meaningful action is only open while both spouses are alive, healthy and still in a favorable bracket.

Four things to do while the window is still open

The widow's penalty is predictable. That means it's plannable. Here's where I focus with clients who want to get ahead of it.

1. Roth conversions during the married filing jointly window.

Every dollar converted from a traditional IRA to a Roth while both spouses are alive is a dollar the survivor can access tax-free, without pushing into higher brackets, triggering IRMAA surcharges or increasing Social Security taxation.

The married filing jointly bracket is one of the most valuable tax planning advantages available to couples. Most never use it for this purpose. I'd argue it's the most effective move available for reducing the survivor's future tax burden.

2. Term life insurance sized to replace the lost Social Security check.

This one surprises people. Term insurance isn't just a wealth-transfer tool. It can be a direct replacement for the Social Security income that disappears when a spouse dies. Size it to cover the income gap, put it in place before retirement while premiums are still reasonable, and the survivor has a real financial buffer during the most financially vulnerable period of widowhood.

3. Coordinate Social Security claiming with the survivor in mind.

Delaying the higher earner's benefit increases the survivor's check for life. For couples where one spouse earned significantly more, that delay can materially increase the survivor's annual income for life. The claiming decision that maximizes lifetime income for two people is often different from the one that maximizes the survivor's income alone. That gap deserves explicit attention.

4. Keep the portfolio working.

As a married couple, it can be easy to feel like the investments do not need to work as hard. Two incomes, shared expenses, a plan built around both of you. But that can change at any moment.

While both spouses are still living, keep the portfolio growing. A surviving spouse at 75 may have 20 or more years ahead and may suddenly need to draw significantly more from the portfolio than the couple ever did together.

A portfolio that becomes too conservative too early loses the growth needed to outpace inflation and fund a long retirement. Investment strategy should be built around who is still here and how long they may need it to last, not the couple's age at the time of the first death.

The penalty is predictable. So is the solution

The math behind the widow's penalty isn't complicated. What makes it damaging is that it catches couples off guard, at the worst possible time, with no runway left to act.

Jim and Pam's numbers aren't abstract. They're close to what I see across my client base, with different names. The tax bill Pam faces isn't the result of bad luck or bad investments. It's the result of a plan that was built for two and never updated for one.

The right time to fix that is now, while both spouses are here, the brackets are still favorable and the options are still on the table.

Related Content

• Widow's Penalty: Three Ways to Protect Your Finances
• How One Widow Nearly Missed Out on $213,000 in Social Security
• How to Retire at 62 and Build a Financial Bridge to a Maxed-Out Social Security Check at 70
• 9 Tax Surprises Retirees Don't See Coming Until It's Too Late
• I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement Income

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

Asset location and asset allocation are two of the biggest levers investors can pull to improve long-term investment outcomes. While they sound similar, they refer to two very different concepts.

Asset location refers to where you hold your investments. This matters because different account types receive different tax treatment. Placing the right investments in the right accounts can meaningfully improve after-tax returns over time.

For example, a traditional 401(k) allows investments to grow tax deferred until withdrawal, a Roth IRA offers tax-free qualified withdrawals in retirement, and a taxable brokerage account provides complete flexibility but might generate annual tax liabilities from dividends, interest and capital gains.

Asset allocation, however, is arguably even more important. This refers to the mix in your portfolio, such as stocks, bonds, commodities or other investments. Your allocation is one of the primary drivers of both risk and return because different asset classes respond differently to economic conditions.

For example, stocks generally perform best during periods of economic growth, while high-quality bonds have often provided stability during market downturns.

Because these assets aren't perfectly correlated, they can complement one another within a diversified portfolio. This also creates an opportunity to earn what's commonly referred to as a "rebalancing premium."

As markets move, one asset class might outperform while another lags. By periodically trimming the outperformers and adding to the underperformers, investors systematically sell high and buy low.

The challenge is that maintaining an asset allocation requires discipline. Many investors struggle to rebalance according to a predetermined plan.

Instead, they attempt to time the market, chase whichever asset class has recently performed best, or abandon their allocation during periods of volatility. Over time, these behaviors can reduce long-term returns.

For investors who would rather avoid making ongoing allocation decisions, outsourcing the process to an ETF might be worth considering.

Although these funds charge a fee, they automatically maintain the target allocation behind the scenes. That reduces the investor's role to consistently contributing new savings, reinvesting distributions, and staying the course through changing market conditions.

Here's what you need to know about how all-in-one ETFs work and how to choose the right one for your portfolio.

What Is an all-in-one asset allocation ETF?

Most ETFs specialize in a single asset class. They might hold only stocks, only bonds, only commodities or even cryptocurrency. Asset allocation ETFs are different because they combine two or more asset classes into a single investment.

Most accomplish this using what is known as a "fund-of-funds" structure. Rather than purchasing hundreds or thousands of individual securities directly, the ETF owns other ETFs, each designed to provide a specific exposure.

For example, traditional 60/40 portfolios typically allocate roughly 60% to stock ETFs and 40% to bond ETFs.,

That's only the starting point, however. Asset allocation ETFs can vary considerably, depending on the underlying building blocks selected by the manager.

On the equity side, one portfolio might own broad market cap-weighted index funds, while another might deliberately tilt toward factors such as value, quality, momentum or low volatility.

Likewise, the bond allocation could consist of broad aggregate bond funds, Treasury-only ETFs, investment-grade corporate bonds or a combination of several fixed-income strategies.

Some of the more specialized asset allocation ETFs even incorporate alternative assets such as commodities or bitcoin.

What ties these funds together is their rebalancing process. Depending on the issuer, rebalancing might occur on a predetermined schedule such as monthly, quarterly, semi-annually or annually.

Others use tolerance bands, rebalancing only when an asset class drifts beyond a specified percentage away from its target allocation.

Regardless of the approach, their primary benefit remains the same: Asset allocation ETFs remove most of the ongoing portfolio management decisions from the investor's hands.

How we picked the best all-in-one ETFs

Comparing asset allocation ETFs on an apples-to-apples basis is difficult, because every provider has a different investment philosophy, portfolio mandate and selection of underlying funds.

Rather than attempting to rank one allocation strategy over another, we focused on a few core characteristics that we believe most long-term investors should prioritize.

First, every ETF we selected had to be globally diversified. The purpose of an asset allocation ETF is to provide broad diversification, not simply across asset classes, but across markets as well.

That means exposure not only to companies of different sizes, sectors and investment styles or bonds spanning different maturities and credit qualities, but also to developed and emerging international markets.

Market leadership rotates over time. While U.S. equities have dominated returns above much of the past decade, there's no guarantee that trend will continue indefinitely.

Second, we focused on funds offering a balanced mix of stocks and bonds rather than 100% equity portfolios.

Ultimately, the right allocation depends on an investor's time horizon and risk tolerance. However, balanced portfolios tend to occupy a practical middle ground, making them suitable starting points for a broad range of self-directed investors.

Finally, we placed a strong emphasis on costs. Asset allocation ETFs are typically somewhat more expensive than traditional index ETFs because they often hold other ETFs internally, resulting in layered portfolio management.

Even so, fees remain one of the few variables investors can directly control.

To keep costs reasonable, we required every ETF on our list to maintain an expense ratio of 0.40% or less. For a $10,000 investment, that translates into no more than approximately $40 per year in fee drag.

iShares Core 60/40 Balanced Allocation ETF

• Assets under management: $3.7 billion
• Expense ratio: 0.15%
• 30-day SEC yield: 2.6%

The iShares Core 60/40 Balanced Allocation ETF (AOR) is a straightforward asset allocation ETF built around the classic 60/40 portfolio, allocating approximately 60% of its assets to stocks and 40% to bonds. Rather than holding individual securities directly, the fund uses a fund-of-funds approach, investing in seven underlying iShares index ETFs.

On the equity side, investors receive broad exposure to the S&P 500, international developed markets, emerging markets and U.S. midcap stocks and small-cap stocks. The bond allocation is simpler, consisting primarily of a U.S. aggregate bond ETF alongside an international aggregate bond ETF.

The 60/40 portfolio has historically been one of the most widely used asset allocation strategies because combining stocks and bonds has generally reduced overall portfolio volatility while still allowing investors to participate in long-term equity growth.

Although both asset classes declined together when interest rates were rising in 2022, they have historically exhibited lower correlations over longer periods, allowing periodic rebalancing to systematically sell appreciated assets and add to those that have lagged.

The result is a portfolio with materially lower risk than an all-equity strategy. AOR currently has a three-year equity beta of 0.63 and a three-year standard deviation of 8.89%, both substantially below those of a typical 100% stock portfolio.

The ETF also trades with an exceptionally tight 30-day median bid-ask spread of just 0.01%, which further reduces the total cost of ownership for investors.

Learn more about AOR at the iShares provider site.

Capital Group Core Balanced ETF

• Assets under management: $7.1 billion
• Expense ratio: 0.33%
• 30-day SEC yield: 2.2%

Not every asset allocation ETF follows a rigid allocation such as AOR's traditional 60/40 split. Many, particularly actively managed strategies, give portfolio managers discretion to adjust the allocation between stocks and bonds as market conditions evolve.

The rationale is straightforward. Rather than mechanically maintaining a fixed allocation through every environment, managers can modestly overweight or underweight equities based on valuation, economic conditions, expected returns or their broader investment outlook.

While there's no guarantee that tactical asset allocation will outperform, it offers flexibility that purely rules-based strategies do not.

The Capital Group Core Balanced ETF (CGBL) is a good example. The ETF maintains a flexible mandate that generally allows from 50% to 75% of the portfolio to be invested in equities, with the remainder allocated to fixed income. Both sleeves are built primarily using underlying Capital Group ETFs.

Although the strategy maintains global diversification, its international allocation is more modest than some of the previous ETFs, with up to 15% of assets invested outside the U.S.

One distinguishing feature of Capital Group's ETF lineup is its multimanager system. Rather than relying on a single portfolio manager, each underlying ETF is managed by a team of investment professionals. While they collaborate and share research, each manager independently oversees a portion of the portfolio and makes their own investment decisions.

This approach seeks to diversify not only the underlying holdings but also the decision-making process itself.

Performance has been encouraging so far. Over the trailing one-year period, CGBL generated a 19.9% return based on net asset value. In the same period, its benchmark, a traditional 60/40 blend of the S&P 500 and the Bloomberg U.S. Aggregate Bond Index, returned 19.5%.

The outperformance is notable because CGBL achieved it after deducting its management fees, whereas the benchmark represents an unmanaged index with no associated investment expenses.

Learn more about CGBL at the Capital Group provider site.

Avantis Moderate Allocation ETF

• Assets under management: $78.1 million
• Expense ratio: 0.21%
• 30-day SEC yield: 2.3%

The traditional 60/40 portfolio provides a useful starting point for asset allocation, but in practice, many active managers deviate from that framework to reflect their investment philosophy.

Some make only modest adjustments, however, and the Avantis Moderate Allocation ETF (AVMA) is a good example. Despite being actively managed, the ETF uses a blended benchmark consisting of 65% of the MSCI ACWI IMI Index and 35% of the Bloomberg U.S. Government/Credit 1–5 Year Index. The portfolio is built entirely through a collection of underlying Avantis ETFs.

What distinguishes Avantis from many traditional index providers is its approach to stock selection. Rather than simply weighting companies according to market capitalization, Avantis incorporates factors that it believes can improve long-term expected returns.

These generally include tilts toward smaller companies, lower-value stocks and businesses with stronger profitability. The portfolio remains globally diversified, with exposure spanning both developed and emerging markets.

On the fixed income side, the largest allocation is a core aggregate bond ETF. However, Avantis also intentionally overweights short-term fixed income, helping reduce interest-rate sensitivity, while adding an investment-grade credit ETF that provides greater corporate bond exposure.

Performance has been encouraging. Over the trailing one-year period, AVMA delivered a 24.9% return based on net asset value, outperforming its blended 65/35 benchmark, which returned 20.8%.

Learn more about AVMA at the Avantis provider site.

State Street Global Allocation ETF

• Assets under management: $303.9 million
• Expense ratio: 0.35%
• 30-day SEC yield: 3.0%

The State Street Global Allocation ETF (GAL) also takes a more sophisticated approach to asset allocation than AOR. Rather than adhering to a rigid 60/40 stock and bond split, it operates within much broader allocation guidelines.

According to State Street, the ETF will typically invest around 60% of its assets in equities, but it also incorporates a tactical asset allocation component. This allows the portfolio managers to overweight or underweight equities relative to fixed income based on their assessment of the macroeconomic environment.

At present, the portfolio is allocated roughly 65% to risk assets and 35% to defensive assets, broadly corresponding to stocks and bonds. As its name suggests, GAL also maintains a global mandate. At least 30% of the portfolio must be invested outside the United States.

The underlying construction is also considerably more complex than AOR. Rather than investing in a small collection of broad market ETFs, GAL currently holds 18 underlying State Street ETFs. Even within individual asset classes, the exposures are more specialized.

On the fixed income side, investors receive allocations not only to U.S. and international aggregate bond markets, but also to senior loans, emerging market debt, high-yield corporate bonds, and Treasury Inflation-Protected Securities (TIPS). The portfolio also includes dedicated real estate exposure through both U.S. and international real estate investment trust (REIT) ETFs.

While GAL offers a higher 30-day SEC yield than AOR, its active management and more complex collection of underlying ETFs contribute to a 0.35% expense ratio. The ETF also trades with a wider, though still reasonable, 30-day median bid-ask spread of 0.08%.

Learn more about GAL at the State Street provider site.

Cambria Global Asset Allocation ETF

• Assets under management: $71.9 million
• Expense ratio: 0.40%
• 30-day SEC yield: 4.1%

The Cambria Global Asset Allocation ETF (GAA) is another example of an asset allocation ETF that goes well beyond the straightforward, largely passive approach taken by AOR. According to Cambria, this actively managed ETF follows an unconstrained, "go anywhere" global asset allocation strategy.

Rather than hugging a traditional benchmark, the portfolio managers have the flexibility to allocate across a universe of up to 30 underlying ETFs as they see fit. Despite that flexibility, the fund does maintain a target allocation. Under normal market conditions, Cambria aims for approximately 45% in equities, 45% in fixed income and 10% in alternative investments.

The underlying holdings include both Cambria ETFs and funds from other issuers. Within the Cambria lineup, investors gain exposure to strategies targeting the value and momentum factors, global real estate and shareholder yield. Cambria defines shareholder yield as a broader measure of capital returns that combines dividend payments with share buybacks and debt paydown.

One unique aspect of GAA is its fee structure. Technically, Cambria doesn't charge a separate management fee for assembling the portfolio. Instead, nearly all the ETF's stated 0.40% expense ratio comes from acquired fund fees and expenses. These are the expenses charged by the underlying ETFs that GAA owns.

In other words, investors indirectly pay the operating expenses of the component funds rather than an additional layer of management fees charged by Cambria itself. This helps avoid an extra layer of fees on top of the underlying ETFs, although the acquired fund expenses still represent a cost that ultimately reduces investor long-term returns.

Learn more about GAA at the Cambria provider site.

Related content

• The Best Defensive ETFs to Protect Your Portfolio
• The Best Aerospace and Defense ETFs to Buy
• The Kiplinger 25: Our Favorite No-Load Mutual Funds

Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers who are still awaiting their tax refunds and problems with calling the IRS. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Delayed refunds

Question: I electronically filed my 2025 Form 1040 in early April and still haven't received my refund. I received an IRS letter saying my return is under review and that it can take up to 60 days for the agency to process. I checked the IRS website, and it also says my return is under review. What can I do to speed up my refund?

Joy Taylor: We wrote in our last Kiplinger Tax Letter that the 2026 filing season has gone smoothly for most taxpayers, and most filers received their refunds without delay. We also said that despite this, some taxpayers face challenges and have been waiting months to receive their refunds. This group includes victims of identity theft, filers who make errors on their returns, taxpayers whose returns were selected by IRS computers for further review and others. Unfortunately, it appears that you fall within this second group.

My suggestion would be to continue waiting for your refund. The IRS's processing of returns under review is going very slowly, likely because the IRS has lost many of its workers, including those who work in taxpayer assistance. You can try to call the IRS, but you may face a long phone wait time and might find it hard to reach a live person.

• IRS's automated refund hotline phone number is 800-829-1954
• IRS's main phone number is 800-829-1040

If your delayed refund is causing you financial hardship, you might want to contact the office of the IRS's Taxpayer Advocate Service.

2. Erroneous IRS letters

Question: We timely filed our 2025 Form 1040 earlier this year. The IRS sent us a notice adjusting one of the line items on our return. We believe that the IRS made an error. We have tried calling for weeks at all different times and we usually get a recording to call another time. There doesn't seem to be an email we can use. Is there any help you can give us?

Joy Taylor: The IRS has overall operated a successful 2026 filing season, but there are exceptions. And one of those involves the agency's handling of correspondence. The notice you received from the IRS was likely automatically generated. But the IRS doesn't have enough employees to respond to questions that taxpayers have about those notices once they receive them.

There's not much you can do. I suggest continuing to call the IRS. If the agency's mistake is causing you severe financial hardship, then you might want to contact the IRS's Taxpayer Advocate Service for help.

3. Late refunds

Question: I filed my 2025 federal tax return in March, and I am expecting a large refund. I received a letter from the IRS in late April, saying that the IRS was reviewing my return. I haven't received any communication from the IRS since that letter, and I still haven't received my refund. I checked with my tax return preparer, who indicated that many refunds have been late this year. Do you know anything about this?

Joy Taylor: You are not the first reader that I have heard from who is facing a tax refund delay. Unfortunately, because of lack of staffing at the IRS and other factors, some taxpayers have been waiting months to receive their refunds.

You can try calling the IRS, but reaching a live person might be difficult. If your refund delay is causing you financial difficulty, you can contact your IRS Taxpayer Advocate Service office. If the delay continues, you might think about calling your U.S. representative to Congress. Sometimes, a staff member there can be helpful and move things along more quickly then you just waiting for your refund.

There is one small bright side to this. The IRS is required to pay you interest on your delayed refund, so when you eventually see the money, it should be higher than your refund amount.

4. Refund in the form of a paper check

Question: I have a bank account, but I don't like using it for electronic payments or receipts. I filed my 2025 Form 1040, which claimed a refund. I didn't include my bank account information on the return because I want to receive my refund as a paper check. I got a letter from the IRS asking for my bank account information. I didn't respond, and I still don't have my refund. What can I do if I still want a paper check?

Joy Taylor: The IRS is in the process of phasing out paper refund checks in accordance with President Trump's March 2025 executive order. Individuals who request paper refund checks when filing their Form 1040 are seeing their refunds delayed. The IRS mails letters to filers whose 1040s claim a refund but omit bank account details for direct deposit. These notices ask the filers to supply their bank account information within 30 days or say why they can’t. I am guessing this is the letter that you received from the IRS.

You said that you didn't respond to the IRS notice. That's OK. You will eventually get your refund check in the mail, but it can take time. The IRS says it will issue a paper check to nonresponders six weeks after the date it sent the original notice. However, this timeframe can also be subject to delays, as is the case in your situation. I would suggest continuing to wait. You can also check the "Where's My Refund" tool on the IRS's website to see if there is any more information.

About Ask the Editor, Tax Edition

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

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

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

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Tax Basis in Inherited Property
• Ask the Editor: Deductions for Self-Employed Retirees
• Ask the Editor: 10-Year Rule for Inherited IRAs
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A growing number of Americans are worried that higher taxes in the future will erode their income in retirement. Yet few people who express this concern are adjusting their financial plans to help meet the challenge.

That’s the conclusion of two recent surveys by financial services companies.

According to an Allianz Life study earlier this year, 70% of Americans are now concerned about the impact of taxes on their income once they stop working, up from 66% in 2025. Gen Xers, on the cusp of retirement at ages ranging from 46 to 61, are the most fearful, with nearly 80% of them sharing this concern.

Yet, as a Nationwide Retirement Institute survey found, only 31% of investors who expect taxes to rise are taking steps to manage their finances accordingly.

"Taxes continue to be in flux, and finding the right strategy to help maximize your retirement income is definitely key," says Kush Kotecha, president of Nationwide Annuity.

Although federal tax rates are currently at historically low levels, the massive budget debt and coming solvency problems for Social Security and Medicare have heightened fears that taxes will head up.

"We cannot continue like this," says Kelly LaVigne, vice president of consumer insights for Allianz Life Insurance.

To minimize the bigger bite of income that higher taxes in retirement could take, experts suggest these steps:

Invest tax-efficiently.

Outside of tax-advantaged retirement accounts such as 401(k)s and IRAs, interest on U.S. government and corporate bonds and short-term capital gains (profits on the sale of assets held for a year or less) are taxed as ordinary income, with rates as steep as 37%.

But the top rate for long-term capital gains is only 20%, and the rate is 0% this year for taxable income below $49,450 for singles and $98,900 for married couples filing jointly.

Actively managed mutual funds tend to trade stocks often, causing their investors to owe short-term and long-term capital gains taxes, but index funds and exchange-traded funds make far fewer transactions, reducing their tax liabilities.

You can also seek out actively managed funds whose mission is to be tax-efficient, or you can put some money in municipal bonds and muni funds, which are generally exempt from federal taxes — and sometimes from state income taxes, too.

Consider a Roth conversion or a Roth IRA.

You’ll pay income taxes now on the amount you convert or invest, but you won’t owe taxes on withdrawals in retirement, when your liability could be higher if rates rise.

"Paying taxes ahead of time isn’t necessarily a bad thing," says LaVigne.

Take RMDs on time.

You must begin making required minimum distributions from traditional 401(k) plans and IRAs beginning at age 73 (age 75 starting in 2033), and your RMD can push you into a higher tax bracket and lead to higher taxes on Social Security benefits.

That may hurt, but so will the penalty for failing to follow the rules: You’ll owe up to 25% of the amount you should have withdrawn.

A Vanguard study of clients 73 and older with traditional IRAs found that about 7% failed to take their RMDs in 2024, and 24% took out less than the required amount. More than half who miss RMDs in one year miss them the next year as well.

Be generous.

After age 70½, you can make a qualified charitable distribution, or QCD, from money in a traditional IRA — up to $111,000 in 2026.

That amount won’t be included in your adjusted gross income, so it won’t be subject to taxes. QCDs after age 73 can satisfy some or all of your RMD, too.

Stash cash in a HSA.

If you’re not yet on Medicare and have a high-deductible health insurance plan, consider contributing to a health savings account.

You’ll be able to lower your taxable income, the funds will grow tax-deferred, and withdrawals for medical expenses are tax-free. Says LaVigne, "An HSA is one of the best deals on the planet."

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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Summer vacations are something many families look forward to every year, but the summer of 2026 could hit your wallet hard.

Higher gas prices are just one of the issues leading to more expensive plane tickets and road trips.

This year, if travel plans require a flight and lodging, you can expect to spend almost $4,000 before even arriving at your destination, according to a report from NerdWallet. And more than a third of the travelers who put their vacations on credit cards last year are still paying them off.

With costs even higher this year, how can you plan a summer vacation without throwing off your financial goals?

1. Build a budget

First and foremost, you should fully understand the cost of your vacation ahead of time. Before you choose a destination, understand how much you can afford for the trip as a whole.

Once you have your spending limit, start pricing out each individual expense, such as airfare, hotel, gas, food or entertainment. Many travelers don't plan out their spending limits before they leave, which can lead to debt that you carry long after your trip.

Allocate your budget to what is most important to you and your family. Are you a family that values a really nice hotel or something more budget-friendly? Are you focused on experiences such as excursions or dining out?

Creating a budget isn't about restriction or telling yourself to pull back on the fun. It is about creating a spending plan that focuses on what you value the most and what will help create the most lasting memories.

2. Manage spending

While creating a budget is a great way to take a bird's-eye view of what this trip will cost you, what will your individual spending plans be for the days you are there?

My recommendation is that you carry only the amount of money you have given yourself to spend each day. This way, you know when the cash is gone, you have reached your limit.

Of course, there might be some instances where you'll have no choice but to use a credit card, depending on where you are and what you're doing.

But don't be tempted to put expenses on a credit card that you may not be able to pay off. Try to use credit cards only for emergencies. They can be a secure way to spend money, especially overseas, but it's easy to overspend using them.

Look for easy ways to lower your spending:

• Take advantage of continental breakfasts and try to avoid the hotel restaurant. It's often a lot more expensive than the restaurant down the street.
• Instead of dining out for every other meal, consider spending extra money on one or two memorable dinners and look for more affordable options the rest of the time.
• If your vacation includes trips to an amusement park such as Disney World, consider packing snacks and water bottles to bring with you. This will help reduce impulse purchases throughout the day.

Just like you did with your overall budget, decide what is most important to your family. Pick the few attractions or souvenirs you absolutely need to spend money on. You may not be able to afford every single one, but having a priority list will help you decide what is best.

3. Plan for next year

One of the biggest mistakes you can make is putting your entire vacation on one credit card and telling yourself you'll figure out how to pay it off later. Look into the benefits of having a dedicated vacation fund and making monthly deposits into it throughout the year.

Breaking down a $3,000 vacation into 12 separate deposits of $250 seems much more realistic and manageable than paying for it all at once. A financial planner could help you set up a high-yield savings account that is specifically used for travel expenses.

4. Don't forget about the ultimate vacation: Retirement

Planning for your summer vacation is fun, but don't let that excitement take away from your plans for the ultimate vacation: Retirement. Prioritizing saving for your future will help you enjoy your golden years without worrying about running out of money.

I often recommend that you save 10% to 15% of your income if you plan to keep your current standard of living in retirement. A good goal is to have more than 10 times your annual salary saved by the time you retire.

But that number varies from person to person, depending on your unique situation. Sit down with a financial professional to determine how much money you need for retirement.

While summer vacations are more expensive than they were just five or six years ago, that doesn't mean you have to skip them. With strategic planning, it is possible to enjoy a great vacation without setting yourself up for a failing financial future.

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

Carlos owns two parcels on the south side of McAllen, Texas.

The first parcel is located in a Qualified Opportunity Zone, one of the original tracts the federal government designated in 2018. That designation expires on December 31, 2026. Less than six months from now, the line on the map vanishes.

The second parcel, three miles north, is located in a Census tract that didn't make the cut in 2018. But under the new eligibility rules signed into law last summer, that second tract just became eligible for OZ 2.0, and Carlos' governor has until late September 2026 to nominate it, or not nominate it, or pick a different tract entirely.

Carlos can't develop both parcels. He has one window of construction capital, and he needs to put it where the next decade of tax-advantaged capital will flow.

He needs to read the tea leaves. So do you.

Key dates for the 2026 governor OZ 2.0 nomination window

The Opportunity Zone program was made permanent by the One Big Beautiful Bill Act (OBBBA) on July 4, 2025. That's the good news. The complicated news is that every Opportunity Zone designation in America is refreshed every 10 years, and the first refresh is happening right now.

Here's the timeline you need to memorize.

The 90-day designation window opened on July 1, 2026, and runs through September 28, 2026. During that window, every state governor is submitting their nominations to the U.S. Treasury Department. The IRS published Revenue Procedure 2026-14 in April, spelling out exactly how the process works.

Treasury will certify the nominations late in 2026. The new Opportunity Zones take effect on January 1, 2027, and run for 10 years through 2036.

Once that map is set, it's set. Nobody is going to add your tract in March 2027 just because you missed the deadline.

So the question isn't whether your governor is making this decision. The question is whether you know which way they're leaning.

OZ 2.0 vs OZ 1.0: Eligibility changes every investor should know

Before you can guess the map, you have to understand the rules your governor has to follow.

The first big change: The income threshold dropped. Under OZ 1.0, a tract was qualified if its median family income was at or below 80% of the state or metropolitan median. Under OZ 2.0, that threshold drops to 70%. The bar is higher, the field is smaller.

The second big change: The contiguous tract provision is gone. In 2018, governors could include a tract that didn't meet the income test as long as it sat next to a qualifying tract. That loophole stitched together some of the most lucrative zones in the country. It's closed now.

The third big change: There's a new anti-gentrification trigger. A tract is disqualified if its median family income exceeds 125% of the state or metropolitan median. If your neighborhood has already been gentrified between 2018 and 2024, congratulations, but you're probably not getting another OZ designation.

The fourth major change is the rural carve-out, which is significant enough to deserve its own section below.
Net result: Under OZ 2.0, the eligible pool of tracts is about 25% smaller than it was under OZ 1.0. Your governor is making harder choices with fewer chips.

Qualified Rural Opportunity Funds: How the basis step-up works

The biggest structural shift in OZ 2.0 favors rural America. Tracts that qualify as "rural areas" under the new statute unlock a supercharged set of benefits. Investors in a Qualified Rural Opportunity Fund (QROF) get a 30% basis step-up after five years, triple what urban OZ investors receive.

And the "substantial improvement" threshold drops from 100% to 50%, meaning rural developers can renovate properties with half the capital outlay they'd need elsewhere.

That 50% rural threshold went into effect the day the law was signed, July 4, 2025. It's already in play.

For governors with significant rural economies, this is a strong incentive to lean rural in their nominations.

For investors, it offers a fundamentally better economic profile than urban OZ 2.0: A higher step-up, a lower improvement bar and the same 10-year tax-free appreciation.

Lessons from the 2018 OZ designations: What to expect in 2026

We aren't completely flying blind. The 2018 round gave us a behavioral road map.

The average OZ designated in 2018 had a 31% poverty rate, well above the 20% statutory threshold. The average tract had income at 59% of the median area, significantly below the 80% cap they could have used. Governors weren't pushing the edges. They were picking distressed tracts with project pipelines.

The contiguous tract provision, the loophole that's now closed, got used in only about 2.6% of designations. Most governors didn't lean on it.

But here's the pattern that should grab your attention: By 2022, 75% of all OZ investment had gone to urban areas, even though 45% of zones were rural. And 75% of the total investment had been allocated to real estate, mostly residential. About one-third of OZ tracts received zero outside investment over the entire program.

So governors had two failure modes in 2018: They picked tracts where capital never showed up, and they overindexed on urban projects at the expense of rural communities that Congress intended to help.

This time, with rural super-incentives baked into the statute and a smaller eligible pool, expect a meaningful pivot. Governors who got criticized last round for "rich neighborhood" picks will be more cautious. Governors with significant rural economies will lean rural.

How Texas, Washington and other states are running their OZ 2.0 nominations

Different states are running different processes.

In Texas, the governor's Economic Development & Tourism Office asked local economic development organizations and county judges to submit eligible tracts by June 26, 2026. The state is now finalizing its list and intends to send picks to Treasury by August 3. The state is selecting on three criteria: Clear federal eligibility, demonstrable local support, including incentive packages and project viability within 24 to 48 months.

That third criterion is your biggest signal. Texas is picking tracts where private capital is genuinely about to deploy. If your county has a master plan, a TIF zone and a developer with a financed project pipeline, you're in the running. If your county hasn't submitted anything? You're not.

Washington state is publishing its draft application and scoring criteria publicly. New Mexico has spelled out exactly when its final tracts will be locked in. West Virginia plans to submit by late September. Some states are running stakeholder processes you can participate in right now.

In 2018, California revised one-fifth of its nominations after public feedback. Pennsylvania accepted recommendations covering 61% of eligible tracts. The states that ran transparent processes ended up with more deployable maps.

If you want a tract designated, the time to be in the room is this summer, while the governor is still finalizing, not October, after the map is locked.

How investors can influence OZ 2.0 tract selection: A four-step action plan

Carlos has about three weeks until Texas locks its list and sends it to Treasury on August 3. Here's the playbook, and it applies whether your state's window is still open or, like Texas, is down to the final days.

Identify which Census tracts within your project area are eligible under the new rules. Both Novogradac and the Economic Innovation Group publish free interactive mapping tools that overlay the 2020-2024 American Community Survey data that Treasury is using.

Find out whether your local economic development organization has already submitted your preferred tract. If yes, great. If not, you have an urgent phone call to make this week, not next month.

Document your project pipeline. Treasury isn't going to read your business plan, but your governor's office is. The states with the cleanest project documentation are getting the most credibility on their nominations.

Watch what doesn't get nominated (this is the part most investors miss). Tracts that are eligible but ignored become public information once states publish their submissions. Some of those tracts may become opportunities in the next 10-year cycle if conditions shift.

Planning for the December 31, 2026, OZ 1.0 deadline and the OZ 2.0 transition

The end of OZ 1.0 isn't an exit from this strategy. It's a transition.

Investors who deferred capital gains into OZ 1.0 funds have a hard recognition date on December 31, 2026, with the tax bill coming due in April 2027. That's a separate planning problem worth its own conversation with your investment adviser.

But the runway ahead is longer than the runway behind. OZ 2.0 isn't a sunset. It's a permanent program with a rolling deferral, enhanced rural benefits and tightened eligibility, focusing capital where it can do the most good.

The investors who win the next decade aren't going to be the ones who watch the map. They're going to be the ones who help draw it.

Carlos has three weeks. So do you.

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• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells
• This High-Performance Investment Vehicle Can Move Your Wealth Up a Gear

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.

There is a line I hear from women constantly, and it usually sounds harmless at first.

"Oh, he handles all that."

The investments, taxes, retirement accounts, loans, insurance policies, passwords…

"He handles it."

And honestly? I understand how it happens.

Life gets busy. Careers take off. Kids need rides. Aging parents need help. One person in the relationship naturally gravitates toward financial management, and the other slowly steps away from the details.

It feels efficient. Logical, even. Until life changes.

Lately, this conversation has exploded again because of Belle Burden's bestselling memoir, Strangers. The book struck a nerve with women everywhere because underneath the divorce story is something much bigger: What happens when a smart, accomplished woman slowly disconnects from her own financial life.

Let's be clear: This is not about blaming women.

Some of the smartest, most successful women I know fall into this dynamic. Lawyers, executives, entrepreneurs, physicians. Women with graduate degrees and thriving careers.

This is not an intelligence issue. It is a participation issue.

As a financial adviser and Certified Divorce Financial Analyst (CDFA), I have watched too many women discover, during divorce, widowhood or financial crisis, that they do not fully understand what they own, what they owe or even how their accounts are structured.

That realization is terrifying.

The good news is that you can take the reins at any moment. You do not need to become a tax attorney overnight. You do not need to memorize investment jargon or start day-trading stocks.

You simply need to start participating.

Here are five financial truths every married woman should know.

1. Know your numbers

Every account. Every debt. Every insurance policy. Every password.

I cannot tell you how many times I have sat across from someone who did not know how much was in the retirement accounts, whose name was on the brokerage account or where the life insurance policies were located.

Most of the time, people assume everything is fine.

And often, it is. Until it is not.

Set aside one evening this month and create a complete financial inventory:

• Bank accounts
• Retirement accounts
• Credit cards
• Mortgage balances
• Insurance policies
• Estate documents
• Beneficiary designations
• Advisers' contact information

Store it somewhere secure.

This is not about distrust. It is about awareness.

Knowing your finances does not make you cynical. It makes you an adult participant in your own life.

2. Keep your own financial identity

This one especially affects women who step away from the workforce to raise children or care for family members.

Over time, many women slowly lose their independent financial footprint. Their credit history weakens. Their income history disappears. Accounts shift into joint ownership.

Then suddenly, after divorce or widowhood, they try to apply for a mortgage or credit card on their own and are treated like they have no financial history at all.

It is one of the most demoralizing things I see.

And have felt.

It happened to me. I had no credit after my divorce. Miraculously, I managed to get an Express credit card from the women's clothing store. So, I bought one shirt. And then I paid it off. Then I bought two shirts and paid them off. And so on. It took a minute, but I built my credit back.

Keep at least one credit card in your own name. Use it responsibly. Monitor your credit score regularly.

And understand this: Unpaid caregiving labor absolutely has value. Raising children and supporting a household are enormous contributions.

Unfortunately, the financial system does not always recognize this invisible labor, so you need to protect your own paper trail.

3. Understand what you own and how you own it

This is where people's eyes usually glaze over, but this issue can cost families hundreds of thousands of dollars.

How an asset is titled matters enormously.

Inherited money, trust assets and family property can lose their protected status if they are commingled improperly or retitled jointly.

For example, depositing inherited funds into a joint account or adding a spouse's name to inherited property can unintentionally transform separate property into marital property, depending on state law

Many women are shocked to learn this after the fact.

Before adding anyone's name to major assets, speak with a financial adviser, CPA or family law attorney. Five minutes of planning upfront can save years of legal and emotional pain later.

4. Have money conversations early

Nobody wants to discuss finances before marriage. It feels awkward and unromantic. But avoiding money conversations does not eliminate financial problems. It simply delays them.

Financial secrecy is one of the biggest sources of stress I see in relationships. Couples need to discuss:

• Debt
• Spending habits
• Credit scores
• Financial goals
• Investment philosophies
• Expectations around work and caregiving

Prenuptial agreements are not always about expecting divorce. Sometimes they are simply about transparency and clarity.

And if you are already married, it is not too late. Have regular "money dates." Talk openly about finances before problems arise. (I have a takeaway on my site to help start the conversations.)

5. Build your financial team before you need one

Too many women only seek financial help in a crisis. By then, emotions are high, options may be limited, and costly mistakes may already have happened.

Every woman should have access to:

• A financial adviser
• A CPA or tax professional
• An estate planning attorney

During divorce or major life transitions, a CDFA can be invaluable in helping analyze long-term financial implications.

Most importantly, understand this: Financial independence is not about preparing for divorce.

It is about confidence.

It is about knowing that no matter what life throws at you — career changes, caregiving, widowhood, reinvention or unexpected loss — you can sit at the table and fully understand the conversation.

That changes everything.

Because the women I worry about most are not necessarily the women without money. They are the women who are not paying attention to the money they already have.

And that is a problem we can fix.

Related Content

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• When Divorcing, What Financial Specialists Do You Really Need?
• I'm a Financial Planner: This Is How Smart Women Can Plan for Financial Freedom Despite Life's Curveballs
• A Financial Adviser's Guide to Divorce Negotiations: Civil — or Not
• A Financial Adviser's Guide to Divorce Finalization: Tying Up the Loose Ends

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

Most business owners know they need capital to grow. Far fewer know how many doors are actually open to them — or that their bank's rejection letter is often the beginning of the conversation, not the end.

Through many years of setting up business financing deals in a wide variety of sectors including commercial, manufacturing, healthcare, hospitality and real estate, I have seen some of the most capable entrepreneurs forgo countless opportunities that could have made them millions due to a simple lack of awareness about where to find money and how to secure it.

Why your bank said no (and why that's not the whole story)

Traditional banks are extremely risk-averse entities. These entities are run according to strict regulation requirements and have to see at least three years of solid performance, a large amount of collateral and no problems in either the business or its owner's credit.

If your business is new, operates in an unstable market or is undergoing some transformation — for instance, an ownership change, sudden growth or loss-making period — then the bank algorithm will red-flag your application even before your file gets reviewed by a person.

This does not mean that your business is not creditworthy, just that it operates outside of the risk tolerance box of that particular bank. The world of commercial lending is much larger than a few big banks.

A map of the commercial lending landscape

Understanding your options starts with understanding who lends what — and why. Here's a practical breakdown:

SBA loans (7(a) and 504 programs). These remain the gold standard for businesses that can qualify. SBA 7(a) loans go up to $5 million and can be used for nearly any business purpose.

The 504 program is purpose-built for major fixed-asset purchases — equipment and commercial real estate — and often features below-market interest rates. The trade-off is time: SBA loans involve significant documentation and can take 60 to 90 days to close. If you have the runway, they're worth pursuing.

Non-bank commercial lenders. This category includes credit funds, debt funds and private commercial lenders who operate outside the traditional banking system.

They move faster — often closing in two to four weeks — and are generally more flexible on deal structure, collateral types and borrower profile.

Rates are higher than bank rates, but for many borrowers, the speed and certainty of execution more than justify the premium.

Revenue-based and asset-based financing. For businesses with strong receivables or recurring revenue but thin equity, asset-based lending (ABL) and revenue-based financing offer a compelling alternative.

Instead of underwriting your credit profile, the lender underwrites your assets — your invoices, inventory, equipment or contracts.

A distribution company with $3 million in outstanding invoices may qualify for a $2 million revolving line of credit even if its balance sheet looks modest.

Factoring and invoice financing are subsets of this category and work especially well for B2B businesses with long payment cycles.

Industry matters more than you think

The often-overlooked variable in business lending is industrial specialization. Often, lenders have niches in which they can operate to their advantage since they have ample experience and already know what to expect.

For example, one who has lent money to 50 car washes knows all about them from the economic point of view better than a generic lender.

Industries with active, specialized lending markets include:

• Healthcare and medical practices (including dental, veterinary and behavioral health)
• Franchises (many lenders maintain franchise brand registries that fast-track approvals)
• Commercial real estate and mixed-use development
• Trucking, logistics and fleet operations
• Hospitality, hotels and food service
• Manufacturing and industrial equipment
• Professional services (law firms, accounting firms staffing agencies)

You can visit US Professional Funding's website and US Medical Funding's website for more information on these industries. (I am the vice president of Business Development at both US Professional Funding and US Medical Funding.)

When you're seeking capital, your industry isn't just a detail on the application — it's a primary filter for which lenders are most likely to say yes.

The five things lenders actually look at

Commercial underwriting is more nuanced than personal credit, but it follows a consistent logic. Most lenders evaluate five core factors, sometimes called the Five C's of Credit:

Cash flow. Can the business service the debt from operating income? Lenders typically look for a debt service coverage ratio (DSCR) of at least 1.25x — meaning the business generates $1.25 in net operating income for every $1 of annual debt payments. Know your number before you apply.

Collateral. What assets secure the loan? Real estate, equipment, inventory and receivables all carry value on a lender's balance sheet. Even if you're cash-flow positive, lenders want a secondary repayment source.

Capital. How much equity does the owner have in the business? Lenders want to see skin in the game. A highly leveraged business with minimal owner equity is a harder credit story.

Conditions. What are you using the funds for, and does the use make business sense? Expansion into a new market is a different risk than covering operating losses.

Character. Your credit history, your track record and the people running the business. Personal credit scores above 680 are generally the floor for most commercial lenders; 700-plus significantly broadens your options.

How to prepare before you apply

The single biggest mistake business owners make is approaching lenders unprepared. A strong loan package doesn't just improve your odds — it dramatically shortens your timeline and often secures better pricing.

Here's what to assemble before you start:

• Two to three years of business tax returns (and personal tax returns for any owner with 20%-plus ownership)
• Year-to-date profit and loss statement and balance sheet, prepared by a CPA
• Three to six months of business bank statements
• A one- to two-page executive summary of your business and the purpose of the loan
• A debt schedule listing all existing loans and obligations
• Documentation of collateral (appraisals, equipment lists, accounts receivable aging)

If your financials show a challenging year, don't wait for the lender to ask about it. Write a clear, factual explanation — an addendum or letter from your accountant — that addresses what happened and why the business is positioned for stronger performance going forward. Lenders respect transparency. They don't like surprises.

The bottom line

Access to capital is one of the most powerful levers a business owner has — for growth, for acquisition, for weathering downturns and for building enterprise value. The commercial lending market is deeper and more flexible than most owners realize.

Your next step: Pull your last two years of tax returns and your most recent financial statements. Calculate your DSCR. Get clear on what you're asking for and why. Then have a conversation with a lender or broker who specializes in businesses like yours — not just the bank where you have your checking account.

The capital is there. The question is whether you've positioned yourself to access it.

The information provided in this article is for educational purposes only and does not constitute financial advice. Loan availability, terms and eligibility vary by lender, borrower and transaction. Consult with a qualified financial or lending professional regarding your specific situation.

Related Content

• Five Key Wake-Up Calls for Ambitious Business Owners, From a Biz Specialist
• For Business Owners, Estate and Exit Planning Join Forces
• 4 Retirement Risks Business Owners Often Overlook
• 5 Actions to Set Up Your Business With Your Exit in Mind, From a Wealth Adviser
• The Four Worst Mistakes to Make When Selling Your Business

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

If you get a text message claiming to be from the IRS this week, your first instinct is probably to delete it and block the number.

And that's usually smart. After all, the IRS famously warns that it "will not contact [you] by text message or social media."

But dropping the hammer too quickly might cause you to miss a legitimate government notification — or, worse, an alert that a scammer is trying to compromise your tax data. (According to the U.S. Congress Joint Economic Committee, almost 25% of Americans have reported being victimized by tax scams, including spoofed text messages and QR codes.)

Adding to the confusion is the fact that the IRS can now text you. In recent years, the federal tax agency has introduced three very specific reasons it will text your mobile phone, and one glaringly obvious reason it still won’t.

Here's how to know who's on the other side of that "message received" prompt.

The IRS rolls out text messaging

The IRS only began rolling out SMS text messaging in the last eight years or so. Things like opt-in account updates, initiated system reminders, and requested callback confirmations that may have required paper letters or wait times in the past may now land in your digital inbox.

However, there are two important caveats to receiving an IRS text message.

First, the IRS will only text you if you opt in. Second, the federal tax agency uses strict, dedicated short codes to send texts to your phone.

So if you receive a text claiming to be from the IRS via a standard 10-digit phone number, it's likely a fake. Legitimate short codes are below:

• Short code 91040: Used for official IRS news bulletins (like changes in the tax code), appointment reminders, account notifications, and one-time security codes.
• Short code 34381: Reserved for IRS customer service callback reminders.

(Note: While these are the primary codes deployed by the agency, the list may expand as digital services evolve.)

Furthermore, receiving an unexpected short-code text — like a sudden two-factor authentication code you never requested — doesn't necessarily mean the message itself is inherently fake. Instead, it might be a sign that a hacker is attempting to breach your online IRS portal account.

Never give that security code to any individual, even if they claim to be an IRS agent. If you suspect fraudulent activity, log directly into your IRS portal to check your account status.

To help keep your identity and wallet safe, here are three key reasons you might receive a text claiming to be from the IRS, and one reason you won't.

1. You subscribed to IRS news bulletins

Not many people realize you can subscribe to direct IRS communications and receive a text message.

Everything from new tax law regulations (like those governing the recently launched Trump Accounts) to IRS criminal investigation tax case highlights can be delivered right to your inbox.

Taxpayers initially subscribe to these notifications via email (usually coming from irs@service.govdelivery.com). However, the IRS system allows you to opt in to text alerts as well, as demonstrated by this snapshot of a Tax Stats Dispatch Mailing List email sent from the IRS:

If you decide to receive IRS bulletins via text, the updates will always originate from the secure short code 91040. A different number delivering the tax law updates is likely a phishing attempt designed to steal your credentials.

2. You have an upcoming IRS appointment

When you schedule an in-person meeting at an IRS Taxpayer Assistance Center (TAC), you can opt in to receive text confirmations and scheduling updates about that appointment.

The IRS will also text you a notification once you're checked in at the building or when it is your turn to be seen (a screenshot of what an appointment reminder may look like can be found on Reddit).

Just like news bulletins, these automated operational texts will come from short code 91040.

However, scammers can use fake IRS appointment reminders to trick you into "confirming your appointment" by clicking a link or handing over personal or financial information.

To play it safe, never click a text link. Instead, log directly into your secure IRS online account to verify your appointment status. If you're still unsure, call the IRS customer service line directly at 1-800-829-1040 to double-check your appointment time.

3. You requested an IRS callback

Holding on the line for an IRS agent can feel grueling. According to the Taxpayer Advocate Service, taxpayers this past filing season had more difficulty reaching the federal tax agency than last year, with an average reported wait time of 14 minutes (up from 8 minutes). Only about 21% of calls were answered by an agent.

To alleviate the gridlock, the IRS offers a digital callback service for select high-volume phone topics, like refund inquiries and how to pay the IRS if you owe taxes. So instead of waiting on hold, you can opt in to receive a text when an agent is ready to call you back.

These text alerts generally only come from short code 34381.

But as you might've guessed, scammers can take advantage of this method as well.

Potential fraudsters can impersonate the IRS callback service to gain your trust before trying to extort personal information or demand immediate payment.

You can typically verify the text by its timing: the message should arrive within a predictable window after you personally initiated a call to the IRS. If you get a random "callback" text out of the blue, it's probably a red flag.

The one thing the IRS will never text you

Although the IRS will text you for administrative and scheduling updates you opt into, the federal tax agency will never initiate a text message demanding payment.

The hallmark of a text tax scam is typically a claim that you owe back taxes, have an "unclaimed refund" waiting to be deposited, or must urgently click a link to "fix" a suspended account, per the IRS' latest Dirty Dozen report (an annual list of the current tax scams).

And if an unsolicited message lands on your phone offering "free tax advice," demanding your Social Security number, or asking you to scan a QR code, do not engage. Instead, take a screenshot (or copy the text) and forward it to phishing@irs.gov with the following information.

• Subject line: "Text."
• Sender's phone number and your phone number
• Date, time, and time zone received.

Then forward the text to 7726 (SPAM) to alert your mobile carrier and delete the message.

Stay alert.

Read More

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