I'm sitting on the sofa in my office, which is in Virginia. Looking out the window, I can see both Virginia and Maryland. There's an often-incorrect assumption that when you cross the bridge from Virginia into Washington, D.C., your taxes jump. The reality is much more complicated.

Income taxes, which is how we often gauge whether taxes are "high" or "low," do go up if you move into D.C. But property taxes come down. So, if you're retired, you may actually be better off in D.C.

However, D.C. has an estate tax, and Maryland has an estate and an inheritance tax, so depending on your balance sheet, you may be better off staying in Virginia. You can see how things can get complicated quickly.

My goal in this article, as a CFP® and president of Exit 59 Advisory, is to help you avoid making a big decision on where you move in retirement for tax purposes — which I think is often a mistake in and of itself — without understanding the full tax picture.

Five taxes to consider

1. Income tax

You've heard of people moving from California to Texas. We have several clients in the process of changing residency from New York to Florida. This isn't because Texas has delicious BBQ or because Florida has Publix. It's typically because folks want to ditch the income tax. While this is almost always the most consequential tax when you're working, that isn't always the case for retirees.

Nine states don't tax earned income. However, like the federal government, most states do have a progressive income tax, where the rate rises with your income. Be sure you understand that progression and what effective or average rate you're likely to pay.

When we have a relocation in retirement in a client's financial plan, it becomes pretty clear what will happen to their income, capital gains and estate taxes, all else being equal. We recently had a client moving from California to Texas and were able to tell them how much money they would save, and therefore, could spend elsewhere. We used specialist software to do that, and you can use our subscription to access it for free.

2. Capital gains tax

Capital gains rates are more favorable than income tax rates at the federal level as a way to incentivize investment. The same cannot be said about state treatment of capital gains.

In most states that levy an income tax rate, the same rate is applied to capital gains. When my parents sold their (not so) forever home in Maryland, it basically looked as though the capital gain was income. It was taxed at the same rate.

There are some notable exceptions. Washington state, for example, doesn't have an income tax but does have a capital gains tax. If your savings are all in retirement accounts, you don't have too much to worry about. But let's say you sold a business and almost all your assets are in non-retirement accounts. For you, Washington state may not be a good tax destination.

3. Sales tax

I'm a (perhaps too) proud graduate of the University of Delaware. Delaware is often referred to as the "tax-free state." Incorrect. Delaware doesn't have a sales tax. It does have income and property taxes, though those property taxes are extremely low by the beaches. Take notes, Florida.

Sales taxes are more straightforward, except that there are adjustments on certain types of purchases. Like to eat out? Then Washington, D.C., is no good. To be clear, the food is good. Like to drink? Avoid Washington state.

4. Property taxes

You might be unpleasantly surprised when you arrive in Texas for the BBQ or Florida for the Publix, and you're presented with a massive property tax bill. As the saying goes, "There's no such thing as a free lunch."

States need income, and that income gets raised somewhere. The key is landing in a state where that somewhere or someone is not you. If you're looking at a second home, you could consider renting instead of buying, so long as you can still satisfy the residency requirements.

Another thing to evaluate when it comes to property taxes is the property's assessed value, which can sit close to the market value or far below. A high tax rate on an assessed value much below market value may not sting as much as you think.

5. Estate and inheritance taxes

While estate and inheritance taxes are often used interchangeably in the context of death taxes, they are not the same. Estate taxes are levied on the decedent's estate. Inheritance taxes are paid by the beneficiary.

Fewer and fewer states have either of these taxes. As of this writing, 17 jurisdictions. However, if you have enough money and haven't done enough planning, estate taxes can be punitive. Before you move because of it, see if you can plan around it.

Why the full picture is even more nuanced

There's an exception to every rule in our tax code, and nothing is black and white. While an income tax rate may be high on the surface, many states exempt retirement income sources such as Social Security, pensions and retirement account distributions. Many have income phaseouts or caps on those exemptions.

Property taxes can be discounted in multiple jurisdictions if you meet certain requirements.

And let's not forget the cost of living. You may be someone who had spreadsheets for all of the above but still wound up with astronomical grocery bills, mortgage payments and restaurant bills because you weren't the only one who moved to Florida during Covid.

If you do want to move for tax purposes retirement, my hope is that you go in with your eyes wide open.

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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.

California can be a wonderful place to retire. The great weather, access to outdoor activities, good food and diverse culture are some reasons retirees choose the Golden State.

That said, retiring there comes with its unique financial considerations. The cost of living is high, state taxes can take a big bite out of retirement income, and housing, transportation and healthcare costs can add up quickly. The overall cost of living in California is roughly 40% to 45% higher than the national average.

Retiring comfortably in California requires careful planning and consideration. If you're taking a do-it-yourself approach to retirement in California, here are a few areas to consider.

Get a good handle on your expenses

One of the first steps in planning for retirement is understanding what it costs to maintain your lifestyle. This might sound obvious, but many of my clients come to work with me at Halbert Hargrove because I am a CFP® professional and wealth adviser.

I review my clients' bank and investment account information and help them analyze and understand how much they spend on a monthly or annual basis. While many of my clients know how much money they have in their bank accounts, they often don't have a clear understanding of how much they spend on a regular basis.

I recommend starting with your regular fixed expenses. Think housing, utilities, insurance, transportation and healthcare premiums. Then consider the expenses that don't occur every month: Vacations, home repairs, property taxes or helping family are examples of some.

Knowing your nondiscretionary expenses (what you need to spend), vs your discretionary expenses (what you want to spend), is helpful. If the stock market has a challenging year, knowing where you have the flexibility to cut back can help you adjust your withdrawals while you wait for the market to recover.

Plan for healthcare beyond Medicare

California is home to some of the greatest medical institutions and hospitals in the nation including Cedars-Sinai Medical Center, Stanford Health Care, UC San Diego Health and UCLA Ronald Reagan Medical Center. But medical planning goes beyond finding the best doctors for the care you need.

California retirees need to budget for Medicare premiums, Medigap or Medicare Advantage, Part D (prescriptions), dental, vision, long-term care and any out-of-pocket expenses. Knowing the average cost of healthcare as a starting point can help, but age, location and tobacco use can impact costs.

There's another issue: Higher taxable income can increase Medicare premiums through IRMAA (income-related monthly adjustment amount). This is a surcharge added to your monthly Medicare Part B and Part D premium if your income is above certain limits.

What this means for retirees is a large IRA or 401(k) withdrawal might create a tax bill today and potentially higher Medicare premiums later.

Pay attention to California taxes

In addition to a higher cost of living, California has one of the highest state income taxes in the U.S. State income taxes start at 1% and go up to 12.3%, plus an additional 1% for taxable income over $1M. This matters quite a bit when retirees are drawing from large IRAs, 401(k)s or pension plans, as the net distribution from a pretax account can be considerably lower after you account for taxes.

Long-term capital gains tax, which is triggered by the profit you make from the sale of an asset held for more than a year, is also taxed in California using the same ordinary income rate that's applied to withdrawals from pretax retirement accounts.

At the federal level, long-term capital gains are taxed at a more preferential rate, so California is unfortunately unique in this regard. For retirees with substantial investment income, this can really increase their tax liability.

One silver lining — California does not tax Social Security benefits, disability or survivor benefits, so retirees who live primarily on these types of income have less tax exposure.

Don't forget housing, property taxes and home insurance

For many retirees, homes can make up a large portion of their net worth. This is especially true for California, where the prices of homes have skyrocketed throughout the years.

I frequently hear my clients recount how they bought their first homes for tens of thousands of dollars, and have watched the property grow into a multimillion-dollar assets.

A retiree in that situation might have substantial equity in their home, but a low-cost basis and property tax assessment. That can make a decision such as downsizing or moving to a retirement community much more complicated than simply looking at the price of the new home.

Before moving, consider the complete cost of the new property, including property taxes, homeowners' insurance, homeowners' association (HOA) dues and maintenance.

A smaller or less expensive home might not lower monthly expenses by much, all things considered.

When it comes to property taxes, keep in mind that Proposition 13 imposes a 1% cap on the tax rate and a 2% maximum for annual increases, offering some protection from long-term owners.

If you're a homeowner age 55 and older who wants to move from one California home to another, Proposition 19 allows you to transfer the lower assessed value of the primary residence to a newly constructed or replacement principal home. Eligible adults can use this tax transfer benefit up to three times.

Keeping your California retirement on track

Retirement in California can be expensive, but for many people, the lifestyle is a significant factor in their decision to live here. Understanding the costs, staying flexible and recognizing how each financial decision affects others can help you make informed choices while enjoying this chapter of life.

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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.

Editor's note: This is the third article in a four-part series on AI concentration risk in growth portfolios. The first two are: Your Diversified ETF Isn't as Diversified as You Think, and AI Is a Supply Chain Rather Than an Industry: Here's Why. The final article will explain the corporate adoption timeline that determines which layers ultimately earn their valuations.

Every layer of the AI supply chain depends on one assumption holding: That the money being spent today gets paid back by revenue tomorrow. That assumption isn't guaranteed, and four distinct risks could break it.

Demand risk

The first risk is the simplest to state and the hardest to verify. Enterprises and consumers have to want AI capability enough to pay for it at the volume hyperscalers are underwriting. The revenue is real, but it is not yet close to matching the spending.

Analysts estimate the annual gap between AI infrastructure spending and AI ecosystem revenue at roughly $600 billion, a figure that has widened rather than narrowed through 2026.

That gap doesn't prove demand will fail to show up. It proves that today's valuations are pricing in demand that has not arrived yet.

If it arrives on schedule, the companies building the infrastructure look prescient.

If it arrives two or three years late, a great deal of currently invested capital sits idle in the meantime, generating cost without matching revenue.

Capital spending risk

The second risk is that the spenders themselves change their minds. Microsoft, Amazon, Alphabet and Meta are projected to spend $700 billion to $725 billion combined in 2026, and every one of those companies answers to public shareholders who are already asking harder questions about the return on that spending.

Alphabet's stock fell roughly 7% in a single session in late July 2026 after the company raised its 2026 capital spending guidance, with investors specifically flagging concern over the return on that investment.

Capital spending plans are guidance, revised quarterly, not contracts. Every company in this chain can slow construction, delay chip orders or renegotiate power agreements if the return case weakens.

A slowdown doesn't require a crisis. It only requires one or two disappointing quarters of cloud revenue growth at the companies writing the checks.

Infrastructure bottleneck risk

The third risk runs in the opposite direction: Demand outrunning the physical capacity to meet it. Power, not chips, has become the binding constraint on the AI buildout.

Microsoft has disclosed a data center backlog worth roughly $80 billion that it can't yet fulfill because of power constraints. Separate estimates put the current U.S. data center power shortfall at more than 11 gigawatts today, growing toward nearly 50 gigawatts by 2028.

That constraint isn't just about equipment sitting in a factory somewhere. It's about the years-long wait to connect anything to the grid at all.

More than 2,060 gigawatts of generation and storage capacity are sitting in U.S. interconnection queues awaiting approval, according to Lawrence Berkeley National Laboratory, and the median project reaching completion in 2025 spent more than five years waiting in that queue before going live.

A company can have the capital, the chips and the building ready, and still be years away from switching anything on.

The equipment behind that power is just as constrained. GE Vernova, one of only a handful of companies in the world that build heavy-duty gas turbines at scale, reported an order backlog of 116 gigawatts in the second quarter of 2026, up from 100 gigawatts the quarter before, and it is already booking turbine reservations for 2031 delivery.

Writing a check today for new gas-fired power doesn't move a buyer to the front of a line that already stretches five years out.

A bottleneck sounds like good news for the companies that supply power and cooling equipment, and in the near term it often is. A persistent shortage also caps how fast revenue can grow across the entire chain, regardless of how much capital is available to spend.

Money can't buy electricity that doesn't exist yet, and permitting new energy takes years, not quarters.

Return-on-investment risk

The fourth risk is the one to watch most closely, because it determines whether the first three matter. Even if demand shows up, spending continues and bottlenecks clear, the infrastructure being built still has to generate a return that justifies its cost.

The divergence between AI capital expenditure growth and AI revenue growth is currently running around 46%, a figure that already exceeds the roughly 32% divergence observed during the telecom infrastructure buildout of the late 1990s, the cycle that preceded a multi-year correction in that sector.

That comparison is worth taking seriously without taking it too literally. The telecom buildout of that era did not turn out to be worthless; much of the fiber laid during that boom is still carrying traffic decades later.

It turned out to be built years ahead of the demand that eventually filled it, which meant a lot of capital invested at the peak was never recovered by the investors who supplied it, even though the infrastructure itself proved valuable.

AI's infrastructure could follow the same pattern: Durable and eventually useful, while still delivering a poor return for whoever financed the buildout at today's prices.

Three things to do about it

Look through every fund you own for exposure to the supply chain layers behind the AI buildout, not just the ticker you recognize. A fund can look diversified by holding count and still concentrate your money in a handful of companies whose revenue depends on the same four checkbooks.

Measure your overlap across funds, not within any single one. If your growth ETF, your S&P 500 index fund and a semiconductor fund all derive a meaningful share of returns from the same AI capital spending cycle, your effective concentration is higher than any single fund's fact sheet will show you.

Stress-test the shared assumption directly. Ask what happens to each holding, not the portfolio in the abstract, if hyperscaler capital spending growth slows from 60% to 15% next year. Some holdings would barely notice.

Others would take the full force of the correction. Knowing which is which before it happens is the entire point of this exercise.

The AI buildout may well justify itself over time. The risk worth pricing in today is not whether AI works. It's whether the bill comes due before the revenue arrives to pay it, and whether your portfolio is positioned to survive the gap either 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.

When people think about improving their financial lives, they frequently focus on strategies, portfolios, budgets or tax planning. Those things matter.

But after years of working with successful individuals and families, I've come to believe that the quality of a financial decision depends on the quality of the thinking behind it: How self-aware you are and how well you handle uncertainty.

My colleagues and I call that mental fitness. At Brighton Jones, we use a framework called Mindful, Emotional and Social Intelligence (MESI) to help clients build both financial capital and the internal capacity to use wealth in service of a meaningful life.

Here are some key tenets to help you manage your finances more intentionally.

Start with what matters most

Many people discover that financial decisions become clearer when they have a simple set of values to use as a filter.

I've seen this play out many times. One couple we worked with was weighing a job offer that would have doubled one partner's income but required relocating across the country.

Their parents, both in their late 70s, lived 15 minutes away and relied on them for weekly dinners, doctor appointments and help around the house.

After modeling the financial upside, they realized the trade-off wasn't just geographic, it was relational. They declined the offer, deciding that staying present during a finite season of their parents' lives mattered more than the additional income.

When a major decision arises, instead of asking, "What's the right financial choice?" ask, "Which option best supports the life and legacy I'm trying to build?"

One exercise I often recommend is envisioning your ideal day — not your most luxurious day, but the most fulfilling one. The themes that emerge aren't often found on a planning sheet.

Pay attention to your financial patterns

Notice your reactions to situations that impact your money. We worked with a family who began discussing whether to stop funding their children's 529 plans after a difficult stretch in the markets. News headlines and shrinking account balances made them wonder whether to wait until things felt more stable.

After stepping back, they realized their concern was being driven more by short-term fear than by any change in their long-term goals. They continued contributing as planned. Looking back, the experience reminded them that you make disciplined decisions when emotions are strongest, not weakest.

Create space between the event and the decision

One basic idea in mental fitness is that events themselves are rarely the biggest challenge — our interpretation of them usually has greater influence.

When facing a financial decision, I ask clients to walk through a series of questions that get under the surface.

• First, explain what happened and the values that were activated or threatened in that moment
• Next, think about the emotions present in that moment and what sits underneath them
• Finally, consider the thoughts and stories that share your perspective

Consider an executive deciding whether to exercise stock options. The financial analysis matters, but so do the values, fears, expectations and assumptions that influence the decision.

Align your resources with your life

Once you've clarified your values and noticed your own decision-making patterns, the next step is alignment. If personal relationships matter, is that reflected in how you spend your time and money? If health is a priority, do your calendar and spending support that commitment? If philanthropy matters, does your giving actually match it?

Consider a founder who sold a business in her 40s and initially treated giving as an afterthought, writing a few checks at year-end when friends asked. During a values exercise, she reflected on how a teacher and scholarship program had changed the trajectory of her own life.

That realization caused her to build education-focused philanthropy into her long-term plan, establishing recurring gifts and involving her children in grant decisions.

Alignment doesn't require a complete financial overhaul, but it might require honesty about where the gaps are. Small, intentional adjustments often create more significant change than dramatic ones.

Many of the decisions clients bring to us aren't technical. A retirement date, a wealth transfer, a family business transition — these touch identity and purpose as much as they touch numbers. That's why our conversations usually go beyond numbers, to the values underneath them.

Build habits that support better decisions

You build mental fitness through consistent practice: A few minutes of reflection each day, moments of pause built into the schedule, time for attentive thinking without distraction and a regular check-in on whether your values have shifted.

These habits may seem small, but they build the emotional steadiness that good decision-making requires, especially during phases of uncertainty.

Bringing everything together

Financial success and individual satisfaction aren't automatically the same thing. When mental fitness, self-awareness and intentional planning come together, wealth acts as a tool for both.

At the end of the day, some of the most important work in wealth management doesn't happen in a portfolio. It happens in the space between what we value and how we choose to live.

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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.

Have you ever wondered whether job-hopping is a good strategy for career advancement? Or what it does to your personal relationships?

There is a psychological connection between chronic job-hopping and serial relationship departures when driven by a deeply entrenched dissatisfaction personality, as you will see in a moment.

But first, in August, The Wall Street Journal published an article (paywall) that portrayed job-hopping as generally beneficial to the employee. It led to my office getting a number of emails and phone calls from readers — business owners and parents of job-hoppers — with very different opinions.

While this column has been critical of "helicopter" parents and those who enable their children's poor behavior that often plays havoc with their adult lives, the WSJ article prompted several parents of job-hoppers to ask me if I knew of "anything out there" that their kids could read that might help persuade them to knock it off.

What matters to employers

A recurrent theme common among the parents I talked with could be summed up like this: Old-fashioned values of stability and loyalty still matter to employers and are key to getting ahead on the job. But how do you get that through the thick skulls of young adults who merely see a few more dollars in a paycheck from changing employers every year or two, while chasing emotional fulfillment?

Instead of leading to advancement, constant employment changes can create a risk of falling behind.

And to answer the question, "Is there something out there that could influence job-hoppers to reconsider their view of employment?" — there is indeed. It's a new book, The Insider Advantage: Moving Up, Finding Success, and Building a Career That Lasts, by Wharton professor Matthew Bidwell.

I was sent an advance copy of his book over the summer, and I had the most interesting Zoom interview with Bidwell, a business professor who has put the dots together, leading to a simple and oh-so-valuable conclusion: "The real key to career growth is often staying exactly where you are."

A counterargument on job-hopping

Bidwell challenges the notion that frequent job-hopping is the fastest path to professional growth and higher compensation by showing that "insiders — employees who intentionally build their careers within a single organization — consistently develop a strong competitive edge over external candidates."

He notes that this advantage lies in the value of firm-specific skills, internal relationships and institutional knowledge that takes time to acquire.

Studies show that companies pay external hires 18% to 20% more than internally promoted staff for the same roles, yet these expensive outsiders score significantly lower on performance evaluations during their first two years. They lack an understanding of the existing workplace culture and operational mechanisms, requiring over two years to come up to speed while facing higher rates of voluntary and involuntary departures.

The Insider Advantage proves, through Bidwell's research, that staying put often accelerates upward mobility into positions of true leadership and influence.

"While moving to a new firm can provide an immediate salary bump," he points out, "long-term tenure lets a worker establish trust and climb the organizational ladder more easily and with greater job security."

Bidwell recommends that workers take advantage of internal mobility first and strategically time any outside jumps only once a clear structural ceiling is reached.

Red flags from the real world

I asked a friend of this column to share his opinion about and experience with job-hoppers.

Dr. David D. Schein is an attorney and full professor at the Cameron School of Business at the University of St. Thomas in Houston. He is also a published author and webcaster, with a focus on business, employment, ethics and human resources. He has a very dim view of the benefits of job-hopping.

"In my years as an employment attorney/HR consultant," he says, "I've never heard that job-hopping was a way to manage your career. Bluntly, in evaluating résumés for job hunters, (if an applicant has) a history of being in a position for less than three years, (that tends) to be a red flag.

"When they get to their 40s and 50s, that is a killer (because that's) when others are looking to move into C-suites. That said, employees who face a toxic workplace or other problems should leave ASAP."

On a relationship level

Frequent job-hopping correlates with a higher risk of divorce, according to sociological and economic data. Research indicates that high job turnover and employment instability are closely tied to reduced marital stability.

I asked another friend of this column, psychology professor Dr. Luis Vega of California State University in Bakersfield, to describe the impact it often has on personal relationships.

"Myriad reasons can explain job (or relationship) hopping," he says, "from impulsivity at not missing the next best option, to ambition, to lack of commitment — some of which may involve personality traits unique to the individual.

"For most people, the appeal of job-hopping is the belief that the next opportunity will bring monetary gain and prestige or a renewed sense of happiness. This also is true of relationship-hopping.

"Unfortunately, we are terrible at predicting happiness, what is called affective forecasting. Once the novelty wears off, happiness plateaus, and again we seek the next best thing, a repeat pattern."

He added that, instead of trying to forecast happiness — comparing to the past/future — it works best to focus on comparison of what is possible.

"Notwithstanding barriers that may require change, rather than replacing a job or relationship, it is best to rebuild on existing foundations, where comparisons to the possibilities are easier, and predictability is more assured."

So, if you are thinking of job-hopping, this might be the perfect time to read The Tale of Peter Rabbit by Beatrix Potter. He finally hopped home to his family.

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.

This is the third in a series of five articles bringing you ideas from Feroz Ansari's national bestseller, The Wisdom and Wealth Solution. Feroz, CFP®, is a portfolio manager at Compak Asset Management and an adjunct professor at the University of California-Irvine. (The Wisdom and Wealth Solution is published by Kiplinger Books and is a national bestseller*.)

The most expensive investing mistakes are often not mathematical. They're mistakes of perspective.

They happen when we mistake a frightening headline for a permanent trend, confuse information with understanding or let the emotional temperature of the moment dictate decisions meant to last decades.

Today, we're being pulled toward two equally misleading views of the future.

The first says everything is falling apart. The economy is broken, the world is increasingly dangerous, institutions are weakening, technology is destroying jobs, stocks are in a bubble and government debt is out of control.

The second says technology will solve everything. Artificial intelligence will create endless prosperity, productivity will soar, markets will always recover, progress is inevitable, and tomorrow will be better simply because yesterday was.

Both stories are incomplete.

The world is better than it feels, but it might also be more dangerous than it looks.

A valuable financial skill

Learning to hold both truths at the same time is a form of wisdom wealth and might be one of the most valuable financial skills you can develop.

In my book, The Wisdom and Wealth Solution, the second step of the LIVING360 method is "know the world." Once we begin to understand ourselves, our values, fears, habits and goals, we must understand the environment in which our lives and financial decisions will unfold.

You can't choose the best path or build a good financial life with a bad map of the world.

Human progress is real. By many measurable dimensions, we're living in one of the most fortunate periods in human history.

A child born around 1900 could expect, on average, to live about 32 years. By the early 2020s, global life expectancy had risen to roughly 73 years. The global under-five mortality rate has fallen to less than half its 2000 level.

Billions of people now have instant access to information, education and opportunity that would have been unimaginable to kings, presidents and industrialists only a generation ago.

Yet, spend enough time consuming headlines, and you could be forgiven for believing the opposite.

A crisis thousands of miles away becomes a video on your phone. A market decline becomes an emergency alert. An AI breakthrough becomes either a promise of utopia or the beginning of civilization's collapse. One bad economic statistic becomes evidence that the future has been canceled.

Your news feed vs perspective

Your news feed is information. It's not perspective, and it's certainly not wisdom.

As I write in The Wisdom and Wealth Solution: "A wider view doesn't dismiss suffering; it contextualizes it. Wisdom doesn't ignore what's wrong; it remembers what's right, too."

That wider view matters because fear can be financially and emotionally expensive.

Why do we feel worse when we have more? Consider one of today's most revealing contradictions.

American household and nonprofit net worth reached a record $195.9 trillion in the second quarter of 2026. Yet, the University of Michigan's Consumer Sentiment Index stood at just 46.3 in October, about 14% lower than a year earlier and near historically depressed levels.

How can a country become wealthier on paper while its people feel less secure?

Goldman Sachs economist Joseph Briggs recently suggested that weak economic sentiment might partly reflect a more pessimistic view of society itself. Only 23% of Americans described themselves as "very happy" in 2024, down from 31% in 2016, an eight-percentage-point decline.

If our financial wealth grows while our confidence, trust and happiness decline, perhaps the missing asset is not entirely financial. Part of it might be Wisdom Wealth.

Wisdom wealth is not blind optimism. It's the ability to see reality in context, to distinguish an event from a trend, fear from probability and information from understanding.

Progress is not guaranteed

Humanity's extraordinary progress doesn't mean improvement will continue automatically.

In many parts of the world, economic growth has slowed. That matters because people don't judge their lives only by what they have. They also judge them by whether life seems to be getting better.

The future contains genuine risks. Government debt is rising across many developed economies. Geopolitical tensions remain significant. Technology is advancing faster than many institutions can safely adapt.

Perhaps nothing captures our uncertainty better than artificial intelligence.

AI might be the ultimate test of perspective

At one extreme are visions of AI abundance: extraordinary productivity, lower costs, new industries, greater convenience, more personal time and machines that expand human capabilities.

At the other are warnings of mass unemployment, greater inequality, weakened critical thinking and increasingly autonomous systems escaping effective human control.

The loudest voices are often at the extremes.

You don't have to believe AI will destroy humanity to recognize that it could transform work more quickly than many people expect.

The International Monetary Fund estimates that AI could affect almost 40% of jobs worldwide and roughly 60% of jobs in advanced economies.

"Affect" does not mean all those jobs disappear. Some will. Many will change. Others might become much more productive. Entirely new roles will emerge.

That's not a reason for panic. It's a reason to prepare.

Help your children prepare, not for one permanent job title, but for a lifetime of learning, adaptation and reinvention.

Use your cognitive telescope

In my book, I suggest a practice I call using a cognitive telescope.

When a frightening headline appears on your screen, zoom out before you react.

Ask five questions:

• Is this an event or evidence of a long-term trend?
• How likely is the risk, and how severe would the consequences be?
• What assumptions am I making because of my concrete box, even though the world might have changed?
• What opportunities might exist on the other side of this change?
• What, if anything, should I do differently today?

A war deserves attention. It doesn't automatically justify abandoning the long-term asset allocation in your 20-year retirement plan.

Human progress has been extraordinary. It doesn't mean progress is inevitable.

Wisdom resides in the space between complacency and panic.

Knowing yourself helps you determine what matters and why. Knowing the world helps you understand the environment in which you must pursue it.

Financial wealth gives you resources. Wisdom wealth helps you interpret reality and decide how to use them.

Together, they create what I call total wealth.

The next time a headline tells you that everything is collapsing, or that some new technology is about to solve everything, pause.

Zoom out. Look backward before looking forward. Separate the signal from the noise, probability from fear and opportunity from hype.

That is what your cognitive telescope is designed to do.

Learning to see the world more clearly might be one of the most important Wisdom Wealth assets.

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• How Confident Retirees Think Differently About Their 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.

A few years ago, artificial intelligence in money management felt like a gimmick. Now it's woven into everyday banking, budgeting, saving and even investing. You're not just getting prettier pie charts. You're getting help making decisions in real time, with tools that learn how you actually live.

AI can nudge you before you overspend, top off savings when your account can handle it and make it easier to keep your long-term plans on track. Here are five ways it can help you take control of your finances.

1. AI-powered budgeting

Old-school budgets can feel like forcing your life into a spreadsheet. AI budgeting flips that. It watches what you actually do and helps you adjust more quickly.

The apps that work use machine learning to tag transactions more accurately, predict your bills and cash flow, and highlight small leaks like price creep and seasonal spikes.

Jeffrey Zhou, CEO and founder of Fig Loans, says: "AI-powered budgeting can help people better understand their cash flow and make informed decisions before financial stress builds up. For fintech companies, the goal is to turn these insights into simple tools that help people manage expenses and build healthier financial habits."

If you've ever felt whiplash from grocery prices or utility bills creeping up, this is where the tech helps. AI can flag a trend in three or four months that might take you a year to notice.

2. AI financial investments

Robo advisers can make diversified investing easier for people who don't want to pick stocks. They use algorithms to align your portfolio with your goals and risk tolerance. Then they automate the grunt work: Rebalancing and (in some cases) tax-loss harvesting.

AI adoption is best for future investment decision-making. It can process market signals faster than any human and keep emotion out of the equation. However, investors should treat it as a tool. The key? Pairing algorithmic discipline with a clear understanding of your own goals and risk tolerance.

Look for transparent fees and clear introductions when choosing an investment platform. And remember that one-size-fits-most glide paths might miss nuances in your situation. It's easy to "set and forget" money tools, so check in at least annually or after big life changes.

3. AI leverage for savings

Saving consistently is hard because life is messy. That's why automation helps so much. AI takes it further by watching your inflows and outflows as well as picking the best moments to move money.

Apps like Digit popularized this idea, using algorithms to automatically nudge small amounts into savings. Rule-based tools like Qapital let you build simple triggers that can add up without you thinking about it. For example, every purchase over $20 moves $2 to savings.

Most people struggle to save because it requires constant willpower. AI removes that friction by quietly moving money at the right moments, based on your income and spending rhythm. You wake up to savings you didn't have to think about.

Two quick ways to make the most of automated savings:

• Park savings in a high-yield account, so your cash works harder. The FDIC's national rate and cap data show how much average rates vary by product category, and is a useful reminder to shop around.
• Set up different savings buckets (emergency fund, travel, lifestyle, home improvement). That way, the app knows what you're saving for and can pace contributions to match your priorities.

4. AI-driven debt management

Debt can paralyze people because they don't know where to start. An AI tool can cut through that by mapping out which balances to prioritize and showing the payoff timeline. The caution? Stay engaged: The tool guides the plan, but you still have to commit to it.

It can also model the fastest or most motivating way to pay off your debts. While the avalanche method (highest rate first) is mathematically efficient, the snowball method (smallest balance first) can boost motivation, which helps people stick with the plan over time.

AI can simulate both, show you the trade-offs and help you pick the approach you're most likely to follow.

5. AI adoption for financial security

Fraud losses have climbed, and the scammers haven't slowed down. In 2023, the FTC reported that consumers lost nearly $10 billion to fraud including investment scams and imposter schemes. The good news? Banks and card networks now lean on AI to spot patterns humans would miss and to act quickly.

You can maximize AI's potential by:

• Turning on real-time transaction alerts and location-based card controls in your banking apps.
• Using virtual card numbers for online purchases. Capital One's Eno offers this feature.
• Enabling strong authentication. Passkeys can reduce account-takeover risk.
• Keeping your device's operating system up to date, as this includes security protections.

Take control of your finances with AI

AI won't rebuild your budget or fund your IRA on its own. However, it can keep you on track with less effort and catch problems early. It can give you day-to-day clarity that builds real momentum.

Start small. Turn on the alerts. Let an app suggest a budget that fits how you live. Try a robo advisor with a modest amount ,or set up an automated savings rule and see how it feels.

Having an "AI co-pilot" for your finances can be more than an interesting experiment. It can mean less juggling, fewer surprises and a clearer path to the goals that matter to you.

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• Are Digital Payments Making You Spend Too Much, Too Fast? These Simple 'Speed Bumps' Will Help You Slow Your Roll

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.

Something interesting is happening among young Americans: Even young conservatives are becoming more skeptical of capitalism.

A Wall Street Journal opinion piece (paywall) recently cited a survey showing that 53% of conservatives under 40 support government-run grocery stores. Harvard's Fall 2025 Youth Poll found that just 39% of young Americans support capitalism, down from 45% in 2020, with only 19% describing themselves as capitalists.

Those numbers are striking. However, I don't think the explanation is as simple as young Americans suddenly embracing socialism. I think they're frustrated, and a lot of that frustration is justified.

Housing is expensive, education and healthcare costs have risen. People who already own homes and stocks have benefited enormously from rising asset prices, while those trying to enter the market are paying significantly more to do so.

A 25-year-old looking at that landscape has every reason to ask whether the system is working for them.

But there's another part of the equation that I think gets overlooked.

I've spent more than 25 years as a tax attorney focused on retirement accounts and wealth creation. One of the hardest things about convincing someone in their twenties to care about retirement is that the reward feels impossibly far away.

You put $7,500 into an IRA at 25. A year later, maybe it's worth $8,500. That's not exactly life-changing money.

The mistake is evaluating that decision at 26 instead of 65.

Capitalism has a similar problem. Its benefits often take time, and we increasingly live in a culture that expects results immediately.

Starting out has never been easy — but it's different today

When I started practicing law in New York in 2001, I made about $125,000 a year. That was a very good salary for a 25-year-old.

I still had a roommate.

I didn't buy my first house until I was 37. Of course I would have liked to own one sooner. But at the time, I didn't interpret not owning a home in my twenties as evidence that the economic system had failed me. I was building my career, saving money and starting a business. I assumed the payoff would take time.

There is an important difference today.

Young Americans aren't imagining the affordability problem. Housing costs are real, and rising asset prices have disproportionately benefited people who already own stocks and real estate. Someone starting from zero today can reasonably look at the cost of a home and wonder whether patience alone is enough.

We shouldn't dismiss that concern, but we also shouldn't make the opposite mistake and conclude that because the path has become harder, the principles behind building wealth no longer work.

Social media shows the finish line

When I was 25, I wasn't carrying around a device that showed me hundreds of wealthy people every day.

Today, someone can open TikTok and immediately see a 27-year-old entrepreneur stepping onto a private jet, an investor talking about making millions in crypto or an influencer showing off a house that most people historically wouldn't expect to own until much later in life.

What you don't see is the race.

You don't see the 10 years of work, the failed businesses, the bad investments or, in some cases, the family money behind the lifestyle.

At the same time, sports betting and speculative investing have made the idea of getting rich quickly feel more attainable. Pew Research found that 31% of Americans ages 18 to 29 bet on sports in the past year, compared with 22% of adults overall. A 2026 Urban Institute study found that 15% of young bettors saved less because of it.

My concern isn't that placing an occasional bet is going to destroy capitalism.

It's the mindset.

Real wealth creation is usually boring: Work. Save. Buy assets. Reinvest. Avoid major mistakes. Repeat.

The real divide is ownership

This is where I think young Americans are identifying a real problem but sometimes drawing the wrong conclusion from it. Capitalism rewards owners.

If you own a home and its value increases, you benefit. If you own stock in a growing company, you benefit. If you own a business, you participate in the value that business creates.

If you own nothing, you are primarily dependent on your labor, and that divide matters.

But if the problem is that too few people participate in ownership, the answer isn't to reject ownership. It's to help more people become owners earlier.

Retirement accounts are one of the simplest ways to do that.

Imagine someone invests $7,500 annually from age 25 to 65 and earns an average 8% return. That account could grow to roughly $1.9 million, even though only about $300,000 came directly from the investor's contributions.

That's what time does.

A person investing $10,000 annually at 8% would have roughly $145,000 after 10 years, $1.2 million after 30 and $2.6 million after 40.

The investor didn't suddenly become smarter in year 30.

Their capital had time to work.

Young Americans are right to want more

None of this means telling a 25-year-old struggling with rent, student loans or healthcare costs to stop complaining and wait 40 years.

That's not a serious response.

If we want younger Americans to believe in capitalism, they need a realistic opportunity to participate in it. That means making it easier to save for retirement, improving financial education, expanding access to investment and creating more pathways into home and business ownership.

It also means recognizing something uncomfortable: Previous generations benefited from economic conditions that aren't identical to those facing young people today.

But acknowledging that doesn't require abandoning the basic principles of long-term wealth creation. In fact, I would argue the opposite.

If rising asset prices have widened the gap between owners and non-owners, becoming an owner matters more, not less. Young Americans have access to investment tools my generation could barely imagine at their age. You can open an IRA in minutes, buy fractional shares and invest with virtually no commissions.

What young people have most of all is something nobody can buy later: Time.

Capitalism isn't perfect. It doesn't guarantee success, and legitimate structural problems deserve legitimate solutions.

But neither capitalism nor retirement investing should be judged solely by what they produce in a year or two.

At 25, you're not supposed to have already built wealth. You're building the foundation for it.

The question shouldn't be whether young Americans are patient enough to accept an economy they believe isn't working for them. It should be how we help more of them become owners.

Our retirement system may be the best tool we have to do that. A 401(k), IRA or Roth IRA gives almost every working American a tax-advantaged way to own stocks, businesses, real estate and other assets. And young Americans have the greatest advantage of all: Time.

At 25, they have four decades for ownership and compounding to work in their favor. If the economic divide is increasingly between those who own appreciating assets and those who don't, the answer isn't to abandon ownership.

It's to create more owners, and give them enough time for ownership to matter.

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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 started to focus on retirement income planning about 15 years ago. One thing that struck me early in this journey was just how much our clients detest required minimum distributions (RMDs).

A large percentage of our clients were federal retirees with large pensions under the old system. They didn't need the money.

It wasn't that they were mad about having to take the funds — it was the taxes. On top of the taxes, there were also the other dominos that could fall — the phaseout of certain deductions, higher capital gains taxes and, perhaps the most hated, Medicare premium hikes (IRMAA).

Today, many of our clients still hate RMDs. This is not just because they all have large pensions, but many have put themselves in strong financial positions and do not like paying taxes on money they don't need. It's like paying the tolls on the Jersey Turnpike but having no desire to actually get where you're going.

We use many strategies to lower our clients' lifetime tax bills, but these three very niche strategies are designed to stop or delay the actual income you don't want, in turn, reducing or deferring the taxes.

1. Skip your first RMD

Everyone is eligible to defer the RMD in the year they hit their RMD age. This can be 70½, 72, 73 or 75, depending on your year of birth. This sounds better than it is, but it can make sense in the right situation.

Let's say you were born in 1960. Your RMD age is 75, and you will hit that in 2035. You can defer your 2035 RMD until 2036. Here's the catch: You'll then have to take two RMDs in 2036, one by April 1 and one by December 31.

Doing this without running the numbers can really backfire, because that lumpy distribution is more likely to cause more bad dominos to fall than if you'd split the distribution over two years.

Here are some situations where we've seen it make sense to skip the first RMD:

• You retire in 2035 and will have a significant income drop in 2036
• You sell your business in 2035

You have a lump sum from any other source in 2035 that causes your income to spike (unpaid leave, inheritance, inherited IRA distribution, home sale, etc.)

You see the theme. If your income is much higher in 2035 than you expect it to be in 2036, it could be beneficial to skip your first RMD. We rely on financial planning software to project out tax rates to make that determination. You can access a version of what we use.

2. Buy a qualified longevity annuity contract, or QLAC

When interest rates were hovering around zero, it rarely made sense to turn to a QLAC. Income guarantees move in the same direction as interest rates, so if there is any silver lining to inflation, it's that most fixed annuity rates moved up as the Fed raised rates to combat inflation. Merry Christmas!

A QLAC is a type of deferred annuity, basically meaning you give money to an insurance company in exchange for a future income stream. This is a unlike a single premium immediate annuity (SPIA), with which payments start immediately.

I believe that you need to approach this as longevity insurance first and as a tax tool second. Because many of these contracts will defer income until age 85, you are making a big bet on longevity.

The tax benefit is that you can move up to $210,000 per person (2026 limit) from your IRA into a QLAC. Round numbers: If RMDs start at 4%, you are delaying just $8,400 per year in RMDs.

"Delaying" is the key word. When that money does come out, it is still taxable.

Once again, this makes sense if you are already considering an annuity as a longevity hedge and like the idea of guaranteed income later in retirement.

3. Keep working

This one is not complicated but is often misunderstood. A costly mistake. If you are still working in any capacity as an employee and own less than 5% of the company, you can defer RMDs from your current employer retirement plan, but not from all your retirement plans.

Take the example of the client who started a manufacturing business that he sold to his employees. The business is his life. He tells me he'll work until the day he dies. I tell him he'll work until the day the new owners decide they can't take him anymore. He sort of laughs. He can defer RMDs until that day.

More commonly, we see clients continuing to work part-time in retirement. For anyone who is still working, and for employer retirement plans that accept rollovers into the plan, you may be able to roll funds from your IRA into your current employer plan and avoid RMDs on a much larger chunk of money.

This is the definition of the tax tail wagging the investment dog, which most textbooks caution against. But if you've got a good retirement plan at work and don't plan to stop working, it may make sense.

Most retirees spend more than their RMDs every year, so this is really an uptown issue for those who are really focused on taxes, as we are in our practice.

It is important to note that there are very few ways to completely eliminate the tax consequences, as you would if you did a qualified charitable distribution (QCD), so it's important to note that there is no prize for being the best tax deferrer. It only makes sense if your future tax rates will drop.

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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.

Katie retired at 67 after 30 years as a marketing executive. She had planned for it. In the final months of her career, she made a list of everything she had wanted to do but never had time for: Painting, reading, travel and long lunches with friends.

She retired in June and by September had done them all. By January, she was restless in a way she could not explain.

She was not exactly bored. Her days were full. She painted three mornings a week, attended a book club twice a month and had taken two trips she described as wonderful. She had the life most people picture for retirement. She also had a persistent, low-grade sense that something was not adding up.

She was doing everything right. She simply did not realize that doing everything right is not the same as doing the right things.

The leisure trap

Most retirement planning conversations miss a distinction entirely: Pleasant activity and purposeful engagement are not the same. One passes time agreeably. The other builds something.

Many retirees arrive at retirement with a version of Katie's list. They have delayed hobbies and postponed pleasures, and retirement finally gives them the time to pursue them. This is not a problem. The problem is mistaking the beginning of a fulfilling retirement for the whole of it.

Meaningful activity has three qualities:

• It draws on something you are good at
• It continues to challenge you
• It generates an outcome beyond personal enjoyment

Pleasant activities can satisfy one of those conditions, while purposeful engagement satisfies all three.

Katie's painting met one. She enjoyed it. It did not yet require her best thinking. It produced no outcome that mattered to anyone outside the room. And it was not growing.

What work was actually providing

For 30 years, Katie's career provided three things she did not consciously notice until they were gone: A skill that was always developing, an audience whose response to her work mattered and outcomes with real stakes.

The marketing campaigns she built either succeeded or failed. The metrics were visible, and the feedback was immediate. The challenge was never fully mastered.

That combination of novelty, accountability and consequence is what psychologist Mihaly Csikszentmihalyi identified as the conditions for flow: A state of full absorption in a demanding, skill-matched activity.

Flow is not relaxation. It is the opposite of relaxation. Csikszentmihalyi's decades of research identify flow as one of the most reliable contributors to well-being and meaning in adult life.

Pleasant hobbies rarely generate flow. They generate comfort. Comfort is not nothing. It is simply insufficient to fill the psychological space a career once occupied.

The distinction that changes everything

Purposeful engagement is not about what you do. It is about how you do it and for whom.

Golf is an instructive example. As a vehicle for walking, outdoor exposure and social connection, it is among the most valuable physical activities for a retiree. The distinction is not in the game itself. It is in what the game is being asked to carry.

As the sole answer to the question of how to spend the years after a career, it becomes a placeholder masquerading as a life. Same activity. Entirely different design.

Three conditions turn a hobby into purposeful engagement:

• A skill that still has room to grow. An activity not yet mastered that continues to demand more than you can deliver
• An audience beyond yourself. Someone whose response to your work, presence or contribution matters to the outcome
• Stakes. Something that would be diminished if you stopped showing up

A hobby that meets none of these conditions is considered leisure. Leisure is valuable. A retirement built entirely on leisure is like a financial portfolio held entirely in cash: It preserves what is there, but it yields nothing new.

The prescription

Katie's restlessness was resolved not by changing what she did but by altering the conditions under which she did it.

She joined a community art collective that required her to show work quarterly and to receive critiques.

She began teaching watercolor once a week at a center for older adults, which required her to clearly articulate what she knew.

She entered a regional exhibition but did not place. The following year, she entered again and had different results.

The hobby took on a higher purpose.

The painting did not change. The design did. She now has an audience, a standard and a reason to improve that extends beyond her own preference.

Her days have the quality of her career days, oriented toward something that is not yet finished.

That orientation is what the hobbies pillar, properly understood, is meant to provide. Not entertainment. Not the pleasant passage of time. An answer to the question retirement poses to every retiree who takes it seriously.

Who am I becoming in the years after my career, and is anyone watching?

The financial plan tells you how long the money will last. Purposeful engagement determines whether the person spending it keeps growing.

Both deserve a plan. For too long, only one has had it.

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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

Americans have no shortage of retirement benchmarks competing for their attention. Some experts say you need $1 million, others suggest saving 10 times your salary, and then there's the 4% rule.

On top of that, there are annual surveys and statistics that aim to calculate or identify the ever-popular retirement "magic number" for how much the average American needs to retire comfortably.

While these figures and rules can offer a starting point, they can also create unnecessary anxiety and lead people to focus on the wrong end goal.

Retirement planning is not about reaching someone else's number. It's about creating enough sustainable, reliable income to support the life you want to live.

Start with the retirement you envision

Many people begin retirement planning by asking, "How much do I need to save?" However, a more useful question may be, "What do I want retirement to look like?"

For some, retirement means extensive travel and new experiences. For others, it may involve staying close to family and supporting children or grandchildren. Others might even consider relocating, volunteering, pursuing a passion project or continuing to work in some capacity.

Those decisions matter because they determine the amount of income you will actually need. A retirement built around international travel will look very different financially from one centered on spending time at home with family.

Starting with your goals rather than a savings target helps turn retirement planning from a math exercise into a strategy built around your life.

Focus on income, not just assets

During your working years, retirement planning is largely about accumulation. You save, invest and allow time and compounding to work on your behalf.

As retirement approaches, the challenge changes. The question is no longer how much you can accumulate. It becomes how effectively you can convert those assets into reliable income.

This is where popular rules of thumb can fall short. Let's take the 4% rule, for example. This strategy suggests withdrawing 4% of your savings in the first year and then adjusting that amount for inflation every year after.

While this can feel simple and may work for some, there is a lot it can't account for, including when you retire, your tax situation, spending patterns, desire to leave assets to heirs or charitable causes, among other factors.

Two retirees with identical portfolio balances could require very different withdrawal strategies based on their goals, other income sources and life circumstances.

Consider the personal risks, too

A retirement income strategy should also account for risks that a simple savings target can't capture.

Longevity is one example. Funding a retirement that lasts 20 years is very different from funding one that lasts 35 years.

Market conditions matter as well. Retiring into a market downturn can create challenges that don't exist when markets are rising, particularly if withdrawals begin immediately.

Inflation can reduce purchasing power over time, while taxes can significantly affect how much spendable income remains from different accounts.

Family considerations also play a major role. While some retirees expect to help support aging parents, others may want to assist adult children, fund education for grandchildren, or prepare for a future transfer of wealth.

These priorities are meaningful, but they're difficult to capture in a single benchmark or national average.

Build a plan that evolves

No matter what you envision for your retirement, planning for it shouldn't be a one-time exercise completed just before leaving the workforce. A strong retirement income strategy should be flexible enough to adapt as life and goals evolve.

That's where an adviser can add value. Working with an adviser can help you build and refine that strategy over time, aligning your resources with your goals, revaluating trade-offs and adjusting as circumstances change.

A retirement plan should reflect your life, not a "magic number" or arbitrary benchmark. In the end, what matters most is having a personalized income strategy that supports the retirement you want today and can evolve with you tomorrow.

This material is provided for informational purposes only and is not intended as investment, legal, or tax advice. Any opinions expressed are those of the author as of the date of publication and are subject to change. Individuals should consult their own legal, tax and financial professionals regarding their specific circumstances.

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

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

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

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

Henry: The stock market refugee

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

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

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

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

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

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

Rachel and Tom: The divorcing couple

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

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

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

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

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

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

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

Sofia: The empire builder

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

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

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

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

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

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

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

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

Raymond: The high-income professional

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

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

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

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

Your move

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

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

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

Related Content

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

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

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

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

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

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

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

You know the cloud is out there

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

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

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

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

But long-term care is different.

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

That's why we should plan for it.

The storm isn't just about money

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

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

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

There's also the potentially substantial cost.

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

Then one spouse needs significant care.

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

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

What would you want to happen?

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

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

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

There are several ways to prepare for the storm

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

1. Self-funding

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

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

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

2. Traditional long-term care insurance

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

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

3. Hybrid or asset-based strategies

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

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

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

4. Combining strategies

Planning doesn't have to be all or nothing.

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

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

Doing nothing is still a decision

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

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

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

Plan while the sky is still clear

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

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

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

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

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

Related Content

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

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

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

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

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

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

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

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

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

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

That may be the organization's superpower.

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

The accessibility problem

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

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

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

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

This distinction is important.

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

The Garrett difference

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

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

The practical impact of this policy cannot be overstated.

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

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

Advice when you need it

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

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

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

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

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

Finding the needle in the haystack

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

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

By contrast, professional financial planners focus on providing advice.

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

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

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

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

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

How to find a Garrett planner

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

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

The bottom line

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

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

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

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

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

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

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

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

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

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

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

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

Retention is the floor, not the ceiling

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

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

The strongest relationships tend to deepen over time.

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

Each event creates another financial decision.

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

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

That distinction matters.

Start with curiosity, not consolidation

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

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

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

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

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

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

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

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

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

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

That's how trust compounds.

Asset management can be the beginning of the conversation

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

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

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

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

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

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

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

Look beyond household count

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

Imagine two advisers.

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

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

Which practice grew more successfully?

The answer may not be obvious from household count alone.

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

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

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

Earn the next dollar

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

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

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

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

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

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

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

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

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

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

Related Content

• From 'My Adviser Is Great' to a Great Story: This Is How Advisers Can Turn Value Into Referrals
• Your Clients Have Changed: Has Your Advisory Practice Changed with Them?
• Addressing Your Clients' Emotional Side: Communication Techniques for Financial Advisers
• Winning Strategies for Financial Advisers as Clients' Lives Evolve
• Optimize, Grow, Retain: The Power of Annual Client Reviews

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

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

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

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

Proactive planning before RMDs kick in

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

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

Social Security claiming decisions

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

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

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

Adjusting for legislative changes

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

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

Coordinating income for consistency and efficiency

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

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

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

The '3L framework'

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

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

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

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

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

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

From reactive decisions to intentional retirement

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

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

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

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

Related Content

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• Advisers: This Outdated Retirement Rule Actually Un-Diversifies Your Clients
• How to Turn Wealthy Clients' Charitable Giving Into a Cohesive Plan
• Old Annuities Contain Untapped Potential for Clients and Advisers: Here's Why
• What's the Best Age to Take Social Security? 3 Questions Advisers Should Ask

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

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

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

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

What makes Medicare so different

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

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

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

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

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

Mistake No. 1: Assuming Medicare is automatic

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Medicare Part D helps cover the cost of prescription drugs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related Content

• 10 Things You Should Know About Medicare Part D Plans
• Why Is My First Medicare Bill So High?
• Your 2027 Medicare Open Enrollment Guide: Essential Dates and Notices
• Claiming Social Security Soon? 5 Smart Moves to Make Before You File
• Retiring in the Next 12 Months? Answer These 3 Questions Before Your Paycheck Stops

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.

AI became a larger part of our ordinary lives quickly.

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

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

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

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

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

The chatbot doesn't know:

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

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

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

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

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

Where AI helps

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

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

Other ways it can help include:

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

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

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

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

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

What's next

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

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

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

Related Content

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• If AI Is Doing More of the Work, What Are You Paying Your Financial Adviser For?
• More of Us Are Using AI for Financial Advice: Here's Where I'd Draw the Line
• AI Can Build a Budget, But Does It Know the Person Behind It? Why Your Financial Plan Will Benefit From the Human Touch
• Gen Z Thinks They Need $9.5 Million to Be Successful. Here's What Healthy Money Habits Actually Look Like

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

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

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

The danger of chasing the hot, new investment

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

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

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

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

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

Consistency is the name of the investing game

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

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

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

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

The three keys to long-term retirement success

Investors who build meaningful wealth focus on three things:

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

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

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

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

When to dial back risk

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

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

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

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

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

How to handle 'hot' investment opportunities

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

Ask yourself:

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

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

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

In the end: Trust the process

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

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

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

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

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

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

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

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

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

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

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

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

1. Build an investment plan around your pension

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Prepare for RMDs

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

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

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

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

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

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

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

4. Consider whether Roth conversions make sense

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

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

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

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

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

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

5. Plan for the 'widow's penalty'

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

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

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

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

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

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

6. Don't overlook legacy planning

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related Content

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• When Is a Roth Conversion a Bad Idea? 6 Situations Retirees Should Consider Carefully
• Why a Roth Conversion Is Wrong for Most People But Often Right for Pension Holders
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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

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

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

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

Income annuity keeps on giving

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

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

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

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

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

It's foolproof

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

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

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

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

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

Guaranteed annuities with cash value also work

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

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

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

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

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

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

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

Tax matters

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

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

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

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

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

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

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• Income and Life Expectancy Not Adding Up? An Annuity Could Solve the Equation
• Why Annuities Sometimes Sound Too Good to Be True

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

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

Then his Mexican pension pulled up a chair.

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

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

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

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

Five dates. Each had an argument in its favor.

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

First confirm which choices are available

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

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

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

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

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

The pension changed the question

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

"About $2,200," he said.

Carlos was single and already owned his home there.

"And how much will your Mexican pension provide?"

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

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

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

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

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

Waiting meant postponing generosity

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

For the first time, the committee went silent.

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

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

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

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

That required calculation. It also required listening.

Give the math the right assignment

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

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

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

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

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

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

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

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

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

For years, retirees were told that saving $1 million was the benchmark for a comfortable retirement. Today, that number feels increasingly outdated, and recent studies bear that out. Americans now believe they will need nearly $1.5 million to retire comfortably.

Rising costs, longer life expectancies and market uncertainty have left many retirees wondering whether they'll outlive the money they spent decades building.

That fear is only becoming more common. Whether you're a young saver just starting your career or on the brink of retirement, the worry is less about if you can retire and more about if you've saved enough to maintain your current lifestyle.

The real retirement problem isn't always saving — it's spending

One of the biggest retirement planning mistakes people make is that they assume that their spending habits will remain the same or decrease in retirement; in reality, they might increase. Their lifestyle no longer matches what their savings can support.

High earners typically struggle with this more than most. They were used to increased spending during their working years, but once the paycheck stops in retirement, they're met with a rude awakening.

I've seen many retirees struggle with this problem throughout my career. Rarely is the issue about whether they saved enough, but whether they can live on the income their savings generate. That's why I believe it's important to find ways to replace the paycheck you've lost.

Replacing your paycheck

If you're no longer receiving monthly income from an employer, how do you replace it?

For many, Social Security alone won't be enough to cover essential living expenses. The answer lies in building a retirement plan around guaranteed income first and investment growth second.

Utilizing guaranteed income sources, such as annuities, allows the rest of your portfolio to remain invested in the stock market for growth and added flexibility.

This approach can reduce the emotional stress that often comes with relying entirely on the stock market for retirement income. All it takes is one bad year in the markets to potentially threaten the longevity of your money.

Creating multiple sources of income

Annuities are designed to address those fears directly. Think of an annuity like a self-funded pension. Instead of a company paying into a retirement savings vehicle, you're the one funding the investment. You contribute funds to the annuity, and in exchange, an insurance company promises to pay you a certain amount of money for a set period, depending on the type of annuity you purchase.

This predictable income stream can help cover basic living expenses such as housing, healthcare and utilities, replacing the paycheck you lost once you stopped working.

Annuities tend to be a safer investment because the value never goes down due to market conditions. It reduces the need to sell investments during downturns or worry about whether one bad year in the market will hurt your monthly cash flow.

The other portion of your money should stay invested in equities and other growth assets for discretionary spending and long-term opportunity.

Don't miss your window; plan early

Like many things in life, timing matters. I recommend people start building their retirement income plan about three to five years before retirement. That window gives you time to structure income strategies, evaluate expenses and prepare assets for the transition from accumulation to distribution.

Planning early gives you more flexibility and a better sense of whether you're on track to retire when you want. Instead of wondering whether you can afford to retire, you can start envisioning how you want to spend your time and what you want to do in your golden years.

Interest rates and opportunity

The current interest rate environment has also created a unique opportunity for retirement income planning.

While consumers often associate higher interest rates with expensive mortgages and credit cards, higher rates can also improve payouts on certain guaranteed income products such as annuities.

When interest rates were hovering near historic lows a few years ago, retirement income payouts were far less attractive. Today, higher rates have significantly changed the math for some retirees looking to create predictable income streams.

The bottom line: Retirement confidence comes from income security

Retirement planning isn't about hitting a magic savings number. It's building a strategy that aligns with the life you want to live.

1. Start planning three to five years before retirement. Create an income strategy before leaving work.

2. Build your retirement around income, not just portfolio size. Focus on replacing your paycheck to ensure essential expenses are covered.

3. Understand if your retirement can support your current lifestyle. If they don't match, make the appropriate adjustments to ensure your savings last.

The retirees who most often struggle are those who focus only on growing their money, without a plan to turn that money into predictable income, should market volatility strike.

On the other hand, the retirees who feel most confident know exactly where next month's paycheck is coming from, even if they no longer work for one.

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• We've All Heard the Buzz About Roth Conversions, But Not Everyone Will Like the Reality
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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.

Our recent article about home warranty companies that promise to replace or repair your major appliances and HVAC systems — but have a nasty habit of telling subscribers to pound sand when their AC fails in 110-degree summer heat — got one heck of a response from readers all across the country.

Several (with a sense of humor) came up with mottos for their "disaster" that are hysterical, but we can't print them.

People who needed to have major home appliances — refrigerators, stoves, air-filtration systems — replaced with quality products but were given the run-around also called.

One told me, "We were referred to their own vendor's salespeople who had no product knowledge and would be happy to replace our item with a similar one that has a history of complaints and a high failure rate."

Sales presentation verified 'like with like' replacements

One couple had the foresight to record the sales presentation, which they played for me. They asked, "If you do replace an appliance, will it be the same or better than what we now have?"

The sales rep replied, "I have worked in insurance for years, and we do like-for-like replacements, which means, if not the same brand, it will be equivalent to what you now own."

That statement is likely false, as home warranty companies generally do not use "like for like" language in their contracts, but it sure sounds like a good reason to plunk down your money for what — often — is a bottomless pit.

"When they offered us junk as a replacement," the same couple said on our Zoom call, "our attorney played the recording for them, and all of a sudden, the company treated us correctly."

They, and others, suggested that an article could explain why it is important to establish a long-term relationship with people in appliance sales who consider themselves career professionals — in it for the long-term — and "not just after a quick commission, so you can obtain accurate and honest information."

Deal with a professional appliance salesperson

From people just starting out in life to families with children and grandchildren, the reality of homeownership is that, sooner or later, we all need to replace a fridge or other major appliance. When that becomes apparent, the first question usually is, "Where do I go for the best deal?"

I submit that is not the key question to ask.

Given the complexity and options available on today's washers/dryers, refrigerators, freezers, etc., guidance and personalized recommendations from a knowledgeable home-town appliance dealer's sales staff far outweigh saving a few dollars when buying from a "big box" store.

Often, if you ask a local dealer to match a price, they will.

Long-term, career appliance specialists offer customers distinct advantages, and I just happen to know two in my town — Adam and Ryan — who work at Urner's, a century-old, locally owned appliance retailer.

While Adam recently retired, my wife, Anne, and I considered him "our" go-to appliance guy because of the guidance he provided across the years. Now, Ryan is filling Adam's shoes.

I sat down to chat with them on this topic. Here is a summary of our discussion.

Adam: My job was never to just to sell you an appliance. I wanted to help you find the right fit for your specific lifestyle, kitchen dimensions, budget and so on. Especially with new customers, our interaction was all about having a meaningful consultation, not just quickly closing a sale. This means that I had to have, and customers need to probe, a salesperson's:

• Product and brand knowledge. How easy is it to use this washer? All brands have their own peculiarities that part-time clerks at a big-box store might not know, including details that could easily create issues for buyers, such as complex installation requirements, ventilation needs and warranty coverages.
• Long-term accountability. My business depended largely on referrals and repeat clients. If an appliance arrived damaged, or there were other issues, I would advocate for my customers to help bring about a positive resolution. I obtained so much new business because once the sale is made at many so-called discount stores, that's it! Customers could not count on the salesperson to help them resolve a problem.

When your fridge fails in the middle of summer

Ryan: I agree with all of Adam's points and will add something no one ever wants to see happening: Appliances fail at the worst times, and this past summer, so many did because of the heat waves.

With an established relationship, you don't need to drive to a showroom or research online, which be confusing. Instead, call your salesperson, explain what happened — and this is where the trust you have both developed pays off — they will find an appropriate replacement and jump through hoops to help you.

How to figure out who the career appliance salespeople are

In my experience of hearing complaints from customers of both big-box and independent appliance dealers, when employees are making a sale, they seem to care only about getting rid of inventory that earns them a commission or meeting a quota, and they often couldn't care less about after-sales support.

I recommend visiting showrooms that are run by independent dealers who carry a variety of brands. Ask to speak with the manager and just say, "May I ask for your help? I would like to speak with one of your career salespeople — someone who has been here for years."

That shows two things:

• You are a serious and informed customer
• You respect people who have one of the most challenging jobs — sales!

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.

As someone planning for the future, protecting your health and savings is likely at the top of your list.

The cost of healthcare, especially long-term care, can quickly erode even a substantial nest egg. While Medicare provides vital health coverage, it has limits — particularly when it comes to long-term custodial care such as nursing homes.

That's why many people are turning to a tool called a Medicaid Asset Protection Trust (MAPT) to shield their assets while maintaining access to Medicare and Medicaid benefits.

What is a Medicaid Asset Protection Trust?

An MAPT is a specialized legal arrangement designed to protect your assets and help you qualify for government healthcare programs.

Unlike a straightforward will or a general trust, an MAPT is specifically crafted to help people navigate the complex rules surrounding Medicare and Medicaid eligibility.

At its core, the MAPT moves selected assets out of your personal ownership and places them into a trust.

This legal shift can reduce your countable assets when government agencies evaluate your eligibility for Medicaid's long-term care benefits, while still allowing you — or someone you trust — to manage and use the assets for your benefit.

Why is this important?

Medicare offers excellent coverage for hospital stays and certain medical services but provides limited support for long-term custodial care, the kind of ongoing help many people need as they age.

Medicaid, on the other hand, covers long-term care costs but comes with strict eligibility rules — especially regarding your assets.

Many retired people face a harsh choice: spend down their savings to qualify for Medicaid or pay out-of-pocket for costly long-term care. An MAPT offers a third, smarter option. Here's why:

Preserve your savings. The MAPT can protect your life savings, your home, investments or other assets from being fully spent on nursing home or in-home care. This gives you peace of mind knowing your financial legacy is secure.

Ensure eligibility for Medicaid benefits. By placing assets in the trust, you reduce your personal resources in the eyes of Medicaid without losing control or access to those assets. This helps you meet Medicaid's asset limits more easily and quickly, ensuring you get the care you need.

Maintain control of your finances. Contrary to popular belief, creating an MAPT doesn't mean you lose all control. Depending on how the trust is set up, you can still access funds for your care and daily expenses or appoint a trusted family member to manage the trust in your best interest.

Avoid probate and promote privacy. Assets held in a trust often bypass the lengthy probate process, allowing your heirs to avoid court delays and maintain confidentiality about your estate.

Plan ahead to avoid a crisis. Establishing an MAPT before a health crisis strikes is crucial. Medicaid has a "look-back" period (usually five years), scrutinizing any asset transfers made before applying for benefits. Proper planning can help navigate these rules and prevent costly penalties.

Until you provide every receipt, distribution and bank statement for all transfers predating the application for Medicaid benefits for the prior five-year period, you are responsible for paying the costs of care.

Who should consider an MAPT?

If you have assets such as a family home, savings or investments, and you anticipate needing long-term care, an MAPT might be a valuable part of your estate planning.

It's particularly beneficial if you want to protect your wealth for children or other heirs while ensuring access to government healthcare assistance.

Consult an experienced elder law attorney

Navigating Medicare and Medicaid rules can be complicated and varies by state. An elder law or estate planning attorney familiar with local regulations can guide you in creating an MAPT tailored to your situation, ensuring compliance and maximizing your benefits.

An MAPT offers people a strategic way to protect assets, maintain access to Medicaid long-term care benefits and plan without exhausting their savings.

It's a safeguard that balances financial security and healthcare needs, helping you maintain control, dignity and peace of mind as you age.

If protecting your assets while qualifying for government healthcare assistance is a concern, now is the time to explore whether a Medicaid Asset Protection Trust fits your retirement plan.

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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.

The myth of the lone entrepreneur is exactly that: A myth.

While vision and determination are essential, sustainable growth rarely happens in isolation. The most successful business leaders understand that collaboration isn't a concession. It's a strategy.

By partnering with the right people and organizations, companies expand their reach, strengthen their capabilities and create opportunities that would otherwise stay out of reach.

The business landscape is filled with partnerships that created value far beyond what any one organization could achieve alone. From global corporations to neighborhood coffee shops, collaboration has long served as a catalyst for innovation and competitive advantage.

Organizations that combine complementary strengths simply accomplish more together than they can separately.

The evidence is everywhere

Consider Starbucks and Barnes & Noble — a store-within-a-store concept. By bringing coffee shops into bookstores, both companies created an experience that encouraged customers to linger and spend more.

Starbucks gained a steady stream of customers; Barnes & Noble transformed its stores into destinations rather than mere retail outlets.

The same principle played out on a larger scale with Nike and Apple. Combining fitness and technology created a new experience for consumers and strengthened both brands' connection with customers in ways neither could have achieved alone.

Collaboration is just as powerful for smaller businesses. A boutique hotel that partners with local restaurants and tour operators offers visitors a richer experience while generating business for the entire community.

An independent retailer that partners with neighboring businesses on joint promotions can attract customers who might never have found it otherwise.

As the owner of Embrace Resort in the Bahamas, I've seen this firsthand. The most successful partnerships in the resort and tour industry weren't between large corporations, but between businesses with complementary services and shared interests.

Relationships with independent transportation providers, local tour operators and regional airlines created opportunities that benefited everyone involved. Each business extended its reach, enhanced the customer experience and generated new revenue.

The common thread: Partners brought different strengths to the table. One provided customers, another expertise. One contributed technology, another brand recognition.

Together, they created value that exceeded what either could produce independently.

How you can build a partnership

Successful collaborations rarely happen by accident. The strongest partnerships are built deliberately, with careful consideration given to shared values and aligned objectives.

Before entering any partnership, look closely at your customers and identify gaps in your offerings. The best opportunities emerge when one business provides something the other can't, creating a more complete experience for customers.

For many entrepreneurs, the greatest challenge is accepting that some control must be shared. That's uncomfortable for founders who built their businesses through independent decision-making.

Yet successful partnerships require trusting others and accepting that not every decision will rest in your hands. Enter the relationship with a clear understanding of where responsibilities begin and end.

Due diligence matters

A successful partnership requires more than a signed agreement. It requires trust, transparency and a clear understanding of how value will be created and shared.

When partnerships are built on mutual benefit and open communication, they become powerful engines for growth. When they're not, resentment quickly replaces cooperation.

Collaborations should never be informal handshake arrangements. Strong partnerships rest on clearly defined expectations, responsibilities and accountability, starting with a carefully drafted agreement outlining each party's obligations, decision-making authority and performance expectations.

Success metrics should be established from the outset and reviewed periodically.

A well-structured agreement does more than define how a partnership works when things go right. It anticipates what happens when challenges arise.

Engage legal counsel familiar with partnership agreements to identify risks and address exit strategies before they're needed. Planning for the unexpected isn't distrust. It's sound business leadership.

None of this is easy

Collaboration means sharing credit, ceding control and trusting that someone outside your organization has your best interests at heart.

For founders who built their businesses through sheer will, that can feel like a shift in identity, not just strategy. It means admitting, at least implicitly, that you can't do it all yourself, a notion that runs against the very instincts that got most entrepreneurs into business in the first place.

But the businesses that figure it out gain something their go-it-alone competitors never will: Leverage.

The boutique hotel doesn't need its own tour company. The independent retailer doesn't need a marketing department the size of a national chain. They need the right partner, the right agreement and the discipline to build trust before they need it.

That leverage compounds over time, turning what started as a single deal into a network of relationships that quietly reinforce one another.

The myth of the lone entrepreneur persists because solo success makes a better headline. But look closely at any business that's scaled sustainably, and you'll find partnerships quietly doing the heavy lifting.

• Coffee in a bookstore
• Fitness data on a wrist
• A regional airline and a tour operator who figured out everyone wins when the visitor has a better trip

The opportunity is out there for any business willing to look past its own four walls. The only question is whether you're ready to find it.

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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.

More than one-third of Americans (37%) plan to make a change to their portfolio or investment strategy this year.

That's according to New York Life's Wealth Watch 2026 Midyear Outlook. It is not hard to see why. Inflation, interest rates, market volatility, the boom of generative AI and a steady run of unsettling headlines have left many investors feeling they should do something different with their money.

The instinct is understandable, but acting on it without a detailed financial plan can be costly, and your portfolio is only one part of your strategy.

Changing your portfolio can be one of the smartest moves you make, or one of the most damaging. The deciding factor is rarely the market itself. It's whether the change reflects your long-term strategy or reacts to short-term noise.

Before you rebalance or reallocate, here is how to tune out the distractions.

Know what is driving the urge

Begin by naming the pressure you feel, because the trigger for a portfolio change is not always the same as the source of financial stress. Headlines and market swings could prompt the urge to act, but our data show that day-to-day costs are weighing more heavily on many investors.

Higher costs of living topped the list of financial concerns, cited by 61% of respondents, while market volatility was named a top concern by just 15%.

In other words, many people feel the squeeze most directly through groceries, housing and gas, even if market news is what gets their attention.

That distinction counts, because pressure on your monthly budget likely calls for a change to how you spend or save, not how you invest.

Avoid two common mistakes

When people act, they tend to err in one of two directions.

The first is to overreact: Chasing last year's winners, trying to time the market or making decisions based on whatever is trending. Today, that often means turning to technology for answers.

In our survey, 13% of people said they research financial topics with generative AI. These tools can help with education, but they might not know your full financial picture, including your goals and your timelines.

The second mistake runs the other way: Doing nothing. About 29% of people told us they took no action in response to factors affecting their finances.

Paralysis and panic look different, yet they often share a root cause: the absence of a strategy.

Run every change through five lenses

Whether you manage your own investments or work with a financial adviser, test any proposed change against five questions before you act.

1. Does it serve your long-term goals? A portfolio move should ladder up to something specific, such as a retirement date, a home or a college fund. If you can't explain how a change advances a goal, treat that as a warning sign.

2. Does it match your risk tolerance? Adjusting your asset allocation — the mix of stocks, bonds and other holdings — is the change that most directly reflects your comfort with risk. Any shift should reflect how much volatility you can absorb, not how you feel this week.

3. What are the tax consequences? Taxes are an often overlooked cost of trading. Selling an appreciated asset, moving money between account types or realizing gains can trigger a bill that erases the benefit of the change. Model the after-tax outcome before you trade.

4. Are you diversified and protected? A resilient plan involves more than the assets you hold. Insurance and guaranteed income belong in the same conversation as your investments. Diversification and protection are what keep a single bad year from derailing an entire plan.

5. Will it hold up against your retirement income needs? This is where changes get personal. Any change you make today should be judged against the income you'll need to generate for decades, not against this year's return.

The case for working with a financial adviser

If this data holds one lesson, it is that the investors who feel most confident about their money are the ones who aren't going it alone. Close to a third (30%) of American adults say they don't have a strategy. Among people who work with a financial adviser, however, that figure is 5%.

That gap follows through to financial confidence: 44% of those who work with a financial adviser are very confident their retirement savings will last the rest of their lives, against 24% of adults overall.

Across nearly every measure of preparedness we track, from emergency savings to debt to retirement readiness, the advised group runs roughly one and a half times ahead of the general population.

None of this means advice does the work for you, and it doesn't mean sitting still. People who work with a financial adviser are more likely to plan portfolio changes this year, not less: 44% vs 37% of Americans overall.

That's the point. A financial adviser gives you a framework for deciding when to change course and how — based on a full picture of your financial life.

Should you make changes to your portfolio this year? Perhaps. If a change reflects your goals, your timeline and your tolerance for risk, it might be the right move.

If it reflects a headline, an app or the knot in your stomach, treat that as your signal to pause and consider talking it through with a trusted financial adviser before you act.

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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 once worked with a family in which the parents had built substantial wealth and didn't share the details with their children for decades.

Their four adult children were all successful in their own right, but they didn't discover the full financial picture until they were in their 50s and early 60s, when their parents finally brought everyone together with an attorney and a financial adviser to review their estate plan.

This isn't an uncommon issue. According to Kiplinger's Trillion Dollar Talk survey, conducted by Morning Consult, more than half of parents ages 55 and older say they rarely or never discuss money with their children.

These parents hoped one child would step in to help manage the portfolio and that the others would take on roles like executor or trustee. Instead, the children left the meeting feeling frustrated and unprepared. They urged their parents to hire someone outside the family entirely.

The wealth wasn't the problem. The problem was that nobody had built the muscles for stewardship until the day they were suddenly required.

As a legacy planning specialist at Novare Capital Management, I think about preparing the next generation less like a single event and more like a curriculum, one where the lessons grow with the child instead of arriving all at once in a conference room.

Here's the road map I walk families through, stage by stage.

Elementary and middle school: Save, spend, give

The foundation starts simple: Help a child become intentional with every dollar they receive.

One family I worked with paired basic money lessons with a values-based twist. Each year, their three children picked a charity, researched it and presented why it mattered to them.

The child who showed the strongest research and conviction chose that year's family vacation destination, and every child still made their own donation, matched by the parents.

It turned saving and giving into something the kids competed to get right, and by the time they were adults, they brought that same confidence into estate planning conversations instead of feeling overwhelmed by them.

A savings match works the same way. If a child saves a dollar, the parents contribute 25 cents. It's a small practice, but it introduces the idea of matching contributions years before that child will encounter an employer 401(k) match.

Whatever structure you use, keep the terms consistent and let the child retain some control, including the freedom to spend within clear guidelines.

High school: Real costs, real stakes

Teenagers need lessons that move from abstract to practical. If you started a savings match earlier, high school is when a teen can begin contributing a percentage toward bigger costs, such as a car, a musical instrument or sports equipment.

That shared stake teaches delayed gratification in a way allowance never will.

This is also the right window to introduce responsible credit use, while the teen still has parental guardrails at home rather than encountering credit for the first time during their freshman year of college.

For investing specifically, I like mock trading exercises that let teens experience real market swings without real money on the line.

Investors with a Schwab brokerage account can use paperMoney, a free virtual trading platform, to practice buying and selling with fake money. It's a lower-pressure way for a teen to get comfortable with market swings rather than jumping straight into a real account, like an UTMA a grandparent funded with $10,000, where mistakes carry real consequences.

One mistake I see often: Trying to get a 16-year-old to care about retirement, which is too abstract at that age.

The more effective play is teaching the underlying skills, delayed gratification, budgeting, paying yourself first and comparing fees and providers, since those transfer directly into retirement readiness later without requiring a teenager to care about something that's 50 years away.

The 20s: Building independence without a safety net

Young adults need a budgeting approach that covers both savings and debt at the same time. That means understanding high-yield savings accounts, prioritizing high-interest debt paydown and building an emergency fund that can cover three to six months' worth of expenses.

This lesson is more important than many people realize: If parents become the automatic backstop for every setback, that precedent is hard to undo later.

This is also the age to talk through what support looks like if that emergency fund isn't enough. If an adult child needs to move home for a few months, will they pay rent or contribute to groceries? Is there an end date?

Working out those terms before a crisis hits keeps the conversation feeling like a plan instead of a rescue.

30s and beyond: From teaching to partnership

Once adult children reach their 30s, the goal shifts from teaching habits to preparing them for real roles in the family's financial future.

If regular family meetings haven't started yet, this is the time, and I recommend starting with a "ground rules" session rather than a numbers session: How does this family want to communicate about wealth going forward?

You don't need to open the full balance sheet to have this conversation. Plenty of families aren't ready to disclose the size of an estate, and that's fine. Disclosure comes later.

What matters first is whether the family has built the communication and trust to handle it when it does.

Four signs your children are ready for more

Age is a poor predictor of readiness. What I look for:

• Can they explain where their money went and why?
• Do they consistently save before they spend?
• Can they compare options and ask questions before making a decision?
• When they make a financial mistake, do they learn from it instead of hiding it or expecting someone else to fix it?

Those four behaviors tell you more about a child's readiness to handle money than any birthday will.

Let's revisit the family I opened with. Their children weren't incapable — they were simply never given the stage-by-stage practice that would have made a room full of legal documents feel familiar instead of overwhelming.

You don't need a perfect plan or a full disclosure meeting to start. You need one honest conversation at whatever stage your kids are at right now — and a willingness to keep having it as they grow.

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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.

Required minimum distribution season sneaks up on many retirees.

RMDs are the amounts you must withdraw from tax‑deferred retirement accounts once you reach the required age, which is 73 for individuals born from 1951 through 1959 and 75 for those born after 1960.

Failing to take an RMD can be an expensive mistake. Vanguard research estimates that missed RMDs cost investors as much as $1.7 billion a year, and most of that loss is avoidable with better organization and planning.

Every year, millions of people log into their IRA, withdraw the smallest amount required and move on. The RMD becomes a chore to complete before December 31.

This approach misses the point. An RMD is one of the most important annual decisions in retirement planning. How you handle it can influence your:

• Taxes
• Medicare premiums
• Charitable giving
• Investment allocation

It can also affect the legacy you leave to heirs.

The question is not how to merely satisfy the RMD requirement, but how this year's distribution should fit into your spending, tax strategy, charitable goals and estate plan.

Get organized, then get clear on what you need

One of the biggest challenges with RMDs has nothing to do with taxes. It is simply tracking down every account and calculating what you owe, which turns into a headache when your savings are scattered across several institutions.

If you are approaching retirement, consolidate your retirement accounts wherever possible. Fewer accounts require a simpler calculation, and a simpler calculation means fewer costly mistakes.

Once your accounts are in order, determine how much money you actually need from your IRA.

If the full RMD covers your living expenses, the decision is straightforward.

If it does not, the RMD becomes a spending plan waiting to be written, one that can support charitable giving, fund a Roth conversion, get reinvested or build a cash cushion.

That shift — treating the RMD as a cash flow event rather than an automatic spending requirement — unlocks everything that follows.

Let charitable intent drive a QCD and watch your AGI

A qualified charitable distribution, or QCD, lets anyone who is 70½ or older send money directly from a traditional IRA to a qualified charity, excluding it from taxable income entirely.

For 2026, the limit is $111,000 per person, and each spouse with their own IRA gets a separate limit.

The temptation is to treat this purely as a tax trick. Resist that. Start instead with a simple question: How much were you already planning to give to charity this year?

If the answer is $25,000, a QCD is simply the most efficient way to move money you were donating anyway.

Here is where the strategy gets powerful. Picture a 75-year-old with a $1.5 million traditional IRA and a $60,000 RMD. She needs only $20,000 for living expenses and already gives $25,000 a year to charity.

Instead of taking the full $60,000 as taxable income and separately writing a $25,000 check, she can direct $25,000 straight from the IRA to charity through a QCD. That portion never touches her tax return. The remaining $35,000 comes to her as a normal distribution. Same total withdrawal, same charitable gift, considerably less taxable income.

The reason this matters goes beyond the tax bracket. Most people fixate on their marginal rate and stop there, but a QCD reduces adjusted gross income (AGI) directly, and AGI quietly drives a lot of other costs in retirement.

A higher AGI can trigger Medicare IRMAA surcharges, increase the taxable portion of Social Security benefits and push you past thresholds tied to other deductions.

Before adding an additional $30,000 or $50,000 to your income, do not just ask what tax bracket that lands in. Ask what it does to your entire financial picture for the year.

Time your RMD deliberately

There is a common instinct to take the RMD in January and be done with it. Unless you need the cash immediately, there is usually no advantage to rushing.

Waiting lets the year's full tax picture come into focus first, including income, charitable plans and whether a Roth conversion makes sense.

The RMD portion itself cannot be converted to a Roth IRA, but you can take the required distribution first and then, separately, convert an additional amount if your bracket allows it.

The real annual question becomes a combination of:

• How much goes out as the RMD?
• How much becomes a QCD?
• How much room remains for a Roth conversion?

Getting that mix right, year after year, is where real tax savings accumulate.

Also, remember that any amount withdrawn beyond your RMD does not carry over to reduce next year's requirement, since every year resets on its own. Extra distributions should have a clear purpose, whether that is a large expense, a gift or a Roth conversion, rather than being taken casually on the assumption they will count later.

Timing extends to the assets themselves, not just the calendar. When it is time to raise the cash, do not simply sell whatever happens to be sitting there. Look at the full portfolio first.

If stocks have run up and your allocation has drifted more aggressive than intended, the RMD is a natural chance to trim appreciated positions, generate the required cash and rebalance at the same time, turning a required withdrawal into a disciplined investment decision instead of an afterthought.

Think beyond this year

For retirees with substantial IRAs and genuine charitable interests, QCDs can become part of a longer-term legacy strategy.

IRA assets left to heirs are generally taxed as ordinary income when withdrawn, while assets given to charity through a QCD are not taxed at all.

Directing a portion of the IRA to charity during your lifetime, rather than leaving the whole balance to be taxed later, accomplishes the same charitable goal more efficiently than doing it through your estate. And by drawing down the IRA instead of a taxable account, which gets a step up in basis at death, you may leave your noncharitable heirs better off, too.

The retirees who handle this best treat it as an ongoing process rather than a once-a-year fire drill.

Early in the year, estimate income, review charitable intentions and identify the right RMD and QCD amounts.

Confirm everything is executed well before the December rush and keep simple records of every QCD, including the charity, the date and the amount, since documentation matters for tax reporting.

Markets shift, tax laws change and personal goals evolve, so an RMD strategy built once and never revisited will eventually fall out of step with your life.

The retirees who get the most value out of this season stop thinking of it as a withdrawal requirement and start treating it as one of the most useful planning conversations they have all year.

Related Content

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• Got $2.5 Million Saved for Retirement? Here Are the Huge RMDs You Must Take at 73, 75, 80 and 85
• 5 Costly RMD Mistakes That Will Put a Dent in Your Savings (and How Early Planning Can Help)
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

More retirees are asking AI the money questions they used to ask financial advisers.

The appeal is obvious. AI chatbot answers arrive in seconds, nothing is embarrassing to ask, and it costs nothing. The problem is that a wrong or incomplete answer looks exactly like a right one.

This guide explains why AI gets retirement questions wrong and provides seven steps you can use to check an answer before you act on it.

Why AI gets retirement numbers wrong

A chatbot does not look anything up. It was trained on a large body of text gathered up to a cutoff date, and it answers by predicting which words most plausibly come next. When it states a figure, it is reproducing what appeared most often in that text — it's not reading a current government page.

Retirement rules are badly suited to that, because most of the important numbers change every year.

Contribution limits are the clearest case. For 2026, the amount that can go into a 401(k) rose to $24,500, and the IRA limit to $7,500. A year earlier, they were $23,500 and $7,000. A model trained before that announcement would provide last year's figures with complete confidence, and nothing in the phrasing would suggest the numbers are stale.

Other figures can be changed by legislation, after the former figure has circulated for years. For example, the age when retirees must start taking required minimum distributions (RMDs) used to be 70½, then it was 72, then 73, and it reaches 75 in 2033. All four ages appear across the internet, usually with no date attached.

Basically, AI handles concepts reliably and specifics unreliably. The seven steps below are built around that split.

Step No. 1: Check the year on every number

Any answer containing a dollar amount, an age, a percentage or an income threshold needs a date attached before it is worth anything.

Ask the chatbot directly which tax year the figure applies to. When asked, a chatbot will often admit its information may be outdated, even though it volunteered the number without hesitation a moment earlier.

Consider any figure with no year attached suspect.

Step No. 2: Ask which agency sets the rule

This is the one question a chatbot answers reliably, because it is a concept question rather than a numbers question.

Information about contribution limits, RMDs and tax treatment should come from the IRS.

Benefit amounts and claiming ages should come from the Social Security Administration.

Information about Medicare premiums and income surcharges (IRMAA) should come from Medicare.gov and the SSA.

Pension rules sit with the Department of Labor.

Knowing which agency oversees the rule turns vague verification into a single page to open.

Step No. 3: Verify at the source

Once you get an answer from a chatbot, go to the agency's own site rather than simply reading a summary. For example, federal agency pages will state which year a figure applies to.

Skipping this step could be expensive. Missing an RMD triggers a penalty of 25% of the amount that should have been withdrawn, reduced to 10% if corrected quickly.

On a $40,000 distribution, that is $10,000 for a deadline a chatbot might have gotten wrong.

Step No. 4: Feed it your own circumstances

A chatbot answers in generalities unless you provide specifics.

Supply the details that actually influence the outcome: Age, types of accounts, pension income, state of residence and marital status, including whether your spouse has their own earnings record. (Never provide details that are personally identifiable, though.)

Then compare the answer with the answer you get when you provide none of those details.

If the response barely changes, then the advice for your particular situation cannot be trusted.

This matters most when it comes to thresholds. Medicare's IRMAA works as a cliff rather than a gradual increase — income above $109,000 in 2026 for a single filer and $218,000 for a couple.

A chatbot that suggests you do a Roth conversion without making any reference to IRMAA can lead to you facing four figures in annual premiums two years later (since IRMAA is based on your income two years ago).

Step No. 5: Ask the same question twice

Pose the question again in different words, ideally on a different day, and see whether the original response holds.

Then change one detail, such as adding five years of age or removing pension income, and check that the answer moves in a direction that makes sense.

Answers that swing wildly when you rephrase the question are being generated, not recalled. When two responses conflict, the tie gets broken by checking the relevant agency's page, not by asking the chatbot a third time.

Rawad Baroud, CFO of ZeroGPT, says that consistency should never be confused with accuracy when evaluating AI-generated information. "Generative AI can produce an answer that is clear, detailed and convincing without having verified the facts behind it.

"Asking the question again can expose inconsistencies, but getting the same answer twice doesn't prove it is correct. For financial information, the final check still needs to be against an authoritative source."

So use repetition as a warning system, not as proof of accuracy. Whether the answers are different or the same, you should always verify any important numbers or rules.

Step No. 6: Ask what it left out

Chatbots answer the question asked and rarely flag what sits outside it.

Two prompts do most of the work here:

• Ask what assumptions the answer depends on
• Ask what would make this the wrong move

A recommendation to convert to a Roth, for instance, should surface the tax due this year, the effect on Medicare premiums and the five-year rule before it counts as complete.

According to Gregor Emmian, deputy chief growth and finance officer at Rise, "The most dangerous AI answers are the ones with no caveats attached. If a chatbot tells you to convert to a Roth or claim (Social Security) early without mentioning what could go wrong, that's not a complete answer — it's half of one.

"Retirees should treat 'what am I not being told?' as a mandatory follow-up question, not an optional one."

An answer that mentions no downside is incomplete — every retirement decision requires tradeoffs.

Step No. 7: Consult an adviser when an irreversible decision is involved

Some actions cannot be undone once you do them. Claiming Social Security, converting a large sum to a Roth, buying an annuity or taking a pension as a lump sum all belong in that category.

The cost of a wrong turn here is permanent. Claiming Social Security at 62, for someone whose full retirement age is 67, reduces the monthly benefit by about 30% for life, and that reduction extends to the survivor's benefit.

On a $2,400 benefit, it is roughly $720 a month, or more than $8,600 a year, for as long as either spouse lives.

For anything in this category, print the chatbot's answer and take it to an adviser or accountant. Ask which parts are wrong and why.

That conversation will be quicker and less expansive than one you start from nothing, and it puts the specifics in front of someone who can be held responsible for them, which no chatbot can.

The bottom line: If you're using AI this way, the main thing you should keep in mind is that the moment an answer sounds the most authoritative is the moment when you should question its accuracy and explore further, preferably through the relevant agency.

Related Content

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• 6 Ways to Use AI to Improve Your Financial Life
• How to Protect Your Privacy While Using AI
• Sitting on Housing Wealth? How to Safely Turn Home Equity Into Retirement Income
• An Expert Guide to Your Financial Priorities Decade-by-Decade: What to Focus on in Your 30s, 40s, 50s and 60s

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

Do you remember the spring of 2021? It felt like we had all been let out of COVID-19 jail. Sure, there were new variants of the virus, but most people were vaccinated and eager to swipe, tap or hand over cash.

We promptly took our then-3-year-old to Jamaica. This was the inflation liftoff.

An eagerness to spend, a money supply that was about 30% higher than pre-pandemic levels and supply shortages from shuttered factories quickly caused prices to accelerate.

If you'd told me then that I would still be writing about inflation five years later, I would have been seriously concerned. But here we are.

We have now been through what most consider an interest rate-cutting cycle that was cut short. We also have a new Federal Reserve chair, Kevin Warsh, who has been (not so) tacitly tasked with cutting rates at the same time inflation has reawakened.

The two things are at odds: Raising rates is supposed to cool inflation by making things more expensive, while cutting rates is stimulative to the economy and often inflationary.

The majority of this inflation is headline inflation (food and energy), caused by the oil shock in Iran. Because of this, the market had moved from a less than 1% chance of a rate hike at the beginning of 2026 to an almost 45% chance as of mid-May.

Indeed, in September, the Fed raised the federal funds rate by 25 basis points, to 3.75% to 4%. The Fed is expected to raise the rate again before the end of the year.

So, here's what that means for retired folks.

A bounce back in cash rates

It doesn't seem that long ago when cash was paying basically nothing. More recently, you could get cash equivalents over 5% in a high-yield savings account.

Today, most things have settled in the mid-3% range. In the 5% range, it was a pretty easy decision for retirees who needed liquidity to keep it in cash.

In the 3% range, it's a tougher question. That question is a bit easier to answer now that the Fed has hiked rates.

If you still have a lot of cash sitting in a checking account at a large bank, there is probably a better way.

Most brokerage houses have a plethora of cash-equivalent options that pay significantly more.

Good for guaranteed income

Similar to cash equivalents, guaranteed income in the form of fixed annuities tends to move up with interest rates. The higher the rate environment, the more an insurance company is willing to pay you for the same pot of money you turn over to them.

In the previous hiking cycle, we were able to replace the majority of our clients' annuities with higher income guarantees — often significantly higher.

If you have an annuity issued between 2000 and 2022, it's worth having it looked at.

Time to de-leverage

When rates rise, floating-rate loans become more expensive.

For our clients, floating-rate loans most often take the form of home equity lines, securities-backed lines of credit and adjustable-rate mortgages. If you have floating-rate debt and some money in the bank, it may be a good time to pay down those debts.

My wife's car lease ended in 2022, and we were quoted rates of 9% or more for five-year car notes. Though it shouldn't be anything like last time, this is a strong argument for buying vehicles in cash should the funds be available.

I often use 5% as a sort of back-of-the-envelope line in the sand. If the note is over 5% and you have the cash, you probably want to do that. Below 5% and financing likely makes sense.

Your financial plan should dictate this decision. In our software, we can raise the rate and then see what happens to the plan success rate if a client were to accelerate the paydown. You can play around with that same software for free.

Continued struggles in the broader housing market

If you were waiting for mortgage rates to come down to bring more buyers into the pool for your home, you'll either have to keep waiting or pull off the Band-Aid and sell.

Nationally, the housing market is struggling. There are many more sellers than buyers. It's the opposite of the insane environment coming out of the pandemic.

However, real estate is hyperlocal, and we have clients who are selling their homes with little issue.

Zooming out, higher rates are bad for the housing market. Buyers focus on what they can afford in a monthly payment more than the total price.

As interest expense goes up, that same monthly payment buys less, which should bring down housing prices.

It's good for buying, but not so good for selling.

How you can help your kids if they're trying to buy a home

Just as the pool of buyers for your property is now reconsidering a purchase, your adult children who are trying to get into the market are probably equally frustrated.

In 2022, someone who took on a $1 million, 3% mortgage was paying $2,500 per month in interest expense. Today, that same loan amount at 6.5% has a monthly interest expense of about $5,400. That's $2,900 more per month for the same loan amount.

There are a lot of factors to consider before writing a large check to your kids to help them buy a home.

Here are a few to keep in mind for intrafamily loans:

• The loan must not materially impact your situation: While this is a secured loan and you could take ownership of the home should they default, that is an ugly situation. Lend only money you know you don't need.
• This is an actual loan, not a gift: Interest must be charged at a minimum federal rate, which can be referenced at the IRS website.
• Lending money can make Thanksgiving dinner uncomfortable: This isn't just a math problem. You have to accept that you are signing up for a long-term financial arrangement within your family. For some, that's a plus; for others, it's a red line.

If the stars align, these loan rates will be lower than what your kids could get in the market, and the interest you earn will typically be higher than what you're earning at the bank.

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• Four Things to Consider Before Giving Your Kid a Down Payment

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 women find themselves managing a financial life that became theirs alone, often after divorce or a loss, at the end of a career they built. And it tends to arrive on top of everything else they're already carrying, because women are so often the ones taking care of everyone else first — the kids, the aging parent — which means their own retirement plan is the one that never gets made.

You can see the result on a desk. The stack of papers, statements, policies, beneficiary forms and the envelopes you've been meaning to open grows taller every month.

For many, the easiest response to that stack is to look away and hope it somehow resolves itself. It rarely does, and the longer important financial decisions sit untouched, the harder they can become to unwind.

But there's a version of this that looks completely different: A Saturday morning, a cup of coffee and a single page laying out everything you'll accomplish this year in three or four clear steps.

Closing the distance between those two pictures comes down to several key things I've learned over 24 years as a wealth manager: Asking the right questions before focusing on investment returns, working through your finances as one connected system rather than a pile of separate decisions, and refusing to build a plan that takes care of everyone you love but leaves you out of it.

Why I see this differently

I didn't arrive at this work from a textbook. I married young, and we had two children. Then the marriage came apart, and I found myself raising my young kids largely on my own.

Suddenly, I wasn't just managing their day-to-day lives; I was carrying the responsibility for their financial future, too — college, first cars, opportunities and all that I wanted to make possible for them.

The lesson I took from it is one I'd offer any woman: A financial future can land on one person with no warning, and hoping it won't isn't a solid plan.

At 24, I was also diagnosed with cancer, and for a time, I needed people to care for me. That taught me something no spreadsheet could: Almost none of us is as prepared as we think for the moment we need care, emotionally or financially.

I haven't experienced widowhood, but I know loss and I know illness. Those experiences gave me a deep respect for the emotional and financial weight women can carry when life changes without warning.

I'm also one of the professional businesswomen I serve, which taught me one of the most common mistakes of all. You pour everything into your work, tell yourself you'll get to your personal finances later, and "later" keeps moving.

When a woman who has built a successful career thinks about stepping away from work, she's untangling two things at once: Her identity from the work that shaped so much of her life, and her financial future from everything she worked so hard to build.

Those experiences shaped how I work, and what follows is what they taught me.

Ask the questions that actually matter

When a woman sits down with me, she almost never opens with a question about her rate of return. She opens with the people she loves. Will my family be covered? Can I help my aging parent? Those are the questions that keep her up at night, and they tell me far more about what her plan needs to do than any performance number could.

There's another question women rarely say out loud, and it matters just as much: What do I want my life to look like now? Can I build a life I love, too?

You don't have to choose between these questions, but you do have to name them, because every one takes money, planning and foresight. I know, because I did it myself. My kids are 18 and 22 now, and both know they had their opportunities because their mother asked those questions about a decade ago and then made a plan to make it happen.

Use a framework to help guide your planning

Answering those questions takes more than good intentions; it takes a way to work through everything at once. Here's a framework you can apply to your own financial life. I call it SMART, and its five parts cover what a plan should include: How you spend, what you make, how you invest, what you leave behind and the strategy for tax efficiency.

Spend. Spending isn't one number. Over 30 or 40 years of retirement, some expenses are inflationary, some fixed, some one-time, some seasonal. It's about how much you spend and, just as importantly, when.

Make. It's not simply about how much you make today, but how much you make over your lifetime — and how thoughtfully you coordinate these income sources so they are there when you need them most.

Assets. Through market cycles, including 2008 and COVID, I learned the conviction I hold most firmly: It's not about timing the market; it's about time in the market.

Remaining assets. For your heirs, the question isn't what you leave behind but how you leave it to them. Without thoughtful planning, an inheritance can create unintended taxes and complexity for the people you love. This is where legacy, estate, trust and risk planning come together.

Taxes. The goal is to lower your lifetime tax bill, not just this year's. Wealth isn't about how much you make. It's about how much you keep.

Focus on the whole picture, not one component

I keep a Rubik's Cube on my desk because it mirrors how the SMART process works: Turn one face, and the others shift. Spending affects taxes, taxes affect what your heirs receive, and an income decision at 62 changes what's possible at 80.

A spreadsheet treats each as its own column, but your life doesn't work in columns. So don't optimize one variable at a time; sometimes the right move is to undo a step, because it sets up the two that follow.

And because every move depends on where you're headed, the only place to start is your ideal retirement lifestyle. Start there, name it specifically, and reverse-engineer the steps that help get you there.

Write yourself into the plan

This is where I see women shortchange themselves. When they name that ideal life, it's almost always built around other people: The grandchildren's education, the trip the whole family takes, the cushion that protects everyone if something goes wrong. Those are worthy goals. But notice what's missing. Her own line, the one that funds what she wants, is the first to get trimmed when the numbers feel tight, and often it was never written in at all.

I treat that line as non-negotiable, and I'd urge you to do the same in your own planning. When you map out the years ahead, give your own life a specific, funded place on the page: The second act you want to start, the part-time passion, the standing date with friends, the travel you keep deferring.

Put a number on it, the way you would your children's or grandchildren's tuition.

A plan that assumes you'll make do with whatever is left over isn't balanced; it's just the old habit of putting yourself last, written into a spreadsheet. The equation only solves when both sides, the people you love and the life you want, are actually on it.

What planning is really for

I often think about women a generation ahead of mine who spent their whole lives caring for everyone else and never once pictured what they wanted for themselves. They reach retirement and ask, almost in surprise, what now?

I want a different next chapter for the women I work with, and it's within reach for any woman willing to do the work: Ask the questions that are really about the people you love, run them through a process that treats your finances as one connected whole, and make sure your own life is written into the answer.

Do that, and the stack of papers and the dread that comes with it turns into a Saturday morning, a cup of coffee and one clear page. That is what it means to solve the equation: Not choosing between the people you love and the life you want, but building the one plan that carries both.

You can take care of everyone, leave behind something you're proud of, and still keep a life that's unmistakably your own. You just have to put yourself on the page.

Related Content

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• I'm a Financial Planner and an Only Child: Here's How to Navigate Your Parents' Older Years Solo (and Why I'd Recommend a Postnup)
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• 3 Financial Hurdles Coming Up for Women: How to Overcome Them, From a Financial Planner
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

A 60-year-old retiree is reviewing her retirement plan. Her accounts, Social Security and withdrawal strategy all appear to work through age 85.

Then she asks the question that changes everything: "What if I live as long as my mother did? She made it to 95."

In one sentence, a 25-year income plan becomes a 35-year income plan. The issue is not whether you will live to 95; it is whether your income plan can survive if you do.

The same assets may need to fund another decade of withdrawals, market cycles and inflation. That possibility is more common than many plans account for.

According to the Social Security Administration's current actuarial life table, roughly 8% of men and 14% of women who reach 65 survive to 95.

That is why age 95 belongs in your core retirement income plan, not just in long-term care conversations.

A longer timeline changes the withdrawal math

A withdrawal percentage can create false comfort if the timeline is wrong. Recent retirement-income research estimates a 3.9% starting rate for 30 years of inflation-adjusted spending with a 90% probability of funds remaining. At 35 years, the modeled rate falls to 3.5%.

For a $1 million portfolio, that difference reduces first-year withdrawals from $39,000 to $35,000 before taxes and fees. Weak returns in retirement can make the higher spending level harder to sustain.

Retirement rarely gets cheaper simply because the projection ends. Even a steady 3% annual increase in prices would turn $60,000 of spending today into roughly $146,000 after 30 years and almost $169,000 after 35.

Build the floor before reaching for more return

An income floor starts with a simple calculation. Add up your essential annual expenses. Separate expenses that must be paid — housing, food, utilities, insurance and basic transportation — from those that can change, such as travel.

Then subtract reliable lifetime income, such as Social Security and a pension.

This is where protected lifetime income, including income from an annuity, may help.

Research from the Stanford Center on Longevity found that pooling longevity risk may support higher expected lifetime income in some scenarios than self-funding it.

An annuity with a lifetime-income feature is one way to close that gap, but it is not right for everyone. It may fit retirees who want help covering essential expenses for life and are comfortable trading some liquidity for dependable income.

Too often, retirees consider protected lifetime income only after a portfolio takes a hit. It may be more useful if you select it while you still have planning flexibility and adequate liquid reserves.

The goal is not necessarily to cover every dollar of spending with protected lifetime income. It is to protect the bills you cannot afford to miss, while keeping liquid assets for growth, emergencies and discretionary spending.

Keep the conversation about income, not products

Before comparing annuity illustrations, riders or product features, start with four practical questions:

• Which monthly bills do you need to cover no matter what the markets do?
• How much dependable income is already coming in for life?
• If the market fell 20% next year, where would spending money come from?
• How much savings do you want available for emergencies?

Those answers clarify what your income strategy needs to accomplish before product features enter the conversation. Fees, surrender periods, inflation features, death benefits and access to principal can change the result.

FINRA cautions consumers to understand costs and restrictions. Guarantees depend on the issuing insurer's financial strength and claims-paying ability.

Keep a separate reserve for surprises and an inflation strategy because a fixed payment can lose purchasing power.

Make age 95 part of the next review

At your next financial plan review, rerun the strategy through age 95, test the first five years against a severe market decline and inflate essential expenses across the full horizon.

Then ask: "Which bills do I never want the market to vote on?" If too many essential expenses depend on strong returns arriving on schedule, consider building a stronger income floor while you still have choices and liquidity.

A durable income floor may give retirees more confidence to use the rest of their portfolio for the life they planned, even if that life lasts longer than expected.

Related Content

• 4 Ways to Navigate the Unpredictable Pressures of a 30-Year Retirement, Courtesy of a Financial Planner
• How to Master the Retirement Income Trinity: Cash Flow, Longevity Risk and Tax Efficiency
• How to Manage Longevity Risk in Retirement: 10 Solutions
• The Longevity Blueprint: 4 Everyday Signs You’re Tracked for a Longer Life
• Income and Life Expectancy Not Adding Up? An Annuity Could Solve the Equation

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.