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

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

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

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

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

First, make sure you have hit the federal ceiling

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

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

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

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

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

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

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

Understand what a cosigner really signs up for

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

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

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

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

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

The trade you are actually making

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

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

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

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

Here's a short checklist for before you sign:

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

The bigger picture

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2. Teach credit before they need it

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

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

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

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

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

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

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

3. Help them start saving and investing early

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

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

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

4. Model the behavior you want them to learn

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

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

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

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

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

As Amy Zamikovsky, JD, CFP, and senior wealth adviser at Focus Partners, says, "Extra retirement income allows retirees the ability to more easily absorb financial surprises, which is important while our broader macroeconomic reality still looms."

But earning extra money doesn't have to mean retail work or committing to a job you find boring. (It might not even mean working at all.) We asked financial pros for creative ways retirees are generating more income.

1. Sell your expertise (and your network)

You may have spent many years in the workforce honing skills and learning your industry inside and out. In retirement, you can take advantage of that knowledge in a couple of ways. First, you can consult in your former field on a schedule that works for you. Brandy Barnes Marion, retirement plans education manager at BOK Financial, says you can also take the concept a step further by selling your expertise.

"Expert networks pay retired operators and executives by the hour for short calls with investors and researchers," she says. "Medical schools pay standardized patients. Law firms pay mock jurors. Forty years of knowing how a distribution center actually runs is worth real money to somebody."

Other such jobs include acting as an expert witness, an industry mentor and a peer reviewer or grant reviewer.

Tip: These gigs can be lucrative, and they aren't necessarily time-consuming. You can work them into your schedule around vacations or other plans. Some of these jobs can be done virtually, though they may command a lower hourly rate.

2. Work a seasonal job with fringe benefits

Committing to an ongoing part-time job or gig work may not be optimal in retirement, as it might too closely mimic the work schedule you're trying to move on from. That's why Elias Friedman, CFP and founder and senior wealth adviser at Kadima Wealth, suggests pursuing seasonal work.

"Seasonal jobs at golf courses, museums, theaters, or parks can be fun, a great way to make new friends, and stay active," he says. "There are other perks retirees can receive by working at these places, too."

Tip: If you work in a museum or theater, your gig might include free admission or comp tickets for friends and family. You can check sites like Indeed for listings.

3. Rent out space you don't need

You'll often hear that renting out unoccupied space in your home, like a spare room, basement, or finished garage, is a great way to generate income in retirement. But it also means sharing your living quarters with another person. That's why Friedman suggests a different approach.

"I have seen interesting and creative things to get additional income," he says. "For example, this could include renting a garage, parking space, storage area, spare room, or even an RV space."

Tip: Apps like Neighbor can help you rent out your driveway, shed, garage or other home space, providing you with $1 million insurance coverage and charging a processing fee of about 5%. If you have an EV charger at home, you may also want to bundle it into a parking space rental. However, before you sign up, check your home insurance policy and local regulations to make sure it won't affect your coverage and is allowed in your neighborhood.

4. Turn clutter (yours and your friends') into income

It's pretty common to accumulate a lot of stuff in the course of your lifetime. Ernie Wingard, RFC and adviser at Capital Choice Financial Group, says you can turn unwanted items into a goldmine during retirement.

"The most creative thing I've seen is a retiree who built a resale marketplace for her own friend group," he explains. "She takes pictures, posts them online, and takes a small commission for her efforts. After all is said and done, it brings in another $400 or $500 a month."

Tip: Learn about collectibles that are genuinely valuable and niche areas such as silverware and vintage stereos.

5. Launch a YouTube channel

YouTube may not be the most popular app among retirees, but Wingard insists it offers solid opportunities to make money.

"I've also seen some really creative YouTubers in the retirement space," he says. "Lots of shared experiences from their previous field, passing those stories on to future generations, and even providing consulting for people trying to get a leg up in that same industry."

Wingard says one person he knows has a channel where he talks about golf from his perspective of being a caddy for several decades.

"He teaches people how to pick up caddying professionally while teaching golfers how to read greens for themselves," Wingard says. "Talking about your life from that perspective can be a lucrative endeavor, and it can get really cool with some sponsorships, too.

Tip: Don't expect to make money at this type of venture until you have invested substantial time building a brand. Even then, you may not turn much of a profit if you can't grow an audience, so research the competition and various platforms first.

6. Do something you love

When you're in your 30s, 40s, or 50s, you may have to take a job that covers the bills, even if it's not something you're particularly passionate about. But if you're going to work in retirement for extra money, Zamikovsky says it pays to pursue something you enjoy.

"Once upon a time I worked with the loveliest retired couple," she says. "Neither one of them had any experience in photography, but what they lacked in technical experience, they more than made up for with their inspirational love for each other and natural talent at being great with people."

That couple, Zamikovsky says, went on to establish a lucrative photography business.

"With their solid reputation, they booked regular weddings and created a fun and meaningful income stream. Being wedding photographers fit who they were and allowed them the opportunity to build something meaningful together."

The takeaway?

"Don't confine your search or ideas to the tasks and jobs you did pre-retirement," Zamikovsky says. "Instead, be honest with yourself about what it is you're good at, what you like to do, and what unique knowledge or product you can offer the world. If you're going to work during retirement, the work should truly reflect who you are and be something you enjoy."

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The problem is that millions of displaced professionals can't simply pivot overnight from cognitive, credential-heavy careers into physically demanding trades — without major financial and psychological repercussions.

If employers and policymakers keep pretending the answer to AI's impact on white-collar jobs is a straightforward retraining problem, they risk creating a generation of displaced professionals who feel economically abandoned by the career paths and systems they were told would protect them.

The skilled trades labor shortage isn't a manufactured narrative that appeared out of nowhere. Fields that include electrical work, HVAC and infrastructure maintenance all need workers, and younger people questioning the value of expensive four-year degrees are pursuing these pathways instead.

Not a universal solution

The problem is that the current AI workforce narrative treats the trades as a universal solution for white-collar displacement.

That framing can sound practical and reassuring. There are open trade jobs with clear demand, and career paths appear to be less susceptible to automation in the near term.

But for employers and policymakers trying to calm fears about AI, "go learn a trade" is an overly tidy answer to a far messier problem.

The scale of the disruption that lies ahead makes that answer even less convincing.

AI systems are compressing parts of the office economy.

• Marketing teams are operating with fewer people
• Entry-level analysts are competing against systems that can summarize reports, generate presentations, and handle administrative tasks in seconds
• Customer support, legal review, coding and financial services are encountering similar pressures

Recent estimates suggest AI can already perform the equivalent of more than one in 10 U.S. jobs, much of it concentrated in administrative and knowledge work.

Even a major expansion of trade training would only go so far toward softening the landing for displaced office workers.

Financial repercussions

The financial adjustment would be substantial. In many areas of the country, an entry-level HVAC technician earns just $20 to $25 an hour. This would be a difficult transition for professionals accustomed to significantly higher salaries.

Construction-related trade work is stable, valuable work, but it also represents a major reset for a midcareer professional who may have spent 15 years building a six-figure career in an entirely different field.

Professional careers shape routines, social identity and long-term expectations about stability and mobility. Many white-collar workers followed the path they believed would protect them from economic volatility, only to take on debt and build households on the assumption that specialized knowledge would remain economically valuable over time.

But many of those same workers are now confronting the possibility that all or parts of their accumulated expertise might be rapidly losing market value.

Emotional repercussions as well

White-collar unemployment also carries an unusually intense form of self-blame. Professional hiring systems place enormous emphasis on communication, confidence and perceived competence.

Extended displacement can quietly destabilize marriages, physical health and long-term planning while producing a private sense of shame that rarely appears in economic data.

The earnings damage can last for years, even if workers find employment again. This is particularly true when they re-enter the workforce in lower-paying sectors with weaker upward mobility.

Over time, that shift becomes more than a temporary decline in income, as it can reshape lifestyles, retirement expectations and social positioning.

Part of what makes the current AI transition so destabilizing is that it targets cognitive and status-based work. Traditionally, repetitive manual labor has been the most vulnerable during previous waves of automation.

AI training evolves quickly

The historical record for retraining deserves a realistic assessment before we determine what comes next. Large-scale workforce retraining efforts have struggled for decades to consistently return displaced workers to their prior earnings levels, often because they eventually land in lower-paying occupations with weaker upward mobility than the careers they lost.

The pace of AI development presents greater challenges. Technical skills in areas such as data, software and operations are evolving quickly. Reskilling curriculum can struggle to keep up with the systems that workers are being asked to learn.

A more nuanced workforce strategy would treat transition support as a broader economic issue instead of a narrow training initiative. Technical retraining is always necessary, but workers will also need clear transition pathways to navigate environments where the ground is constantly shifting beneath them.

The pace of AI development presents greater challenges. Technical skills in areas such as data, software and operations are evolving so quickly. Reskilling curriculum can struggle to keep up with the systems that workers are being asked to learn.

A more nuanced workforce strategy would treat transition support as a broader economic issue instead of a narrow training initiative. Technical retraining is always necessary, but workers will also need clear transition pathways to navigate environments where the ground is constantly shifting beneath them.

Midcareer workers navigating abrupt displacement might need counseling and temporary income support alongside technical certifications training and job placement.

Some companies are already funding skilled trades programs tied to infrastructure and manufacturing demand.

Still, those efforts were built to address labor shortages, not to accommodate large numbers of displaced white-collar workers.

There are still many unknowns. AI could ultimately reshape more jobs than it eliminates, and many professions might evolve through human-AI collaboration rather than outright replacement.

But uncertainty is not a strategy.

If large-scale workforce disruption materializes, retraining in trades alone will not be enough. A comprehensive response that includes soft skills development, job placement assistance, mental health support and some form of income assistance will be essential to preserve both economic opportunity and social stability.

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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.

Dear Wealth Wise: We've saved almost $4 million: $3.2 million in retirement and a $500K inheritance from my father that we put toward education and has already grown to almost $800K. I'm 53 and my husband is 54. Our children are ages 16, 13 and 10.

My husband and I work full-time but want to retire in eight years once our youngest graduates high school. Staying in our starter home helped us save, but we outgrew it years ago. We have equity in our home we could use to upsize, but we'd triple our mortgage payments and take on higher property taxes and insurance. We're not sure how much additional money we'll be able to save.

Can we just say we've saved enough for retirement plus college for three kids? In a few years, it won't make sense to upsize since our kids will be moving out. We've worked hard and would enjoy a bigger space. We're willing to downsize in eight years along with retiring. I see buying a bigger house as a very expensive rental to get more space while we see our kids through to college. — Cramped but Cautious.

Dear Cramped but Cautious: Saving for retirement often requires sacrifice. By staying in a starter home, you have clearly saved a bundle and understandably want to upsize while it still makes sense.

You might struggle to find something affordable. During the first quarter of 2020, the median U.S. home sale price was $329,000. Today, it's $410,700. That marks a roughly 25% increase. Throw in elevated mortgage rates, and it's no wonder you question if you can keep saving after upsizing.

But do you really need to worry? Let's see what our experts have to say.

You've probably saved enough for retirement

Moving to a larger home can feel like a risky financial decision when it means you don't have extra money to fund a retirement account. But Christopher Walsh, regional marketing director and financial adviser at Capital Choice Financial Group, says that assuming your future income needs aren't too outrageous, you're probably OK to stop contributing toward retirement.

"I would say for the most part, your work is done," Walsh says. "If your investable assets continue to compound around 9%, and if you follow the rule of 72, your retirement [account] should be near double what it is today."

Walsh says that if you also follow the 4% rule in retirement, that should provide an income of about $256,000 a year. Keep in mind that a 9% return might be too high a goal as you near retirement and invest more in fixed income. You'll also need to account for inflation. Still, with Social Security added in the income mix, you should have plenty with which to work.

"For most people, that's an outstanding retirement income and should also empower you both to leave quite a legacy for your children," Walsh insists.

Watch out for the expensive college years

While your strong nest egg positions you well to hit the brakes on retirement savings, it's the college years that might trip you up, says Michael McSweeney, financial adviser at Ascend Wealth Partners.

"An $800,000 balance should go a long way toward paying for college," McSweeney acknowledges. Your family's college savings are far ahead of the average 529 college savings account balance, which had slightly more than $34,000 at the end of 2025.

"That said, I'd be careful not to underestimate what the next eight years will look like," cautioned McSweeney. "Having three children close in age means there could be several years where college costs run $50,000 to $100,000 per year, or more, on top of their normal living expenses."

Given that you're looking at expensive college costs in the years leading up to retirement, the danger, says McSweeney, is being tempted to tap your nest egg to cover added expenses that arise, such as expensive off-campus housing or airfare to a distant school. That would still likely leave you with plenty of money to retire on, but it does change the math.

"That's why I would think twice about buying a larger home," McSweeney says. "The question isn't whether they can afford it. It's whether it makes sense to dramatically increase their housing costs for a home they already expect to sell in eight years."

As McSweeney points out, "A larger house doesn't just mean a bigger mortgage. It usually means higher property taxes, insurance, utilities, maintenance and furnishing costs."

There may be options other than buying a new, more expensive home

Eager as you might be to upsize while you still have kids living at home, whether it makes the most financial sense is questionable, says McSweeney. His recommendation? Renovate your current home to make it more comfortable.

"A home equity line of credit (HELOC) could be a great tool here," McSweeney says. "They can tap into the equity they've built over the years to remodel the kitchen, update bathrooms, finish a basement, add usable living space or make other improvements that help the house function better for a family with teenagers."

The payment on a reasonable HELOC, McSweeney explains, might be much lower than the cost of upgrading to a more expensive home. That way, he says, if you want to downsize in eight years, you'll have an updated home that's easier to sell.

The downside? Because they’ve lived in this starter home so long, their capital gain might already be approaching the $500,000 tax-free exclusion for married couples. Staying put for eight more years means future appreciation might be taxed. (Documenting qualified renovation costs will raise their home's cost basis, helping to offset some of that future tax bill).

The verdict: Go for it (or renovate)

All told, you can probably afford to stop saving for retirement and college and buy the bigger house you've always wanted. But you'll need to decide if it's worth the potential financial stress.

"When you factor in transaction costs, mortgage interest, property taxes, insurance, maintenance and moving expenses, they're spending a significant amount of money for something they already know is temporary. That's not necessarily wrong, but it's a lifestyle decision, not a financial investment."

If living in that bigger home is important to you, then you should go for it. You've earned it. But if you can make your current home work with a thoughtful renovation, McSweeney says, you'll likely enjoy these last few years with your kids just as much while keeping your monthly expenses lower, preserving more flexibility and putting yourself in an even stronger position when it's finally time to retire.

"They've spent years making smart financial choices, including staying in a modest home while building nearly $4 million in assets. I wouldn't abandon that strategy just a few years before retirement," McSweeney says.

A word from Wealth Wise on college costs

One of the hardest lifetime expenses to plan for (aside from retirement) is college. We agree that $800,000 for three children is a robust college fund, leaving an average of $266,000 for each child. That's almost exactly what four years of private college would cost ($60,920 times four years), according to College Board Research (PDF).

The reality, however, is that few students pay full price these days. As the table above shows, the net cost of attendance is about $28,000 less than the "official," published cost of attendance. Even if your income is high, your child might qualify for merit-based aid. Moreover, your child might choose an in-state public school which is much more affordable; the net cost of attendance at a public college was $21,340, according to the same study.

Still, it doesn't hurt to have plenty of college savings. Your child might wish to take a gap year abroad before college starts or might need more than four years to complete their educations.

Finally, if one of your children wants to go to law school or study medicine, they might need to stretch their college funds into graduate school.

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

More Wealth Wise Retirement Advice

• I Have a Sizable Roth IRA. Do I Still Need a 529 for My Grandkids' College?
• Should We Bankroll Our Son's $180K Law School Tuition Even Though We're Retired?
• Can You Actually Get Paid to Care for an Aging Parent?
• He's 49 and 'Burned Out.' Can He Afford to Quit a $200K Job?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• Is a 60/40 Portfolio Too Aggressive When You're in Your Seventies?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

Read More on Downsizing

• You May Not Want to Downsize in Retirement: Here's Why
• We Are Retired, Mortgage-Free, With $970K in Savings. My Husband Wants to Downsize to Lower Our Costs, but I Love Our House. Help!
• 6 Myths About Downsizing in Retirement

Any child under age 18 with a valid Social Security number can have a Trump Account established on their behalf. Eligible children born between January 1, 2025, and December 31, 2028, who are U.S. citizens can get a $1,000 contribution from the federal government.

With or without that contribution, you can add up to $5,000 a year to the account, and your employer can contribute as much as $2,500 of that total without it counting as taxable income to you.

Free money for a newborn is a good deal, and you should claim your kid's $1,000 if they're eligible.

But I keep hearing the same question from parents: Should I put college savings here instead of a 529 plan?

The answer is no, and the reason has nothing to do with politics. It is in the tax code.

A retirement account under a different name

Strip away the branding and a Trump Account is a retirement account with a head start. Here is how it works. Until the year your child turns 18, the money is locked in what the law calls a growth period. It has to sit in a low-cost fund tracking a broad index of American stocks, with fees capped at 0.1% and no leverage allowed. Nobody can take money out during those years — not you and not your kid.

Then the account turns 18 and becomes a traditional IRA. That single fact drives everything else. Money in a traditional IRA grows tax-deferred, not tax-free, and when it eventually comes out, the earnings are taxed as ordinary income. Pull money before age 59½ and you generally owe a 10% penalty on the taxable portion unless an exception applies.

There is one more wrinkle that catches people. Only the money you and your family contribute creates "basis." The government's $1,000, anything your employer adds and any state or charitable contributions do not.

That means those dollars, plus every dollar of growth on top of them, come out fully taxable down the road.

Why a Trump Account is a poor substitute for a 529 plan

Put the two side by side and the gap is obvious. A 529 also grows without annual tax drag, but when you spend it on qualified education costs, the withdrawal is tax-free. Not deferred. Free. That is the whole point of the account, and it is exactly what a Trump Account does not offer.

Say you use a Trump Account to help pay for college. Because it is a traditional IRA by then, an exception can spare you the 10% penalty for qualified higher education expenses. Good.

But the earnings still land on the tax return as ordinary income, at whatever rate applies. The same dollars pulled from a 529 for the same tuition bill would have come out untaxed.

For a college goal, one account is built for the job and the other is being asked to moonlight.

The 529 also just got better, which sharpens the comparison. The annual K-12 withdrawal limit doubled to $20,000. Qualified expenses now include tutoring, SAT and AP fees, and educational therapies. And 529 money can now pay for workforce credentialing programs, not just traditional degrees.

If you want to see how the vehicles stack up against your actual goal, a college savings comparison guide like the one at the website I founded, CollegeLens, is a better starting point than a headline.

So where does a Trump Account fit?

It fits — just not where people are trying to put it. Think of the Trump Account as your child's first retirement account, funded by someone else. A thousand dollars invested in a broad stock index at birth, left completely alone for six decades, is a genuinely powerful thing.

That is not a small gift, and the lock-up that makes it useless for tuition is the same feature that makes it work as long-term compounding.

A few practical tips:

• Open the account and take the $1,000. It costs you nothing and there is no reason not to claim if your child is eligible.
• Ask HR about the employer contribution. Up to $2,500 a year, tax-free to you, is a benefit many workers do not know exists yet.
• Keep your college money in the 529. If a dollar is earmarked for tuition, it belongs in the account that lets you spend it tax-free.
• Do not skip the 529 to fund this. Contributing $5,000 a year here while your college plan sits empty is optimizing for the wrong decade.

The bigger picture

New accounts arrive with a lot of noise, and the noise tends to drown out the mechanics. The mechanics are what decide whether an account helps you. A Trump Account is a retirement vehicle wearing a family-finance label, and it is a decent one, especially if someone else is making the first deposit. It is simply not the thing that pays a tuition bill.

So take the free money. Open the account, let it sit and let it compound for 50 years. Then go back to funding the account that was actually designed for the goal you are worried about.

Two different jobs, two different tools, and the mistake would be asking one to do the other's work.

One caveat worth noting: The IRS has said more guidance and regulations are still coming, and state tax treatment does not always follow the federal rules.

If you are making a large contribution, it is worth checking where things stand before you commit.

Related Content

• How Trump Accounts Compare With 529 College Savings Plans
• Why the Trump Account Rollout Is Raising Questions About Social Security
• I'm a Financial Planner: Trump Accounts Are a No-Brainer if You're Eligible (How to Apply)
• The FAFSA Quietly Got Friendlier and Stricter This Year: Will Your Family Win or Lose?
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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.

Getting the mini-fridge, the microwave, a new laptop, books, even on-campus meal plans is all part of the process of helping your child feel prepared and equipped to succeed in the next chapter of their life.

However, one essential item is often left off the checklist: Having a conversation about personal finance.

College is often when young adults start making financial decisions by themselves. Whether it's learning how to use a credit card, following a budget or deciding how to live on limited funds, the habits they develop during this time can have lasting financial consequences.

Before move-in day, parents should take this opportunity to teach their children how to make smart financial decisions from the start.

Start with a conversation

Before getting into budgeting, credit card use or opening new bank accounts, start with a much simpler conversation: Explaining how money works. Many college-age children understand spending money, but often don't understand how the financial choices they're making can either work for them or against them.

In life, money can be managed well, working for your benefit, or it can create obstacles and eventually start managing you.

While it's getting better, many of us weren't taught these fundamental financial skills in school or at home. For a long time, finances weren't openly discussed, which is why it's important for parents to break the cycle by having those conversations before their child leaves home.

Set up an emergency fund

One of the first lessons I encourage parents to teach is understanding that not every purchase has the same impact. For example, some of the things we buy, such as food, hygiene products, clothing and school supplies, are necessities that will eventually have to be replaced.

Other purchases have the potential to earn money or increase in value over time. These can be investments, starting a business and renting out property.

Money should also be set aside in an emergency fund, for example in a cash savings account, to help cover unexpected expenses, such as a car repairs, medical bills or a sudden job loss.

Saving these dollars and using them for emergencies only can help avoid taking on debt that could take years to pay off, or taking from your future by selling long-term investments and other valuable assets.

Use credit sensibly

College is also the first time many students take out their first credit card. While using credit responsibly can help build a positive credit history, it's important to teach them that a credit card is not an extension of their income.

They don't own this amount of money to spend — they're borrowing it to use now and will be held responsible for paying it off later. It's a loan. And loans carry interest.

When statement balances aren't paid in full each month, they start accumulating interest. This means that a $200 shopping spree could have the potential to end up costing $500-plus once that loan is paid back. This can create consequences that follow them long after graduation.

When it comes to credit card use or the impacts credit history can have on future opportunities, I like to tell families to introduce credit scores by explaining them as a lifelong financial report card.

The behaviors students fall into now — paying bills on time, keeping balances low, living within a budget and saving — can influence every milestone in their future, from buying a car to qualifying for an apartment or loan or even securing their first job.

That's why developing good financial habits from the beginning is crucial. It's much easier to build healthy habits early than to repair poor ones in the future.

Learn from mistakes

Through this process, it's also important for parents to remember that just because their student is leaving for college, it doesn't mean they have to stop being involved in their child's finances.

Continuing to provide additional guidance and support, especially during those first few months, can help reinforce healthy habits while giving students the opportunity to learn from small mistakes before they pose a risk to future financial security.

This doesn't mean controlling every purchase. The goal isn't to remove mistakes entirely. Instead, putting together a simple budget, reviewing recent purchases or setting reasonable spending limits on first-time credit card use until the child has demonstrated they can use it responsibly are all healthy ways to remain a part of your child's finances while still giving them the room to learn from their mistakes.

Build strong financial foundations

One of the most valuable financial lessons parents can teach their college-bound child is to think beyond the present.

Before they make a financial decision, encourage them to consider how it might affect their future. Whether it's taking on unnecessary debt or prioritizing saving for the future, whatever choice they make now can shape the opportunities they'll have in the future.

As your student heads off to school, use these final moments of summer as an opportunity to lay that foundation. As well as maximizing your time with them, talk to them about how money works, share mistakes you hope they avoid making and continue to reinforce the importance of making thoughtful financial decisions.

This will not only help them prepare for the next four years, but also give them the tools to build lifelong financial independence.

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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 businesses, adopting AI isn't just about technological capability. How it fits into a company's culture and systems is just as important.

AI tools as standard

Thanks to tech companies' race for AI dominance, it's never been easier for businesses to become "AI-optimized." Enterprise software now comes with AI integrated into email and basic productivity tools as standard, which means teams can use tools such as Windows Copilot or Google Gemini for practically anything.

But it's often given to employees without clear instructions or guidance. The AI tools employees most commonly use are large language models that run on user-generated prompts and back-and-forth dialogue, so most leaders assume their staff can and will figure it out for themselves.

It's imagined that through back-and-forth prompt engineering, they will eventually get the outcome they're looking for.

Research has revealed a significant gap between companies' desire to use AI and their employees' understanding of how best to do so. According to Slingshot, 77% of employees report being confused about how to use AI in their jobs, while 56% of employees in a KPMG report said they were making mistakes as a result of AI.

This hugely transformative technology is being unleashed on employees. Instead of guiding them through how to use it, it's being treated like a simple tool they can "figure out" for themselves. That is a damaging mindset for businesses and their employees, and it risks client security, employee satisfaction and burnout.

This is why leaders should develop a structured, change-management process — one that considers the risks and governance of AI within the business.

AI has the potential to transform company culture for the better, but only if the technology is rolled out in a way that fully recognizes the dynamics surrounding it. Here's how firms should be rolling out AI tools to their employees.

1. Start with vision

Companies that want to be fully AI-optimized need to start by developing a plan and a vision for their AI use. With a tool like AI that has so many potential uses, this vision offers employees a framework to address their concerns.

Rather than being fearful that they're simply training their replacement or frustrated that they're being asked to do something else on top of their regular job, a vision allows leadership to articulate how they expect AI to change the way individuals work — and, equally significant, what won't change.

2. Start small

While the ease of AI integration makes it possible for companies to grant everyone immediate access, that's not the best practice for successful implementation. Change requires buy-in and sponsors from peers and leaders, which is why any AI should be rolled out with a small pilot cohort to gain support, work out kinks and prove where it works best in the business.

Company-wide technology mandates can cause stress and resentment, but having cohort champions who can co-sign that this technology really does improve efficiency builds trust.

It also creates peer-level support systems so that, when a company-wide rollout finally does come about, employees know who can help troubleshoot problems and pass on best practices.

3. Build a culture of trust

One of the most significant ways that AI differs from most other technologies — especially more specialized digital industry tools — is that it's not perfectly honed. AI continues to evolve and make mistakes — but the only way companies can improve AI use is through a culture of trust.

Employees need to be comfortable enough to raise their hands when things aren't working, but also vulnerable enough to share when they think they've uncovered something new. Refining AI use is an experimental process, and that can be deeply uncomfortable for those used to more black-and-white processes and cultures.

Firms that want employees to use AI have to set new standards within their culture, elevating and celebrating incidents in which employees are willing to learn and share through collaborative problem-solving.

The bottom line

As AI continues to proliferate across the corporate landscape, having a clear change-management plan for its introduction isn't a nice-to-have: It's a critical need. Successful AI use won't happen on its own — especially at firms that haven't invested in the culture of trust AI needs to succeed.

Employees are crying out for guidance. In the 2025 AI at Work survey, 61% of employees said they want more transparent communication from leadership about AI use. It's up to leaders now to deliver.

Companies need to adopt AI to remain competitive, but without thoughtful change management, they're destined to fall behind.

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

In other words, they're doing things that they know are wrong and violate our ethical obligations as lawyers — often while under pressure to follow orders.

While violations of legally mandated professional ethical and moral codes are common in many professions, today's story stems from an email from a young lawyer. "Ruby" was debating whether she should remain married and wanted to know "what the psychological mechanism is that transforms a fair-minded person into someone I do not know anymore."

In the beginning, he despised lawyers who frustrate fair resolutions

"(My husband and I) got married when we were in law school," Ruby wrote. "Ben would get visibly upset when professors discussed insurance defense firms that, instead of fairly resolving claims and lawsuits, did everything possible to frustrate a resolution just to build up more billable hours. They'd drag cases out, doing bad things for a buck," which Ben agreed was awful.

"After graduation, an insurance defense firm made him a great offer — and agreed to hire me as well — to establish a wills and estate planning department.

"At first, they gave Ben run‑of‑the‑mill, small cases to handle and settlement authority — which he enjoyed using. Then increasingly complicated ones came along with a long list of work to be done. He admitted that, often, much of it was completely unnecessary as the matters could have been settled promptly, saving the clients thousands of dollars.

"Mr. Beaver, one night after Ben drank too much wine, the expression in vino veritas was proven true — he blurted out, 'I do not care that these cases involve people who were injured through no fault of their own. They are money makers for the firm, and I don't give a damn about putting them through the wringer, as this increases my billable hours. And, besides, how do I know they aren't faking it?'

"Could you do a story about how someone can go from wanting to do good and help people to becoming weak, collapsing morally and doing bad things? I want to confront my husband with what he has become, and unless he gets back to his former self, I cannot remain in this marriage."

Moral disengagement in the professions

I forwarded Ruby's email to a friend of this column, psychology professor Dr. Luis Vega at California State University, Bakersfield. Vega teaches a fascinating course there, called The Psychology of Good and Evil.

"Ruby is describing something far more than simply individual weakness," Vega said. "Ben is caught in a system that reshapes a person's ethics, a psychological transformation of values under chronic pressure found in high-pressure professional cultures, known as moral disengagement/corruption of the soul.

"It is affected by the powerful virus of apathy, profit-making and feeding greed at any cost. People like Ben are engulfed in a justification of their actions, a self‑persuasion process of believing the 'victims' deserve what comes to them, and an 'I know better' attitude.

"Psychologists and marriage counselors find that spouses of lawyers and other professionals often articulate a profound moral disconnect as a reason for divorce. Notably, caving in to pressure from management to earn the firm more money — performing unjustified work that ramps up billable hours — while losing their ethical compass."

Vega added, "It doesn't happen overnight, but with gradual — required — repeated behavioral adjustments that make prior unacceptable actions seem quite normal. Ben might not be aware of what has happened, while Ruby sees the change because she knows who he was before being 'reprogrammed' by the firm.

Vega set out a road map for how moral disengagement silences an individual's conscience, driving wrongful and unethical conduct in professional settings. This leads to them conforming to the norms of the group for income, status and identity, a step-by-step process in which:

• Senior partners model the behavior that teaches associates that promotions depend on compliance. They learn that dissent will have personal, negative economic and employment consequences.
• Principles and values that were once deeply held are transformed, not because the lawyer wants to be unethical, but because the cost of resisting the group becomes unbearably high.
• When unethical behavior becomes habitual, it can destroy personal relationships through a rationalization process. Spouses become emotionally detached by continually hearing, "Everyone at the firm does it, and clients never know. Anyway, my job is to save the insurance company money, and being fair has nothing to do with the practice of law."

What makes this possible?

The following mechanisms combine to produce a husband Ruby no longer recognizes:

Cognitive dissonance reduction. Ben initially wanted to practice law economically, but his firm requires maximizing billable hours, which creates dissonance (discomfort) that the brain rationalizes so that Ben now believes, "I am being thorough, not doing unnecessary work or dragging the case out."

The slippery slope. Losing one's values happens gradually, with one legal, ethical or moral compromise after another, resulting in medical overtreatment, corporate and political scandals and lawyers who build a reputation for doing anything when the price is right.

Identity drift. Ben began his life as a lawyer with strong ethical and moral values. His work environment has become so dominant that his professional identity has replaced his personal identity. Ruby says to herself, "He is not the same Ben I married. What happened? This is not the same, wonderful guy I fell in love with."

What should Ruby do?

Vega said, "Ruby needs to say, 'Ben, if I turned into the total opposite of the person you married, would you want to stay with me? I am losing you to this law firm that has corrupted your soul. I love you, Ben. Please come back to me, back to us.'"

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.

Trump Accounts allow parents to open an investment account on behalf of any children under age 18 who are U.S. citizens. If the child is born from 2025 through 2028, the government will deposit $1,000 into the account for your child.

Thanks to philanthropic donations, an extra $250 will be deposited into the account if you live in a ZIP code with a median income below $150,000.

If your child qualifies for that deposit, opening a Trump Account is a no-brainer; it's free money!

Where things get less clear is when considering whether you should contribute your own money to the accounts. As a financial adviser at Burns Estate Planning & Wealth Advisors and an expectant father considering the best path forward for my own child, I see both pros and cons.

What are the benefits of contributing to a Trump Account?

Contributing to a Trump Account can significantly increase your child's nest egg. The federal government estimates that if you simply take the $1,000 deposit from the government, that deposit will turn into $6,000 by the time your child is 18.

By contributing just $250 per year, your child would have an estimated $19,000. Clearly, contributing to the Trump Account — even a small amount — will have a significant impact on the amount of money your child ends up with.

While the Trump Account is touted as a retirement account for your kid, your child can also make withdrawals without penalty much earlier for qualifying reasons, such as paying for college or buying their first home.

Those withdrawals could be subject to restrictions and would be taxed at ordinary income tax rates.

Employers can make contributions up to $2,500 per year into the account as well, making it a potentially attractive employee benefit.

What are the downsides of contributing to a Trump Account?

If you're considering making contributions to a Trump Account for education for your child, you should first ask yourself: Why would you use a Trump Account for education when a 529 plan grows tax-free and is tax-free on withdrawal?

The nest egg your child has after 18 years of contributions to a Trump Account could be significant. However, that's not due to any special property of the Trump Account itself; it's simply the result of compound interest over time, which you would also enjoy with other investment accounts like a 529.

Unlike with a 529, your children will have to pay taxes on the growth of money in a Trump Account when they withdraw it. I often recommend that my clients convert their IRA to a Roth IRA because, while you pay taxes on the contributions or conversions to a Roth, you don't pay taxes when you withdraw the money.

Trump Account contributions are non-tax-deductible, like a Roth IRA, but the entire amount is taxable upon distribution, like a traditional IRA. That double taxation is not as tax-efficient as other options.

When my baby is born later this year, I'll definitely open a Trump Account to take advantage of the $1,000 free deposit, but I'll also open a 529 account and contribute my own money to that, because withdrawals will be more tax-advantaged for my child.

That isn't to say this is the right move for everyone with a newborn. A Trump Account is a tool, but, as with any other investment, it's not a one-size-fits-all solution.

If the goal is to save for higher education, it may make more sense to use a 529 plan, based on the tax laws that apply to distributions compared to a Trump Account.

It will likely be less common to use a Trump Account to save for your children's retirement, as most children are beneficiaries of their parents' estate to begin with.

However, if getting a jump-start on your children's retirement accounts is the goal, a Trump Account would likely make more sense.

It's important to work with your financial adviser for advice that takes into account your unique circumstances before deciding how to set your children up for a strong financial future.

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

Dear Wealth Wise: My mother suffers from MS and now needs daily help. I'm starting to look into programs that will pay me to be a caregiver. Am I allowed to keep my regular job or will I be forced to quit? I'm a freelance consultant with flexible hours, but I can't give up that income (or not easily). I assume the pay to be a caregiver isn't great. — Squeezed

Dear Squeezed: As the U.S. population ages, a growing number of Americans are finding themselves thrust into a role they might not be prepared for — caregiving.

AARP reports that one in four U.S. adults is a caregiver, with the majority caring for another adult. Additionally, one in three caregivers is under 50, which means they may be trying to balance providing care for a loved one with maintaining a career during their peak earning years and keeping up with retirement savings goals.

Here, we have a reader who wants to step in and care for her ailing mother. But every hour she spends providing care is an hour she can't earn income through her consulting business.

While there are programs that might pay her to care for her mother, the question is: Will the income be enough to cover her lost wages? Here's what our experts say someone in this situation needs to know.

You probably won't have to quit your job

For people with strict working hours, juggling a full-time job and caregiving might not be possible. For someone with flexible hours who isn't tethered to an office, it may be doable.

Faris Flournoy is the CEO at Flournoy Health Systems, a home care management company. And he says that in this situation, you definitely do not need to rush to quit your consulting job.

"One of the biggest misconceptions about family caregiving is that you have to choose between caring for your mother and keeping your career," he says. "There are programs that may allow you to do both. Some states offer programs that compensate family caregivers while they continue working another job, particularly if they have flexible schedules."

Before reducing your work hours, contact your state's Medicaid office or Area Agency on Aging to determine exactly which caregiver programs are available, how many hours are covered, whether your parent qualifies and whether family caregivers are eligible for payment. Rules differ by state, so don't assume a program available elsewhere is the same where you live.

Don't expect caregiver pay to replace your income

As our reader correctly assumes, the wages associated with caregiver programs do not tend to be overwhelmingly generous. "Many programs cap the number of paid hours, even if you are providing significantly more care than that," Flournoy cautions.

He explains that while being paid as a family caregiver can certainly help offset some of the financial burden, it's rarely enough to replace a full-time income. Even with a flexible job, it might be challenging.

"Some caregiver programs require you to provide care during approved hours or meet minimum hour requirements, which can make managing another job more challenging," Flournoy says. "Before making any financial decisions, get clear on exactly what the program expects, how many hours it will cover, and whether those requirements fit with your current work schedule."

Flournoy also emphasizes the importance of looking out for your own financial best interests while trying to help.

"The financial impact of caregiving extends well beyond today’s paycheck," he warns. "Many family caregivers reduce their work hours, pass on promotions or leave the workforce entirely, which can affect retirement savings, Social Security benefits and long-term financial security. Those are sacrifices families often do not anticipate until they are already making them."

Evan Farr, a certified elder law attorney and retirement planner, agrees that caregiving can have more long-term financial consequences than expected.

"While the immediate costs include lost income for this calendar year, the true cost includes compounded losses from reduced savings and reduced career longevity due to interrupted employment," he insists.

Medicaid is what usually pays, but there are other solutions too

Medicaid: While getting paid to be a caregiver might be an option, there are requirements to meet, and one of those might be qualifying for Medicaid.

"Most paid family caregiver programs are funded through Medicaid, not Medicare, and each program has its own financial and medical eligibility requirements," Flournoy says.

Depending on the program, some Medicaid caregiver payments might receive favorable federal tax treatment.

Flournoy commonly sees families land in situations where they've saved too much money to qualify for Medicaid but not enough to comfortably pay for ongoing home care.

Flournoy also says that for the most part, Medicare does not have paid caregiver programs in place, nor does it pay for custodial care — the ongoing personal assistance many people need with bathing, dressing, meal preparation and other daily living activities.

Special cases: "Some Medicare Advantage plans, veterans’ benefits, and long-term care insurance policies may provide additional support, but families should not assume Medicare alone will cover long-term daily caregiving," he says.

To be clear, some Medicare Advantage plans (Part C) cover limited in-home support services or respite benefits, but they generally do not pay family members as ongoing caregivers. They might, however, cover adult daycare.

Veterans' benefits are available only if the care recipient is an eligible veteran (or, in some cases, a qualifying spouse).

Become your parent's employee: Finally, if your mother has sufficient assets to pay you directly, you could consider setting up a personal care agreement.

Your compensation must be set at a "reasonable" rate, or what you would typically pay someone else to do caretaking. The national average for non-medical in-home care was $35 per hour in 2025, according to CareScout. If you happen to be a trained nurse, you can charge more, or $90 per hour, on average.

However, be aware of the "nanny tax." If your parent hires you as a household employee, payroll tax rules might apply once annual wages exceed the IRS threshold. Check current IRS rules or consult a tax professional.

The devil's in the details when it comes to Medicaid

A big reason not to rush into a caregiving arrangement is that the nuances can be complicated, Farr says. As he explains, it's important to determine whether you can legally perform the authorized care within the authorized time frame and properly keep records of that care.

"Medicaid-paid family caregiving is not merely a family-arranged situation where Medicaid sends you a check. It is a regulated form of caregiving," Farr insists.

"The mother must meet medical requirements and financial requirements to receive Medicaid-funded (long-term care) LTC," Farr continues. "The state must also approve a care plan. The caregiver may be required to register through an agency, fiscal intermediary, or through the consumer-directed model."

Farr says that, in addition, to become a caregiver, you'll typically need a background check and training. You'll also need to see how many hours of care Medicaid approves.

"One of the largest misconceptions is that the family decides what hours of care need to be performed and then expects Medicaid to pay for those hours," Farr explains. "This is not how Medicaid-paid family caregiving works."

Rather, Farr says, each state determines what hours are allowed in the approved care plan.

Flournoy says that one challenge of becoming a caregiver is that each state administers these programs differently.

"One of the biggest differences from state to state is how many caregiving hours are eligible for reimbursement. Documentation requirements also vary," Flournoy says.

Some programs, he explains, require detailed time logs and care plans, while others have a more straightforward reporting process. Eligibility rules can also differ, including which family members can be paid.

"In some cases, spouses or legal guardians may not qualify," Flournoy cautions.

Build a robust care plan for your mom — and a financial plan for yourself

While it might be possible to get paid to care for your mom, both Flournoy and Farr recommend looking beyond the caregiver paycheck and instead focusing on a holistic care plan.

"I have seen too many families spend valuable time searching for one program that will cover everything, when the better approach is combining the right services at the right time," Flournoy says. He says that in this situation, a comprehensive plan may include personal care, skilled nursing, therapy services, hospice, and palliative care.

"The sooner families can identify what level of care their loved one needs and which programs can help along the way, the more flexibility they will have to build a care plan that supports both their loved one and their own financial stability," Flournoy says.

Farr, meanwhile, recommends consulting with an experienced elder law attorney to ensure that your mother maintains eligibility for Medicaid benefits and advise on the legal side of things.

He also says it's important to protect your family's financial well-being in addition to your own.

To that end, you might want to sit down with a financial planner to discuss how your caregiving role could affect your long-term financial goals. Even if you're able to continue working as a consultant, juggling both roles might force you to forgo income that impacts your retirement savings and future plans.

It's noble to want to step in and help your mother. But it's important not to sacrifice your financial security in the process.

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

More Wealth Wise Retirement Advice

• He's 49 and 'Burned Out.' Can He Afford to Quit a $200K Job?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

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Instead, Ward's son is living at home and struggling to find work.

"He's applied to more than 250 jobs, and I think has gotten seven interview requests," Ward lamented. "Five years ago, employers would've been having fist fights to hire him."

Ward's son's experience isn't unique. The rise of AI has made an already tight job market for new applicants even tighter.

As of March 2026, the unemployment rate among recent college graduates ages 22 to 27 was 5.6%, compared with a 3.1% unemployment rate across all college grads, according to the Federal Reserve Bank of New York.

Underemployment is an equally big issue. As of January 2026, 41.5% of recent graduates were underemployed.

The Federal Reserve also found that as of May 2026, 15% of adults ages 18 to 29 who weren't working said they couldn't find a job, while 10% were working part-time because they were unable to find full-time work.

Ward's son is trying to stay positive. For now, he's working part-time in a bookstore.

"It's been frustrating for him because now he's living with us," Ward says. "He wants to be independent. He wants to be working in this field that he trained for. When he started four years ago, there was no thought that AI was going to be taking jobs."

It's not just Ward's son who's been struggling.

"My wife and I have been planning for retirement. Now we have three of our grown children living with us," Ward says.

Ward's initial plan was to retire within five years.

"But I don't think it's going to happen," he says now. "We're going to continue working until circumstances force us to do something else because we want to have a place for our kids to be."

A troubling trend

Ward's experience isn't unique. A late 2025 AARP survey found that 75% of parents are providing financial support to a child 18 or older. That's apt to impact a lot of people's retirement plans.

Julianne Coleman is 62 and plans to retire abroad with her husband. Now, those plans are on hold indefinitely as her two 20-something children grapple with the reality of today's workforce.

Her 22-year-old, who's a recent college grad, is especially struggling.

"I just don't know how someone like him who's relatively new to the workforce and relatively green is going to find something fulfilling," Coleman says. "There's all this economic uncertainty created by the AI bubble."

Coleman's daughter, who's 26, is in the midst of a career pivot after landing a job out of college that was too AI-heavy.

"She doesn't want anything to do with AI, even though she's well-versed in it," Coleman says. "She wants to move another way because of how damaging she sees it being."

In the near term, Coleman is spending her own resources to feed her grown kids and provide a roof over their heads. Her dream of retiring abroad hinges on being able to sell her home, which she can't do with her children living in it.

"If my kids were fully independent, we would downsize," Coleman says. But since her kids only have roughly $10,000 in savings each and limited job prospects, Coleman feels stuck.

"The next 15 years are critical in terms of mobility," Coleman says. She's afraid she'll lose out on an opportunity she saved for because her kids can't leave the nest.

Mostly, however, she feels for her kids.

"I'm sad for them," Coleman says. "I feel like we had it so much better."

Data from the Federal Reserve Bank of New York points to the fact that remote work is sidelining young job applicants more so than AI right now. On the other hand, Challenger, Gray & Christmas found that U.S. employers implemented 45,849 job cuts in June, largely fueled by AI. While those cuts weren't necessarily specific to younger workers, they speak to a worrying trend.

Adam Spiegelman, founder and wealth adviser at Spiegelman Wealth, says he's seeing firsthand how much young adults are struggling.

"In my 25 years as a wealth adviser, I’ve never seen anything like this year," he says. "I’ve received about a dozen unsolicited emails from college juniors, seniors and recent grads … asking to shadow me or intern at my firm. That’s never happened before."

The trend is much broader, though.

"Many of my own clients are telling me their kids and grandkids are struggling to find work," Spiegelman says. "Whether it’s inflation, the broader economy, AI or some combination, this generation is having a genuinely hard time landing that first real job, and I’m seeing it push some parents to seriously reconsider their retirement timelines."

Should you delay retirement because your kids are struggling to find work?

AI might not be the only reason your 20-something children can't find work. But should you be altering your retirement plans because of it?

Spiegelman says that while it's natural to want to help your grown children, he thinks it's important to separate support from enabling.

"I have a client right now who’s buying a home for his adult child to live in rent-free — a full-time, able-bodied adult with only a part-time job. That’s a very different situation from a family giving a new grad six months to a year of breathing room while they find their footing," he says.

As Spiegelman explains, both are examples of support, but only one has an exit plan.

"Parents need to have that conversation with each other first, before their child even graduates, and agree on what their expectations are and where the line is," he says.

Steve Sexton, retirement planning expert at Sexton Advisory Group, agrees.

"It's natural for parents to want to help their children, especially when they’ve done everything right," he says. "But the biggest thing I would tell parents is support your adult children in a way that does not quietly derail your own retirement."

That's easier said than done when your child can't find a job and might be sitting on a pile of student loans. But like Spiegelman, Sexton feels parents should put a dollar amount and timeline around the help they'll provide.

Most important, Sexton says, parents should avoid tapping retirement accounts, pausing retirement contributions, or taking on new debt to support an adult child.

"Your child has time to recover financially. You may not. A 23-year-old can rebuild from a tough job market, but a 62-year-old who drains savings … may have a much harder time catching up," he says.

You're allowed to fulfill your own dreams

Ultimately, there are many such parents as Ward and Coleman who are in a position to help their kids without necessarily compromising their finances as much as their dreams. But that's also a problem, Spiegelman insists.

"People spend 20, 30, 40 years working and saving so they can retire in their sixties, and that window to actually enjoy retirement — travel, health, time — isn’t unlimited," he says. "Continually pushing that back to subsidize an adult child who could be working is usually not serving anyone well, including the child."

If parents feel they haven’t set their kids up with the right financial habits, Spiegelman says it’s not too late to have that conversation now.

"Start charging rent after a reasonable grace period, and scale support down deliberately rather than indefinitely," he says.

Spiegelman also recommends bringing in a financial adviser or CPA as the “bad guy.”

"It’s a lot easier for a parent to say, 'Our adviser says we can’t keep this up if we want to retire on schedule,' than to have that conversation alone," he says.

Some young adults are as fiscally responsible as can be, yet have fallen victim to circumstances. That's the situation Ward and Coleman are in. They're working to make their peace with a potential change of plans.

As Ward says, "We're fortunate enough to live on five acres in a great setting. It's a large house and a good place for grandkids."

He says, "I certainly do love having the kids around."

If he's ultimately forced to delay retirement, that's at least one consolation prize.

Read More

• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• I Retired at 63 to Enjoy My Free Time, But My Grown Kids Want Help With Childcare
• The Real Cost of Funding Adult Children: Postponing Retirement
• We Are 65 With $2.6 Million. One of Our Two Daughters Struggles Financially. Is It Fair if We Only Help Her?

A few families will open their aid offer and find it suddenly brighter. Others will discover a door that used to be open has quietly closed. The trick is knowing which side of the line you land on before you file, not after.

The friendlier part: Your business or farm may stop counting against you

For years, one of the FAFSA's sore spots was how it treated families who owned a small business or a farm. If you ran a modest company or lived on the land you farmed, that net worth could inflate what the government decided you could afford.

None of it was cash you could hand to a bursar, but the formula counted it anyway. Plenty of self-employed parents watched their aid shrink because of an asset they could not actually spend.

That changes for 2026-27. The Student Aid Index, the number that drives your whole aid package, no longer counts the net worth of:

• A family-owned business with 100 or fewer employees
• A farm the family lives on
• A family-owned commercial fishing operation

If you are a small business owner, a farmer or self-employed, the household that looked too wealthy on paper last year may look very different this year. The same income, the same family, a lower SAI, and potentially more aid. It is a rare FAFSA change that simply helps.

The stricter part: A hard ceiling on the Pell Grant

Now the other edge. For the first time, the FAFSA puts a hard ceiling on who can receive a Pell Grant. If your Student Aid Index comes in at or above twice the maximum Pell award, you get nothing.

The maximum Pell for 2026-27 is $7,395, which sets the cutoff at an SAI of $14,790. Land below it and you may qualify. Cross it by a single dollar and the grant disappears, with no partial award and no sliding scale above the line.

This is genuinely new. Under the old rules, a family near the edge might still scrape together a small Pell award. That cushion is gone. The line is bright and it is final.

A second change pulls in the same direction and gets less attention: If you claim the foreign earned income exclusion, that amount now gets added back to your income when the formula checks Pell eligibility. Families with income earned abroad will see a higher number than they are used to, and some will land on the wrong side of the cutoff because of it.

The families most exposed here are the ones who sit just above the threshold. A household a few thousand dollars over the line loses the entire grant, while a near-identical household just under it keeps it.

If you think you are anywhere near $14,790 on the SAI, it is worth knowing your number before you file rather than guessing. A Student Aid Index estimator and Pell eligibility guide can tell you which side of the line you are on while you still have room to plan around it.

The new gatekeeper: Identity checks built into the form

There is also a change in how you file, not just what you report. Starting April 26, 2026, every FAFSA runs through real-time identity fraud detection the moment it is submitted.

Most people will sail through and never notice. But applications flagged as high-risk trigger an extra step: A camera-based check of a government ID, done on a phone or tablet. The Education Department has already pulled roughly 300,000 of this year's forms for added verification.

None of this should scare anyone off. The same overhaul made the form shorter, with as few as 36 questions, and sped up identity checks for people who open a StudentAid.gov account with a Social Security number.

The practical takeaway is small and easy: Have a valid government ID within reach, file from a device with a camera if you can, and do not panic if you are asked to prove you are who you say you are. It is a speed bump, not a roadblock.

What to do before you file

A few moves make the difference between a pleasant surprise and an unpleasant one.

Run your SAI first. Your Student Aid Index decides almost everything downstream, including whether you clear or miss the Pell cutoff. Estimating it early turns the whole exercise from a guess into a plan. This FAFSA and SAI guide walks you through the process.

If you own a business or farm, do not assume last year's result. The asset rules changed in your favor. A family that did not qualify for much aid before should have another look under the new formula.

If you are near the Pell line, know the number. The cutoff for 2026-27 is an SAI of $14,790. Being just over it costs you the full grant, so it pays to understand what is driving your figure before you submit.

Be ready for the ID step. Keep a government ID handy and file from a phone or tablet with a camera in case you are flagged for verification.

The bigger picture

The 2026-27 FAFSA is easier to fill out and, for a meaningful number of families, more generous. It is also blunter than the version it replaced.

The business and farm break is real relief for households that always felt overcounted. The Pell ceiling is a hard stop that did not exist a year ago.

It is the same form for everyone, with two very different outcomes baked in, and which one you get turns on details most families never look at until the money is already on the line. This is the year to look early.

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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.

Dear Wealth Wise: If I have a fully funded Roth account, is there any advantage to adding a college 529 plan for my grandkids' college? I believe paying for college from a Roth account is just as good or better than paying for college from a 529 plan. A 529 plan is essentially the same as a Roth, but with different rules for how the tax-free money can be used. Is this correct? — Confused Grandparent

Dear Confused: The average cost of college today is $38,270 per year, including books, supplies and living expenses, according to the Education Data Initiative. If you're retired and are in a position to help your grandchildren cover the cost of college, it's natural to want to pitch in. But it's important to do so as efficiently as possible.

Here, a grandparent with a robust Roth IRA wants to know if there's any point to funding a 529 plan for their grandkids. As they correctly point out, 529 plans and Roth IRAs have similarities. Both accounts are funded with after-tax dollars, but gains and withdrawals are tax-free provided plan rules are followed.

In the case of a Roth IRA, gains and withdrawals are fully tax-free, provided you're at least 59½ and your account meets the five-year rule. For a 529 plan, gains and withdrawals are tax-free provided your money is being used to pay for qualified education expenses.

But that doesn't mean you should just flip a coin to choose the right home for your grandkids' college savings. It's important to understand the nuances of funding an education through a Roth IRA versus a 529 plan.

Roth IRAs and 529s are different beasts

While you can technically choose either a Roth IRA or 529 plan to save for a grandchild's college, Julian B. Morris, founder and principal at Concierge Wealth Management, says, "For affluent families, I don't view a Roth IRA and a 529 plan as interchangeable tools."

Morris calls a Roth IRA "one of the most valuable pieces of financial real estate that a high-income family can own." He points out that Roth assets are usually tricky for higher earners to accumulate. That's why he generally views Roth assets as retirement assets first and education assets last.

"Every dollar withdrawn from a Roth IRA for college is a dollar that loses the opportunity for decades of future tax-free compounding for retirement," he explains.

For example, imagine you're 65 and tap your Roth IRA to help cover your grandchild's tuition. If you live to age 90, you could miss out on a huge amount of tax-free gains.

On the other hand, as Morris explains, "529 plans are specifically designed for education, funding, and offer several advantages. Grandparents can move assets out of their taxable estate while retaining control over the asset, and a large contribution can be frontloaded to maximize long-term compounding for future generations."

The 529 "superfunding" rule Morris alludes to allows an individual grandparent to bundle five years of gifts into a single lump sum of up to $95,000 (or $190,000 for a married couple). This step instantly removes that chunk from their taxable estate, allowing it to compound tax-free for future generations.

The 529 financial aid trap (mostly) no longer applies

It used to be that grandparent-owned 529 plans had to be disclosed as assets on the FAFSA. An update to that rule makes a 529 plan a far more attractive option.

While parent-owned 529 plans can reduce aid by up to 5.64% of the account’s value and student-owned plans can reduce aid eligibility by 20% of the account’s value, a grandparent- or relative-owned 529 plan should not affect need-based federal financial aid at all. This strategy is known as the grandparent 529 loophole.

That said, roughly 200 private colleges (mostly highly selective colleges) use the CSS Profile, an additional financial aid form. CSS Profile requires students to disclose grandparent-owned 529s.

Another thing to keep in mind about 529 plans is that several states offer tax incentives for contributions. Those incentives are often available to anyone who funds a 529, even if that person is a grandparent. In many cases, though, you can only reap those tax benefits if you contribute to your home state's plan.

You can roll unused 529 funds into a Roth IRA

Morris also points out that recent rule changes have made 529 plans even more attractive.

"Unused 529 assets may be eligible for rollover into a Roth IRA for the beneficiaries. The ability to convert unused education dollars into future retirement dollars has significantly reduced the fear of overfunding a 529 plan and has greatly increased its use for life after college."

As Jaine Coann Barton, Wealth Management Advisor at TIAA, explains, "If you end up with more money in the 529 than your grandchild needs, current rules allow you to roll over up to $35,000 of those excess funds into a Roth IRA in your grandchild’s name."

Just keep in mind the rules for rolling excess 529 funds into a Roth IRA. For example, the account must have been open for at least 15 years before the transfer. Moreover, your grandchild must have earned income for the year that is at least equal to the amount of the transfer.

For these reasons, Morris typically recommends using a Roth IRA as a retirement nest egg and using a 529 plan if the intent is to fund an education.

Separating personal savings from college savings is often best

Ultimately, your best move will be to open a 529 plan for your grandchild. You never know when you might face expensive home repairs, need a new vehicle, or require long-term care. Allocating funds to a 529 plan allows for that separation. You can help fund your grandkids' education without having to worry about dipping into reserves you might eventually need yourself.

Along these lines, if you stick with a Roth IRA, you might contribute less toward your grandchildren's education than what you can afford if you're worried there won't be enough money left for your own needs.

Does the flexibility of a Roth IRA outweigh the benefits of a 529?

Despite positive changes to 529 plan rules, one expert offered a contrarian view: A Roth IRA might ultimately be your most flexible option for funding a grandchild's education.

As Coann Barton points out, "It can be difficult to predict what your grandchildren's educational path will look like. Will they attend a two-year community college or a four-year private university? Will advances in artificial intelligence reshape the cost of or need for a traditional college education? A Roth IRA allows you to adapt to whatever the future holds without being locked into a specific purpose."

You can't predict your grandchild's college plans or the future of college altogether, but the addition of an IRA rollover of up to $35,000 does offset some of Barton's concerns.

A word from Wealth Wise — 529 plans are almost always best

Overall, a 529 plan beats a Roth IRA by most criteria. It can help your grandchild while also aiding your tax planning. With a 529 plan, you can shield large sums all at once through superfunding, building a hefty college fund and potentially earning you a state tax credit or deduction.

Roth IRAs, on the other hand, allow only small annual contributions ($7,500 to $8,600 for 2026). Those contributions are probably better reserved for retirement. Since you're already retired, you can't make new contributions to a Roth IRA, anyway.

Ultimately, you're doing a wonderful thing — helping grandchildren you care about get a degree while minimizing their student debt burden.

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

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That means you must plan differently.

Instead of planning around what you'll earn, plan around what you can count on, and put structure between the months that overdeliver and the ones that come up short.

Understanding your income streams

Most people with variable income have five or six moving pieces interacting at once, all with different pay cycles.

A sales month can look fantastic on paper while cash flow is still tight because commissions haven't cleared yet.

One delayed payment can throw off an entire month if your system is too tight.

How do you analyze your income quarterly to spot trends and seasonal patterns?

• Know when your busy and slow periods usually hit, so you can time major expenses and savings properly.
• Don't mentally spend money before it arrives or assume one strong quarter is your new normal.
• Track invoices, payment dates and which clients consistently pay late.

Tracking these helps understand when to take time off and make large purchases.

How to set financial goals

Instead of vague goals, attach percentages or fixed actions to incoming money:

• Move 10% of every payment into retirement
• Send 25% to taxes immediately
• Route part of each commission into emergency savings before touching the rest
• Near-term goals usually matter first:
• Quarterly taxes
• Emergency savings
• Eliminating high-interest debt
• Covering periods in which you can't work
• Building buffers for healthcare or time off

Jeff Zhou, CEO and founder of Fig Loans, works in consumer lending, where income volatility directly affects repayment behavior and financial stability. "The people who manage variable income best usually are not obsessing over perfect budgeting," he says. "They build small automatic rules that keep working even when income changes.

"Moving part of every deposit into taxes, savings or debt immediately creates stability before spending decisions have a chance to take over."

How to create a budget tailored to variable income

The key is budgeting based on your lowest typical monthly income rather than your average.

That lowest typical month number becomes the foundation for almost everything:

• Housing
• Utilities
• Insurance
• Food
• Transportation
• Minimum debt payments
• Baseline business expenses

If those essentials fit inside your floor month, the pressure drops dramatically.

Automatically transfer percentages of each check into different accounts, so you're saving the same, regardless of how much you earn that month.

Variable earners usually can't afford an aggressive lifestyle inflation because the income ceiling changes faster than the bills do. Even for salaried individuals, lifestyle inflation is hardly a good thing.

A flexible budget works better:

• Lean months prioritize essentials.
• Strong months strengthen reserves.
• The percentages flex.
• The system stays intact.

The structure matters more than keeping the same ratios every month.

Managing debt and expenses

A manageable payment during a strong month can feel oppressive three weeks later if work slows down unexpectedly.

During lean periods, the priority is usually stability:

• Make minimum payments
• Protect your credit
• Avoid missed payments
• Keep cash flow intact

Strong months are when you attack balances aggressively.

High-interest debt matters most because it keeps punishing you during weak income periods. The debt avalanche method generally saves the most on interest over time.

Expense audits matter for self-employed workers whose business tools and subscriptions multiply over time.

Review recurring expenses regularly. Separate personal and business spending clearly.

Otherwise, it becomes difficult to see which costs are helping you earn more and which ones are just friction.

Tax planning and preparation

Set aside 25% to 30% of each payment for taxes immediately upon receipt to create a buffer.

Open a dedicated tax savings account, and treat those deposits as non-negotiable. This simple habit prevents the stress of scrambling to pay quarterly estimates or year-end tax bills.

Once tax money mixes into your operating cash, it becomes psychologically easy to treat it like available income.

A few practical anchors help:

• Understand estimated tax deadlines through the IRS
• Learn self-employment tax obligations for Social Security and Medicare
• Keep clean records year-round
• Track deductions consistently instead of rebuilding everything during tax season

The people who handle variable income best are the people who separate obligations before the money ever feels spendable.

Investing with irregular earnings

Variable earners usually do better with flexible investing systems instead of fixed contribution expectations.

Percentage-based contributions work well because they scale naturally with income.

During strong periods, contributions rise automatically. During slower stretches, you reduce contributions without abandoning the habit entirely.

Someone with unpredictable earnings often needs more accessible cash than a salaried worker because dry spells happen.

Selling investments at the wrong time to cover basic expenses creates a different problem entirely.Marcus Reid, financial manager at Searqle, works with teams managing operational budgets across fluctuating revenue cycles.

"Variable income stops feeling chaotic once you stop trying to predict it and start building around the floor instead of the ceiling," he says. "The system has to work in your worst month, not your best one. Everything else is just upside."

Adjust as you go

A variable-income financial plan is never static because the income itself is not static.

When complexity grows, bringing in a fiduciary financial planner or tax specialist early is usually cheaper than cleaning up avoidable mistakes later.

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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 took the call, from "Rachel," who first wanted assurance that our conversation would be confidential. After I assured her it would be, she told me that she was calling about employees on the news teams of local TV stations owned by giant corporations "being forced to continue working when they want to quit.

"Viewers have no idea of this abuse, and depending on where you live and which local television stations you watch, often the nice young people — typically in their first job in TV news right after graduation — realize it isn't for them and don't want to be there, but they are, practically speaking, forced to continue working or suffer thousands of dollars in penalties.

"One of my former students is going through a serious depression as we speak, mugged financially by management at a television station she wants to leave. "Mr. Beaver, your column is popular in university mass communication departments, and you can do so many young people a great service by writing about this abuse."

So, how can this happen in today's America? Two things: Supply-and-demand and a corporate management philosophy among some broadcasters that views their employees as disposable.

It's not all glamor

If you live in almost any U.S. city with a population of less than 500,000 and watch local television, no doubt you've seen a revolving door of new "talent" delivering the news.

Every few months, new faces appear — some are absolute standouts — only to vanish, sometimes within months, for greener pastures. Often, viewers see people who just do not belong on the air. So, why have they been hired?

"There is a very good reason," Rachel explained. "There is an absolute glut of students majoring in broadcast journalism. When we ask our students why they chose this field, the most common answer comes down to their perception of television news as 'glamorous.'

"In reality, a broadcast newsroom is often one of the most toxic places in journalism, and sadly, it isn't until the graduates land jobs that the truth hits some of them.

"There is, in addition, a perception that these people we see on our local news are extremely well paid. So many students see young people like themselves on the news wearing what appears to be expensive clothing and do not realize this is fantasy."

TV reporters qualifying for food subsidies

How much would you figure is reasonable pay for a new graduate in a local television news department in cities with population of less than 500,000?

"First-job reporters in small markets are paid from $12 to $16 an hour, and many across the country (receive SNAP benefits). The low pay and exploitation in television news would shock viewers if they knew," Rachel said.

"This is a shrinking industry," she added, "with massive consolidation, layoffs and contractual traps. Sixty-five percent to 75% of broadcast graduates never enter TV news, and among the 25% to 35% who do, about 50% to 60% leave within two to three years.

"Only about 10% to 15% of broadcast journalism majors stay in TV news long term."

Reimbursement is required

Rachel sent me several employment contracts that her students have signed with a number of broadcasters. Most of them had this type of a clause:

If you quit before the expiration of your contract, we have the right to recover from you up to one half of your last six months compensation to reimburse us for publicizing you as a team member, training, clothing allowance and much more.

It isn't rocket science. From what I have seen, the repayment amounts are not tied to actual costs or a justifiable estimate of damages, and the intent appears to be to punish the employee for quitting, plain and simple.

Many of these provisions are unconscionable.

States have differing laws in the area

In California, it is illegal to require repayment of wages, and virtually none of this is legal, but that is not the case in several other states where employer rights dominate.

The effect of this language is clear: It restricts employee mobility and violates public policy in some jurisdictions.

As far back as 1911, in Bailey v. Alabama, the Supreme Court struck down a law that criminalized quitting after receiving an advance, holding that, "You cannot force someone to work or punish them for quitting in a way that effectively forces them to stay."

The court said this created a system of involuntary servitude, which, as we all know, was outlawed with slavery in 1865 when the 13th Amendment to the U.S. Constitution was ratified.

My recommendation

When offered a job and handed an employment contract, any broadcast journalism graduate — or anyone — needs to schedule a consultation with a labor and employment attorney who represents employees.

Don't just sign the contract!

Often, employers will include language in employment contracts that they know is not enforceable, hoping that, out of an applicant's desperation to get a job, they will sign anything.

For several years, I was an "action reporter" in local television and enjoyed the experience, but I know too many people who grew tired of being nomads, going from city to city every two to three years, station to station, discovering it wasn't what they'd ever expected. They opted for a more normal life with family, kids, a promise of tomorrow and a real home.

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.

But summer can also be an ideal time to step back and reassess how you're funding your family's education, before fall tuition bills, enrollment decisions and financial aid deadlines arrive.

For many households, that means taking a fresh look at 529 plans — accounts that have quietly become far more flexible and valuable than many parents realize.

For years, 529 plans were viewed primarily as college savings vehicles. Parents or grandparents contributed over time, invested the funds and planned for the balance to cover future tuition expenses.

That function is still at the core of many 529 strategies, but recent legislative changes have significantly expanded how these accounts can be used.

The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, expanded how families can use 529 assets. Beginning in 2026, another important change took effect: The annual federal limit for qualified K-12 expenses increased from $10,000 to $20,000 per beneficiary.

That is a meaningful shift for families with children in private school, students who need tutoring or academic support or households thinking more broadly about how education planning fits into their long-term financial plan.

529 plans are no longer just about college tuition

One of the biggest misconceptions surrounding 529 plans is that they can only be used for college tuition.

Under the expanded rules, 529 funds can now be used for a broader range of K-12 education expenses, including tuition, curriculum materials, books, instructional supplies, tutoring, standardized testing fees, dual-enrollment costs and certain educational therapies for students with disabilities.

That flexibility can be especially relevant during the summer. This is often when families are reviewing report cards, evaluating tutoring needs and planning enrichment programs.

However, families should understand that not every education-related expense will qualify, and state tax treatment can vary. Before taking distributions, investors should review their state's rules and may benefit from consulting a tax adviser. But the broader message is clear: 529 plans have evolved into more versatile education funding tools.

Why families should rethink 'overfunding' concerns

Historically, many families were cautious about contributing too aggressively to 529 plans because they feared ending up with excess balances if a child received scholarships, attended a less expensive school or chose not to attend college altogether.

Those concerns have not disappeared, but they have become less restrictive in recent years.

One reason is the expanded list of qualified education expenses. Another is the ability to roll unused 529 assets into a Roth IRA for the beneficiary if certain requirements are met. Current rules allow up to $35,000 to be rolled into a Roth IRA over time, provided the 529 account has generally been open for at least 15 years and other contribution rules were satisfied.

The planning implications are significant. In some cases, a 529 plan can now support a child not only through school, but potentially into early adulthood and saving for retirement as well.

That shift is changing the tone of conversations many advisers are having with families. In the past, clients often aimed to fund only a portion of expected education costs because they worried about excess balances. Today, for families with the cash flow and balance sheets to support it, we are discussing whether it makes sense to fund more aggressively.

Unused dollars may support another family member, help with qualified education expenses earlier than college or, in some cases, begin building a Roth IRA foundation for the child.

In that sense, the 529 has evolved from a narrowly focused college account into more of a long-term family planning tool.

Start earlier than you think — and review your state plan

If there is one consistent takeaway for young families, it is to start early.

The value of a 529 plan comes largely from tax-advantaged growth over time. The longer the money is invested, the more valuable that potential growth can become. Starting early may also matter for families who eventually want to preserve the option of a Roth IRA rollover, since the account-age requirement is generally 15 years.

Families should also periodically review which state plan they are using. Many investors default to their home state's 529 plan, and that often makes sense if the state offers an income tax deduction or credit.

However, many families do not realize they are not always limited to their own state's plan.

Some states, including Pennsylvania, for example, allow residents to receive a tax deduction even when investing through another state's 529 plan. Other states, including Georgia, require residents to use the in-state plan to receive the tax benefit.

That distinction matters because 529 plans can vary significantly in fees, investment options and usability. Certain plans, such as Utah's my529 program, are viewed favorably by advisers because of their low costs and broad investment selection.

For some families, it may even make sense to split contributions between multiple state plans — using one to maximize state tax benefits while directing additional savings to another plan with stronger investment features.

Do not ignore FAFSA or scholarship applications

Summer is also a good time to revisit financial aid planning. The federal FAFSA deadline for the 2025-2026 academic year is June 30, 2026, and families should pay close attention to school and state deadlines, which may come earlier.

Even families who assume they will not qualify for need-based aid should not automatically skip the FAFSA. Some merit scholarships, institutional aid programs or other opportunities may require it.

Scholarships also create additional 529 planning opportunities. If a student receives a scholarship, families may generally withdraw up to the scholarship amount from a 529 without paying the usual 10% penalty on earnings, although income tax may still apply to the earnings portion.

As summer begins, families may want to take time to review whether their current 529 strategy still reflects how these accounts can now be used. Between expanded K-12 flexibility, Roth IRA rollover opportunities and evolving state-plan considerations, many households may have more planning options than they realize.

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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.

Who qualifies for the maximum benefit? Jack Lobel, press secretary of the New York City Council, told Kiplinger, "Any participant who is already eligible for Human Resources Administration (HRA) benefits receives an additional $2,000 on top of the $1,000." The HRA is NYC's social service agency serving families by providing food, housing, child support and other services.

The measure would have to be approved by Mayor Zohran Mamdani, who excluded the proposal from his executive budget in May, per the New York Times, although budget negotiations are ongoing. He has expressed interest in expanding contributions into children's savings accounts.

The NYC proposal is one of the latest government initiatives designed to jumpstart college savings. These programs, which offer free funding, represent the most pertinent news for families seeking college relief. Here's a look at other government-backed funds you may qualify for.

Which states offer college aid for families?

Here's a look at states providing some incentives to help you save for college:

• California: Through the CalKIDS program, children can earn scholarships of up to $1,500 if enrolled in low-income public schools.
• Connecticut: The Baby Bond program helps parents by providing up to $3,200 for low-income families with children to attend college, buy a home or start a business.
• Pennsylvania: Thanks to the Keystone Scholars initiative, every child born in the state receives $100 into a PA 529 education savings account.

Along with these, other states offering incentives include Texas, Indiana, Maine, Nebraska, Rhode Island and Nevada. If you live in one of these states, check out their programs and what you would need to do to qualify.

Meanwhile, there's a new national program about to roll out that benefits all qualified families.

Trump Accounts are bringing the concept nationwide

As part of the One Big Beautiful Bill Act of 2025, the federal government will open tax-advantaged college savings accounts for U.S. citizens born between January 1, 2025, and December 31, 2028. These accounts feature a $1,000 contribution to help jumpstart your college savings.

From here, families can make annual contributions of up to $5,000 into U.S. equity funds — think the S&P 500. Employers can also make contributions, but they're capped at $2,500 annually.

You can open one by filling out Form 4547. Next, download the Trump Accounts app on the Apple App Store or Google Play. This allows you to monitor the account and make additional deposits. Once registered, you'll wait for an invite. These will come out in a few weeks as the Trump Accounts officially launch on July 4.

With this in mind, there are a few limitations to using these accounts. One, you won't be able to make any more contributions after your child reaches 18. Withdrawals are also not tax-free like they would be with 529 plans, and you have a narrower window of investment options. Still, even with the limitations, having $1,000 is a great start for families that need a boost with college savings.

In addition to using these programs, there are other options you can fund yourself that help you reach your savings goals, so you minimize how much debt you or your child needs to take on.

How do child savings accounts work, and what are my options?

While those are programs and proposals where the government funds savings, there are many options for savings or investment vehicles funded by yourself, designed to help parents (or grandparents) save for higher educational expenses. Some programs also allow children to use the money to open a business or to make a down payment on a home.

Plans, such as 529 and Roth IRA, also offer tax savings advantages as long as you use the earnings for college expenses. Here's a breakdown of some of the most popular options:

529 plans

This is a tax-advantaged investment account, where you invest after-tax earnings in ETFs, mutual funds or age-based portfolios. The benefit of this approach is that earnings grow tax-deferred, and as long as you withdraw funds for educational expenses, you won't pay federal tax on them.

This is the best option as you receive federal tax breaks (many states offer them too), and your child can use this money for trade schools, graduate programs and some college expenses overseas. Single filers can contribute up to $19,000, while married filing jointly couples can contribute up to $38,000 annually. You can do more in either instance, but it will go against your lifetime gift and estate tax exclusion.

Read more: 529 Plans: Everything You Need to Know

Roth IRA

While this is primarily a vehicle for retirement savings, you can also use it wisely to fund your child's education. Withdraw your contributions tax-free and your earnings tax-free, provided they're used for higher education expenses. The only thing to consider is that annual contributions are capped at $7,500. Meanwhile, with 529 plans, you don't have annual limits.

Read more: Why Every Grandparent Should Consider a Custodial Roth IRA Now + Where to Save Your Kids' Cash

Coverdell Education Savings Account

These accounts work similarly to Roth IRAs in that you contribute post-tax money into self-directed investments like bonds, stocks and more. Unlike Roth IRAs, Coverdell caps maximum annual deposits at $2,000.

There are also income restrictions with these accounts. Single filers have to earn less than $95,000 to $110,000 or more, whereas if you're married filing jointly, you won't qualify if you earn between $190,000 to $220,000 or more.

There's also a new college savings program that all qualified parents should use.

Read more: Coverdell ESAs vs 529 Plans: Which Should You Choose?

What's the best way to save for my child's college education?

I recommended a blended approach. Definitely open a Trump Account if you qualify because it's a free $1,000. Even if that doesn't become your main account for saving for college, over time, that money can grow, giving your child more funds to use when the time arrives.

I also suggest a 529 plan. They're among the best savings vehicles for college due to their flexible investment choices and tax savings. To determine long-term goals and monthly savings targets, consult with your spouse, a trusted friend or a financial advisor, who can guide you on specific savings measurables. And don't forget to take advantage of any local programs, as they can make saving for college more within reach.

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As the Class of 2026 are handed their diplomas this spring, the outlook is bleak. They're facing not only one of the worst job markets in years, but also — and perhaps more devastatingly — the realization that the promise of higher education they've been sold their entire lives was a lie.

It's a broken promise for graduates, but also for the rest of us. The college-first mindset is ruining the job prospects of our young people and wrecking the economy.

It's time for America to grapple with what its college-first mindset has wrought. And it isn't pretty.

What went wrong?

For years, America sold young people a simple promise: Work hard, go to college, get a degree, and opportunity will follow.

That promise was rooted in something real. College opened doors for millions of people, building careers, widening horizons and helping families gain social mobility. But over time, what was a good path for some became something more rigid.

The four-year degree stopped being one strong option among several and became, for many parents, educators and policymakers, the only fully respectable route to success.

That belief shaped more than culture. It shaped how we spend money, how schools advise students and how the country defines ambition. Now the labor market is exposing how narrow that view has become.

Many young college graduates are finding that the old path into white-collar life no longer works the way it once did.

Just 30% of last year's college graduates were able to find positions in their chosen field, as entry-level jobs continue to be wiped out, and a tenuous economy pushes employers to do more with fewer people.

Growing shortage of skilled workers

College still has value, of course. For many professions, it remains an essential stepping stone. But the larger assumption that a bachelor's degree is the safest default path for nearly everyone now looks less like wisdom and more like habit.

While college graduates are struggling, the U.S. is in desperate need of the skilled, well-paid workers who have been seriously undervalued in our public imagination.

Contractors need electricians, plumbers, welders and HVAC technicians; manufacturers need machinists, maintenance specialists and advanced technicians; healthcare systems, logistics networks, public infrastructure and public safety all depend on people with real skills that do not fit neatly inside the old, four-year college ladder.

These jobs are not fallback options; they are central to the functioning of modern life — and the AI revolution is only making these jobs all the more valuable. The explosive growth of data centers, which require their own fleet of skilled laborers, from construction to plumbing, has increased the demand for certain positions by over 100%.

And they're well-paying jobs, making anywhere from $80,000 to $250,000.

According to a study by the Bipartisan Policy Center, the U.S. is projected to face a shortage of 6 million workers by 2032, even as 70% of jobs will require education or training beyond high school. In construction alone, there are nearly two job openings for every unemployed worker.

Compare that with the unemployment rate for recent college graduates, which is a point and a half higher than the national average.

Yet, across the American education system, college is still spoken about as if it were the only honorable route into adulthood. High schools speak fluently about college preparedness while treating readiness for anything else as a lesser goal. Parents and public policy reflect the same bias.

The path towards traditional degrees is heavily subsidized, while many shorter, job-connected routes remain thin, scattered or culturally discounted. Meanwhile, the success of the four-year path is far from guaranteed; nationally, only about 60% of students complete a bachelor's degree within six years.

Students are being disenfranchised, while the talent shortage for employers only continues to grow.

How to break out of the college-first mindset

Across every level of education and policy, the U.S. needs to extricate itself from this college-first mindset. A healthy society does not organize opportunity around a single script. It builds multiple credible paths to economic security, adult dignity and useful contribution.

A quality education at a top-level university is right for some, yes, but for many others, the path to success looks like an excellent apprenticeship program, a modern community college pathway, employer-led training, or short-term credentials that are tied to real labor market demand.

These aren't side doors for those who couldn't rough it; they're part of a national talent strategy that more closely links the education system with private industry. On a state level, it means partnering with business groups to shape curriculum and state licensing requirements.

On a federal level, it means rethinking how — and what programs — we subsidize.

The Education Department's proposed Workforce Pell rule changes are a start. Updated rules would allow students to use Pell Grants for eligible short-term workforce programs beginning in July 2026, including programs as short as eight weeks.

It's a critical first step, but one that must continue to grow: one new funding stream will not fix a system that remains fragmented, uneven and culturally biased toward one route over the rest.

America does not need to turn against college. It needs to stop acting as if college is the only serious path for serious people. That idea has distorted our education system for years. Now it is starting to fail the people it was supposed to serve.

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

For many well‑intentioned parents, saving for college through a 529 plan feels like doing everything right. Contributions grow tax‑free, withdrawals can be tax‑free when used properly, and the account is designed specifically for education.

Yet when college finally arrives, some families discover that the balance falls short of the full cost. Rising tuition, housing expenses and education inflation have turned college planning into a moving target, even for disciplined savers.

The good news is that a 529 plan can still play a meaningful role, even when it does not fully fund four years of school. The key is how the money is used, when it is distributed and how it coordinates with other resources.

Thoughtful strategies can help parents maximize tax benefits, avoid costly mistakes and stretch limited savings further.

Qualified expenses

The primary advantage of a 529 plan is tax‑free withdrawals, but only when distributions are used for qualified education expenses.

At the college level, these expenses include tuition, mandatory fees, books, required supplies, computers, internet access and room and board for students enrolled at least half‑time.

Room and board is subject to limits based on the school's published cost of attendance, especially for students living off campus.

When funds are limited, it is often best to reserve 529 dollars for clearly qualified expenses such as tuition and required fees. These expenses are straightforward to document and provide the strongest tax benefit.

Using 529 money for non‑qualified costs can trigger income tax and penalties on the earnings portion of the withdrawal, reducing the effectiveness of the account.

Timing

One of the most common 529 mistakes involves the timing of the distributions. Distributions must occur in the same tax year that qualified expenses are paid. Paying tuition in January while taking a distribution in December, or the reverse, can unintentionally result in a taxable withdrawal.

Academic calendars can complicate this further. Spring semester tuition bills are often issued in December for a semester that begins in January. Families should coordinate payments and withdrawals so that both occur within the same calendar year. This helps ensure consistency between Form 1098‑T from the school and Form 1099‑Q from the 529 plan administrator.

Careful recordkeeping is essential. Retaining tuition statements, housing invoices and receipts provides clarity at tax time and helps support the tax‑free nature of the withdrawal if questions ever arise.

Other timing considerations

When a 529 balance will not cover all costs, it is rarely optimal to spend it all in the freshman year. College expenses often increase over time, and families may benefit from spreading withdrawals over all four years.

Some parents intentionally preserve 529 funds for later years, when scholarships may decrease or housing costs rise. Others use the account primarily for room and board once grants and discounts reduce tuition expenses.

There is no single correct approach, but the guiding principle is to avoid exhausting the account too early unless there is a clear tax or cash‑flow reason to do so.

Let the 529 complement other funding sources

When college costs exceed 529 savings, the account should be viewed as one part of a broader funding strategy. Most families rely on a combination of current income, savings, financial aid, scholarships and loans.

In many cases, limited student borrowing, particularly through federal student loans, can be a reasonable choice when it allows the 529 to be used efficiently and helps parents preserve retirement assets. Paying some expenses from cash flow can also allow remaining 529 funds to continue growing tax‑free for future years.

Parents should be cautious about draining their retirement accounts or sacrificing long‑term financial security in order to fully fund college. Education is important, but it should not come at the expense of financial stability later in life.

Be mindful of financial aid considerations

Parent‑owned 529 plans are treated relatively favorably in the financial aid process and are generally assessed as parental assets. However, distributions can affect aid eligibility depending on account ownership and timing.

While recent Free Application for Federal Student Aid (FAFSA) changes have reduced penalties related to certain distributions, families should still coordinate withdrawals thoughtfully, especially when 529 accounts are owned by grandparents or other relatives.

Understanding how distributions may interact with financial aid calculations helps avoid unintended reductions in eligibility.

Take advantage of expanded flexibility

529 plans are more flexible than many families realize. In addition to traditional college expenses, funds can be used for certain vocational programs, apprenticeships, certification costs and limited student loan repayment.

If a balance remains after undergraduate education, the account does not need to be hurriedly spent. Funds can be used for graduate school, reassigned to another family member or potentially rolled to a Roth IRA for the beneficiary under current rules and limitations. This flexibility reduces pressure to over‑distribute funds during the college years.

A failure? No way!

An underfunded 529 plan is not a failure. When used thoughtfully, it can still significantly reduce the cost of higher education. The value comes from strategic timing, careful coordination with tax credits and intentional use of qualified expenses.

Families who approach 529 distributions with a plan, rather than reacting to tuition bills, often find that their savings go further than expected. Viewing the 529 as part of a broader financial strategy allows parents to support education goals while still protecting their long‑term financial health.

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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 you work in an intense field like medicine, your job might eventually take a toll on your mental health. In 2025, 49.8% of emergency medical practitioners reported at least one symptom of burnout, according to the American Medical Association. And persistent burnout could set the stage for an early retirement, which may be good for your outlook but less good for your finances.

There may, however, be a better way — a sabbatical.

If you tuned into the Emmy-winning medical drama The Pitt last season, you know that the storyline revolved around Dr. Michael "Robby" Robinavitch's planned sabbatical. Robby, the show's main character, had planned a three-month motorcycle trip to escape the grind and trauma of the emergency department, where he works as an attending physician.

Of course, as viewers, we don't actually get to see Robby embark on his epic escape. But he may have the right idea.

If you're in a high-pressure job, whether it's medicine, finance, law, or something else, you may reach a point when you feel the need to call it quits professionally. But it pays to explore a sabbatical as a potential alternative to early retirement before you bring your career to a permanent close.

Sometimes, you need a serious reset

Part of the reason so many people in high-pressure jobs succumb to burnout is that they don't allow themselves opportunities to reset. A sabbatical could make that possible.

Michelle Seijas, Ed.D. is an executive and leadership coach who understands the importance of getting that reset.

"I took a six-month sabbatical in 2017 after burning out as a high school principal," she says. "I aspired to be a superintendent and realized that continuing on that path was not sustainable. My sabbatical allowed me to rest, reflect, and re-emerge with a new plan for my life and career."

As Seijas explains, a sabbatical isn't just a break.

"It's a reset of your nervous system," she says. "The leaders I work with aren't just tired. They've lost the thread between who they are and what they do every day. Time away, when used intentionally, gives them the space to rediscover that thread before they make an irreversible decision."

Lisa Chen, LMFT and founder of Lisa Chen & Associates Therapy, says, "A sabbatical is something I highly recommend for burned-out professionals who are psychologically depleted. This time off allows their nervous systems to move out of fight or flight mode into a place where they can reconnect with themselves."

A major misconception about burnout, Chen explains, is that people just need a vacation and everything will be fine.

"I see burnout as functioning in a prolonged state of nervous system overdrive, so a weekend off won't be enough to repair someone who's experiencing burnout," she explains.

Chen has seen her share of professionals contemplate early retirement due to burnout and stress. In those situations, she'll often try to steer them toward an extended break when appropriate.

"I'd much rather see my clients be intentional about their retirement, not to leave their profession out of impulse," she says.

Making plans for your sabbatical

Some people use sabbaticals to travel. Others use them to pursue creative projects or obtain licenses or credentials for a career shift.

Chen says it's a good idea to think about how to maximize a sabbatical before it begins. But, she says, you don't necessarily have to fixate on a single accomplishment or goal.

"I highly recommend those who are suffering from burnout to make their sabbaticals restorative and intentional," Chen explains. "It's not about what they accomplish during their time off… Time off is more about rest, introspection with or without therapy, learning how to regulate their nervous system, and reconnecting with meaning outside of work."

Consider it a retirement trial run you can learn from

Your burnout may be pushing you toward retirement. But Aaron Ulrich, Owner at Integra Financial Planning, LLC, says a sabbatical is a great way to find out whether you're truly emotionally ready.

"In financial planning conversations, I'll often ask clients, 'How do you feel at the end of a vacation?'" Ulrich says. "If you're the type of person who starts packing Thursday night for a vacation that ends Saturday because you need to get back to your routine, then we need to talk about what retirement is going to look like for you. Not from a financial view, but from an emotional one."

In Ulrich's mind, a sabbatical gives you an opportunity to see what life is like without a job as an anchor. It's insight that a vacation alone won't give you.

"You're not just planning a trip and the big, exciting parts of time away from your career," he says. "You're planning how you're going to satiate your mind and spirit with a new lifestyle that fulfills you. If you can't create that during a sabbatical, then the permanent sabbatical known as retirement may be a challenge."

Make sure you're prepared financially

While a sabbatical could serve as the reset you need to make the most of your final stretch in the workforce, it's important to make sure you can swing that time off financially.

"Planning for hobbies and travel is obvious, and easy to put a price tag on," Ulrich says. "Planning for the gaps between those things can be much more challenging."

To that end, it's important to map out your expenses for your sabbatical. That includes potentially having to pay more for health insurance. It also means you may need to pause contributions to retirement savings, so you'll need to see how that affects your long-term financial plan.

Didi Chen, CFP, CFA, financial planner, and founder at Everleap Financial Planning, worked in finance and tech for over 10 years before walking away from a six-figure career in 2024 for a planned sabbatical. And she says there are specific steps you can take to protect yourself financially while you're away from work.

"In many states, mental health conditions qualify for paid medical leave, which means your job stays protected and RSUs keep vesting. Talk to a doctor and plan this out," she says.

Those looking to pause corporate careers have distinct financial levers to pull. For those workers, Chen also recommends timing your temporary exit around your RSU vesting schedule, especially if you don't plan to return to your current job. Waiting a few months, for example, could help you kick off your sabbatical in a stronger place financially.

Finally, she says, not earning a paycheck for a while could set the stage for other savvy financial moves.

"Your sabbatical year is your best tax-planning window," Chen says. "A Roth conversion and tax gain harvesting at 0% capital gains are simply off the table at [higher incomes]."

All told, you don't want to spend your sabbatical stressing out about money if the point is to regroup mentally and figure out your next steps. With the right planning, you can spend that time focusing on you instead of worrying about paying the bills and how your time away will impact your financial goals.

Read More

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George Bernard Shaw is credited with saying that if all economists were laid end to end, they wouldn't reach a conclusion. And President Truman said, "Give me a one-handed economist. All my economists say 'on the one hand…' then 'but on the other hand.'"

If you read the business news, it often seems that Shaw and Truman were right. Some economists seem to always favor one viewpoint, while others favor another. Often, it seems that their opinions line up with their politics.

And yet, there are many areas where there is common thought among economists. One way to find them is to read basic economics textbooks. When professors write these books for students, they want to cover the basic principles that are needed to understand the field.

While there are many areas of agreement, these are the six that I think are most important.

1. Incentives matter

When it comes to incentives, what can we do to encourage people to take one action over another? How can we attract people to one career over another?

Most of us know it takes years of study and high tuition to become a doctor, lawyer or engineer. But people who go into these fields can look forward to financial and social rewards.

And even if they don't reach the pinnacle of income in their fields, they can benefit from the psychological rewards of their professions. Can there be any greater reward than for a doctor to save a patient's life?

Other people may choose to work in fields that aren't as difficult to enter but can provide an attractive set of workplace benefits.

Look at how employers who are competing for qualified workers bid up salaries, offer health insurance and retirement plans with matching contributions, or provide vacation pay, tuition reimbursement and paid time off.

2. Scarcity is real

Is there scarcity in the world? Can there be any doubt of this? What is one of the scarcest things we have? Time.

None of us has enough time to do all the things we would like. As a result, we have to make trade-offs. Which would we rather do — watch our child's ball game or go fishing? Would we rather take a family vacation to Florida or save money for our children's college education?

And of course, would we rather spend all of our earnings today or save some for retirement? As Mick Jagger, a former student of the London School of Economics, sang, "You can't always get what you want."

3. Division of labor creates efficiency we can all benefit from

In 1776, Adam Smith wrote about the benefits of trade and economies of scale. A worker who specializes can be far more efficient in producing goods and services for himself and others than a worker who tries to do everything himself.

A great example of the division of labor is Smith's description of a pin factory, where he wrote that a single man working alone "could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty.

"But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades …

"I have seen a small manufactory … where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day."

4. Choices involve opportunity costs

• Making a choice to do one thing means not doing another
• Eating at a fine restaurant means not going to a Broadway show that night
• Buying a Ford F-150 now means not taking a weekend getaway later in the year
• Do you like an expensive latte every morning, or will you make a home-brewed cup of coffee?

There is no right choice. Each of us must choose what's important to us.

5. Trade makes us better off

The benefits of trade generally outweigh the costs. No matter what you do, there are things that others can do better and/or cheaper. Or they might not be better than you, but you may be better served by doing something else that gives you a comparative advantage.

If you spend all your time growing corn, you might be able to afford a home, a car or trip. But you can't be a farmer and also build your own home, build your own car or build an airplane.

It makes more sense to do what you do well and let others do what they do well. And this is true whether you trade with your neighbors, people in other cities and states, or other countries.

America is a great supplier of food to the world, even though a small part of our population works in agriculture. Workers in other countries are more efficient in other areas and can build computers and smartphones at a substantially lower cost than we can.

When we trade corn and soybeans for computers and phones, everyone does better.

6. Money has a time value

Would you rather have $10,000 today or in a year? In this case, take the money now. A year from now, what the money buys may and probably will be less.

What if the choice is to take $10,000 today or be paid $12,000 in a year? In this case, the future dollars will be 20% higher. As long as inflation is less than 20%, the value of the future dollars will be greater than the value of the dollars today.

But here we come back to the opportunity cost. Taking the money today may make it possible to buy something that you can enjoy and benefit from now. Would you rather have a new home today or in a year? It depends:

• What kind of home?
• Where?
• How close to friends, relatives and work will it be?

All of these factors come into play.

Because each of us has our own values, economists can't say what a better choice is. They can tell us what some of the trade-offs are.

And that, in the end, is why economists don't always reach conclusions. However, they will tell us that the best answers depend on which hand we consider.

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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.

Graduation and adulthood are still years down the road for my two young kids, so my focus now is on setting them up for success when they get there. One way my husband and I are doing that is through 529 college-savings plans.

With these investment accounts, you can set aside money that grows tax-deferred and withdraw it tax-free for qualified education-related expenses, including college tuition and fees, room and board, and computers.

A common concern among parents who contribute to 529s is that their kids won't end up going to college, or that the costs will be lower than expected. Luckily, the qualified uses for 529 money have expanded in recent years.

The One Big Beautiful Bill Act, signed into law last summer, introduced additional eligible expenses, including tuition, books and other fees associated with qualifying non-degree credential programs, such as for plumbing, electrical work, HVAC and welding. You can also withdraw up to $20,000 per year for elementary and secondary school tuition, course materials, tutoring, fees for standardized tests, and more. (Not all states follow the federal rules, so check your state's policies.)

If you end up with leftover money, a compelling option — one that I'm keeping in my back pocket in case my kids don't need all their 529 funds — is the ability to roll over up to a lifetime limit of $35,000 of the 529 balance, tax- and penalty-free, to the beneficiary's Roth IRA.

The 529 plan must have been held for the beneficiary for at least 15 years before you can make this move, and you can't roll over more than the Roth IRA contribution limit ($7,500 in 2026 for those younger than 50) each year.

Even if you withdraw 529 money for non-qualified expenses, all is not lost. You'll pay income tax and a 10% penalty on the investment-earnings portion of the distribution, but not contributions.

Picking a plan

Almost all states sponsor a 529 plan, and you can invest in any of them. More than 30 states offer a tax credit or deduction for contributions. Usually, you can get that tax break only if you invest in your own state's plan.

But in Arizona, Arkansas, Kansas, Maine, Minnesota, Missouri, Montana, Ohio and Pennsylvania, residents get a tax benefit no matter which plan they choose.

If you're shopping among plans, compare features, including the investment options and costs. Most plans offer age-based portfolios that gradually dial down the risk, shifting to more-conservative investments as your child approaches college.

When it comes to minimizing fees, opening an account directly with the state, rather than through a broker, is your best bet. You can compare plans with Saving for College's tool here. The site also rates plans based on performance, ease of use and more.

Read: The Best 529 Plans of 2026

Watch for promotions that could give your savings a boost. May 29 is National 529 Day, and some plan sponsors offer a cash bonus or match to families who open a 529 during a specified window near that date.

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

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Graduation season is here! While most students fresh out of high school or college welcome a cash gift, you can go a step further by offering it in a way that helps them form good habits and sets them up for a bright financial future. Consider these options.

Give them a savings boost.

One of the best gifts you can give a young graduate is a jump-start on their savings. You could, for example, seed their emergency fund, giving them money to put in their savings account.

Or you could supplement their retirement savings. If the grad is earning income, they can fund a Roth IRA. Contributions to a Roth are made with after-tax money, but withdrawals of those contributions are tax- and penalty-free anytime.

Once the owner reaches age 59½ and has had the account for at least five years, withdrawals of investment earnings are free of taxes and penalties, too.

Offer to make a matching contribution for every dollar that the grad puts into the Roth, suggests Cary Carbonaro, a certified financial planner and managing wealth adviser at Ashton Thomas Private Wealth in Scottsdale, Ariz.

The total contribution (including your gift) that those younger than 50 can make to a Roth IRA for 2026 is $7,500 or an amount equal to their earnings for the year, whichever is less.

Another option: Purchase a Series I savings bond from the U. S. Treasury website, at TreasuryDirect.gov, as a gift.

An I bond's interest rate consists of a fixed rate that never changes and an inflation-based rate that adjusts every six months. The composite rate for bonds issued from May through October 2026 is 4.26%.

An I bond isn't redeemable until the owner has had it for least a year. But it can be an excellent long-term savings tool, reaching full maturity after 30 years.

Whittle their debt.

Student-loan debt can be a heavy burden. The median debt among individual borrowers was in the range of $20,000 to $25,000 in 2024, according to the Federal Reserve.

You might offer to cover, say, a few months of the grad's loan payment, or a portion of the payment for a longer period.

If the graduate has credit card debt, assisting with those payments could be even more impactful. Average interest rates were recently about 22%, according to the Federal Reserve.

And young adults in their twenties have an average of $3,493 in card debt, according to credit-reporting company Experian.

Pay for a financial-planning session.

A graduate who has little in savings and investments may not come to mind as a prime candidate to sit down with a financial planner. But a visit with a professional can help a young adult set a strong foundation.

They might, for example, benefit from a planner's guidance in crafting a budgeting and saving strategy, paying down debt, and reviewing insurance options.

Carbonaro suggests scheduling a one-time, 90-minute session with a CFP. Hourly rates typically run from $200 to $400, according to financial website NerdWallet.

Advisers in the Garrett Planning Network and XY Planning Network offer their services on a fee-only basis — that is, they are paid only by their clients and do not accept commissions for selling financial products — and they don't require clients to meet certain asset minimums.

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

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Under what circumstances should university students be allowed to take their final exams before the scheduled date or after? Could a professor who denies a request get into trouble if a student complains?

"Ada" teaches history at a major West Coast university. She phoned our office, worried that two of her students in an online course were going to file a grievance against her.

"Mr. Beaver, I have read you in Kiplinger for years and need your help. My syllabus lists all exam dates and times, along with my policy on rescheduling an exam, which is the same as the university's." She included the policy, which states:

With few exceptions, students are not permitted to take any test early or late. Those exceptions include:

• Emergencies, including verifiably documented medical issues, deaths
• Preapproved university events, including athletics and conferences
• Religious observance. Accommodation will be allowed for alternate exam dates if a scheduled exam conflicts with a student's religious creed. Students should tell me during the first three weeks of class beginning, or as soon as possible after an examination date is announced.

In those events, an alternate exam will be administered, different from the test that all the other students have taken to prevent test questions being leaked to others in the class.

Ada's syllabus, which legally forms a contract with students, states in bold letters: "Students are required to show up or log in for all tests. Failing to do so without my approval will result in a failing grade."

A chance to visit Italy

Ada told me, "Two students rushed into my office, without making an appointment, and didn't ask — rather, they stated that I needed to let them take the final exam early or late, because the family of one had just invited both to accompany them on a trip to Italy.

"I pointed out that the test is online, multiple choice, true/false and, with a cell phone, they could take it, even in Italy. They rejected my explanation, so I encouraged them to sign up for the course next term, as not taking the final would result in a failing grade. They left the office in tears, and I heard them mumbling 'grievance' as they walked down the hall."

Ada added, "As I am a new employee, the last thing I need is a black mark on my record, and I am afraid to tell my department chair, so my thinking is that I will send them a polite letter inviting them to sign up for the class next term if they plan to miss the final. What do you think I should do?"

Do not let yourself get blindsided

In my law practice, I've spoken with new and tenured instructors who've experienced virtually identical situations and worried about bringing a student's entitlement issue to the attention of their department chair for fear of looking like a problem employee.

Yet, Ada's silence could be dangerous, as the students could use the grievance process to extort what they want and embarrass her.

"Talking with your chair now is the correct approach," I told her. Here's why:

• This prevents the chair from being blindsided if the students file a grievance and the chair hears about it from the dean instead of from Ada. By just saying, "I want to be certain that I am handling this properly," she would show herself as a responsible faculty member and that she is being fair to all the other students in the class.
• Sending a letter to the students before alerting the chair means she could inadvertently use language the department might not approve of.
• The chair may agree that she should write to the students, and if so, Ada should ask if there is preferred language she should use. She should also show a draft of the letter to her chair for editing and approval.

Heads, I win; tails, I win

I discussed these issues with grievance personnel at universities around the country, and it became painfully clear that higher education has become a world like Alice in Wonderland's, where up is down, right is wrong, and entitled students have found a "heads, I win; tails, I win" strategy to coerce higher grades or avoid consequences for academic misconduct, such as plagiarism or failing to show up for a final exam.

All of the people I spoke with agreed that Ada must immediately alert her chair. By doing so, she would thwart any scheme the students might try to force her to cave in to their demands.

One longtime staff member at a Florida university's grievance office described these students' justification for rescheduling the exam as "capricious."

His tone conveyed disgust. (He asked not to be identified so he could speak bluntly.)

"We see this all the time, and you really have to wonder what kind of education at home they get, as so many view threatening instructors with grievances (as a means) to make up for their failings. If they do not log in for the exam online when it is given, I would tell Ada to give them a zero!"

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.

Question: Our grandson just graduated from college with $45,000 in debt. I want to pay off his student loans, but my husband says we can't afford it. We're 73-year-old retirees with $2.1 million and $4,000 a month in Social Security that covers most of our bills. Who's right?

Answer: You'll often hear that college graduates are drowning in debt. That might not be true for everyone, but the average student loan debt, including private loans, could be as high as $42,673 today, reports the Education Data Initiative.

A balance that large could be difficult to shake for recent grads who aren't diving into instantly lucrative careers. If you're a retired couple who's financially comfortable and have a grandson who just walked away with a $45,000 pile of student loan debt after wrapping up his studies, you might be inclined to help.

If you're sitting on a $2.1 million nest and your $4,000 monthly Social Security check mostly covers your bills, it's clear that you have some wiggle room in your budget. But your husband might not be as convinced.

Here's how to figure out how to lend a hand in a manner that doesn't compromise your financial security or convey the wrong message.

Paying off the loan probably won't change your lifestyle

A $2.1 million nest egg is not the same thing as unlimited financial resources. But if you're mostly able to live on Social Security and that $2.1 million is just your "extra" cash, a $45,000 withdrawal might have a minimal impact, says Deon Strickland, Ph.D. financial adviser at Scholar Advising.

"If you’re looking at the couple, 73 years old, about $2 million in retirement assets, and $4,000 a month in Social Security, you’re probably talking about somewhere around $100,000 a year, give or take, available to spend after tax," he says. "They’re in a position where this decision is not going to dramatically change their lifestyle."

That doesn't mean you should just write a check without thinking things through, though.

As Strickland says, "This really comes down more to the relationship with the grandson and what they’re trying to accomplish. If the grandson has been responsible, appreciates the opportunities he’s had, then maybe there’s a way to help. But it doesn't necessarily have to be just writing a check."

Strickland says you shouldn't feel obligated to pay your grandson's debt in its entirety.

"It could be structured," he explains. "It could be something like, 'If you pay the first $5,000, we’ll match it.' Something that reinforces good behavior rather than replaces it."

Consider your goals carefully

A $45,000 gift to repay student loans might be a small chunk of a $2.1 million pool of money. But for your grandson, it's huge.

Strickland says that if you're looking to make that gift, it's important to tell the right story.

"It’s more about what they want to pass on, not just financially, but in terms of values," he says. "While $45,000 is not going to be a huge shock to their overall financial picture, it is an opportunity to demonstrate how to make good financial decisions."

In other words, if you're going to give your grandson the money, set some expectations and help him realize what that gift represents. It could be the thing that allows him to build savings early on or get a head start on accumulating his own retirement nest egg so that he might one day be in a position to help a grandchild pay off their student debt.

Figure out the path that's best for your cash flow

Even though you can probably afford to pay off your grandson's $45,000 debt without blinking, that doesn't mean you shouldn't try to do so strategically. Brandon Agamennone, CRPC and wealth management adviser at Victory Private Wealth, says you have several options for handling that bill.

"It depends on what you need for your income," he says. But one option is to use dividends or interest from your portfolio to pay off the loan over a few years. Another option is for each of you to give your grandson a $19,000 gift this year, for a total of $38,000, to stay within the gift tax limit. You can then tackle the remaining loan balance the year after.

Another option? "If you have RMDs on a portion of your investment portfolio," Agamennone says, "you could take those and then gift some or all of that amount to your grandson to pay off the student loan."

Make sure your grandson knows what repayment options he has

A $45,000 student loan bill might seem overwhelming to a new college graduate. But before you rush to come to the rescue, you could want to walk your grandson through his options for repaying that debt, either on his own or with assistance.

"I would have the grandson understand college loan consolidation options," says Brian Safdari, founder of College Planning Experts. "Maybe the [grandson] can get some student loan interest deductions while working."

Safdari thinks it's important that borrowers realize that there are different ways to tackle college loans. With federal loans, for example, there are income-based repayment plans that can be more affordable.

"Start with a strategy and a plan first," he says. "Then execute the best plan that provides the family the best outcome."

That plan could involve having you foot some or all the bill, but it's important to dole out that money in the context of a broad plan everyone involved is on board with.

Next Steps to Help Your Grandchild Afford College

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  • We're 75 With $3.2 Million. Our Grandchild Needs Help Paying for College.
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It's easy to assume that earning more money will solve all of life's financial problems. It's logical: If the income increases, the financial pressure should subside.

But, for many of us, the opposite happens. The paychecks are bigger, yet the feeling that you're still behind hasn't gone away.

Hitting a long-term salary goal can lead to a flood of thoughts and emotions including, "This still doesn't feel like enough."

What often gets overlooked is that income alone doesn't determine how financially secure you feel. Two people can earn the same salary and have different financial experiences. The deciding factor usually comes down to how that income is managed, spent and structured over time.

Why do you feel like you're behind?

In most cases, lifestyle is where the gap begins to form. As income starts to increase, spending usually follows suit. Earning a higher salary can often lead to higher fixed expenses, such as a more expensive apartment or a newer car, or increased daily spending.

Although more money is coming in, increased spending is diminishing what's left after necessities and bills.

The shift isn't always dramatic. Small upgrades such as dining out more often, taking more weekend trips, even prioritizing convenience can become routine. As time progresses, those habits can shift what feels normal, making it harder to identify where the extra money is going.

For many Americans, earning more money can also come with the feeling of needing to catch up. This can range from aggressively paying down debt to covering prior financial gaps, which can absorb additional funds before they can be saved or invested.

Additionally, the cost of living has increased significantly. Since 2020, household expenses have increased 25%, according to a report from Boston College. Food and transportation costs are up 30%.

Consequently, higher incomes don't stretch as far as they once did. For a proportion of Americans, what used to feel like a comfortable salary now feels like it's just covering just enough to survive.

When all of these factors compound, it's easy to see why earning more doesn't always translate to feeling financially secure. While it may feel like a tough situation to navigate, the solution isn't necessarily earning even more, but changing how the income is being used.

Remove the guesswork

Prioritizing savings before doing anything else is one of the most effective strategies to begin creating financial stability.

Allocating a fixed percentage of income, whether it's 2% or 6%, builds consistency regardless of how much is earned.

Rather than saving what's left over at the end of each month, which can vary, saving a fixed amount biweekly or monthly soon becomes a built in part of your financial routine.

For those who earn more than the average annual salary, the issue usually isn't income, it's structure.

According to Forbes Advisor, using data from the Bureau of Labor Statistics, the average annual salary in America is $64,505. For someone earning well above that amount, the expectation is that financial stress should go away.

However, without a clear framework for managing that money, the additional income can be spent just as fast as it's earned.

The key to making meaningful change starts with a shift in mindset: Pay yourself first. Treat every savings or investment contribution as your first expense, rather than something that happens after everything else is paid. Doing this removes the guesswork, ensuring saving doesn't become dependent on what's left over at the end of the month.

Earning more money is a great accomplishment. It can create more opportunity, but it does not guarantee financial stability. Making real progress comes down to how that extra money is managed over time.

Ron Tallou is a registered representative of and conducts securities transactions through CoreCap Investments, LLC. Advisory services offered as an investment advisory representative of CoreCap Advisors, LLC. RJP Estate Planning is a separate entity and not affiliated with CoreCap Investments or CoreCap Advisors. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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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.

Just about every day now, I get emails and phone calls from readers asking the same question: "With what we are seeing, AI is leading to the wholesale firing of hundreds of thousands of employees across entire industries. Should I consider law as a career?"

My answer: Let history be your guide. Consider these questions:

• What was the dominant means of transportation in the early 1900s in villages and cities across our country?
• Who, and in which profession, assured their dependability?
• How many of them were there in the late 19^th century? How many now?
• What one factor explained their vanishing as a primary industry, and when it first emerged, was it seen as a threat to their profession?

Indispensable to daily life

The answer: The village smithy, aka the blacksmith, assured that horses could provide the transportation that was indispensable to daily life. Blacksmiths numbered in the hundreds of thousands in the late 19^th century, but there are only about 10,000 today.

When the first automobiles hit the market, they were seen as playthings of the wealthy, not a threat to the respected role blacksmiths held in society.

I submit that AI is today's equivalent of the automobile, and it's having a similar impact on the legal profession as law firms no longer require dozens of junior lawyers to search through millions of pages to find a smoking gun when AI can do it, and so much more, in minutes.

Solving a problem without a lawyer

One of my clients, "Dr. Dan," called the other day, thrilled to tell me how he'd used AI to avoid becoming the victim of his landlord's unreasonable requests. "She sent a modification to our lease that made no sense at all. I could have called you, but first I asked AI if this was legal and reasonable and how could I politely reply.

"AI said that it was not legal and asked if I wanted a response that I could send, in lawyerlike language, explaining why the landlord was wrong. I typed, 'yes,' and in a couple of seconds, I got a beautifully reasoned response, which I sent to her.

"She phoned me right back saying, 'Dan, you're right. But tell me, how much did your lawyer charge you for this letter? It is so well written!' We had a good laugh. I think AI is going to put a lot of lawyers out of work."

What do law school deans and admissions officers say?

To get a feel for what the top brass in higher education have to say, I reached out to several deans and admissions officers and left this voicemail: "How will AI impact law? Today, would you advise a family member to apply to law school? Also, can you explain the enormous increase in applications to law schools the past several decades?"

Two agreed to discuss these issues on condition of anonymity so they could be perfectly candid, and both noted one of the most important reasons we have seen an enormous increase in the number of law students over the past few decades: Money (for the schools).

"The growth in law school enrollment hasn't matched the actual need for new lawyers," said the dean at a Midwest law school. I'll call her Anna. "The ratio of lawyers to the U.S. population today is four times what it was in 1970, and many of our graduates are underemployed and facing enormous student loan debt.

"The explosive growth in admissions over the last 50 years was primarily because law school is a cash cow for universities.

"We can't lose — but no one cared if students would get hired into positions where they could have a decent life and repay their loans.

"And the more students we admit, the greater the damage will be due to AI. Law schools are motivated by tuition, not placement. It is as if we are graduating manual laborers into a robot-factory economy, and there will be pain."

Big, bad gamble

The dean of a Southern law school, whom I'll call Stacey, pointed out, "As we speak, law school enrollment is surging, and many students are making a horribly bad bet on future, high-income employment. The supply-and-demand mismatch will be horrible as AI adoption scales upward."

Both educators provided this gloomy outlook on the future: Law school graduates of 2027 and 2028 will be entering a job market where AI has progressed from the testing stage to real, daily operational functionality.

Their advice: Look for a law school with a curriculum that teaches how to use AI — those courses will impress an employer.

So, here is what anyone considering law school needs to keep in mind: Just as the Model T didn't put blacksmiths out of work overnight, we are not going to have fewer lawyers immediately. Those who can master AI will be hired and well compensated.

Anyone considering law as a profession might want to check out the one-star ratings of law firms on Yelp. Also, give these questions some thought:

• Why do so many young lawyers leave the profession?
• Why do so many attorneys become alcoholics and substance abusers?
• Why are they so disillusioned?
• Why do they have such a high divorce rate?

Instead of being a lawyer, why not become a blacksmith? At least you'll be paid for — wait, it's coming — horsing around.

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.

Federal student loans are undergoing an overhaul. Starting July 1, new students who take out a loan will have fewer repayment-plan options, and some families who already have loans will be forced to select a different repayment plan.

Parents who take out federal loans to help their children pay for college may be subject to new borrowing limits. And for those starting a new graduate or professional degree, Graduate PLUS loans will no longer be available. The One Big Beautiful Bill Act (OBBBA), signed into law last year, ushered in these changes.

If you or your child is already paying off student loans, or if your family is planning to borrow for college in the future, there's a good chance some of these updates will affect you. Here, we offer details on what you should know, as well as strategies for families to make the best choices.

The new student loan repayment plans

The OBBBA narrows to two the options for students taking out a loan on or after July 1. One is an income-based plan known as RAP (Repayment Assistance Plan). Under this new plan, payments range from 1% to 10% of the borrower's adjusted gross income, with a minimum payment of $10 a month. Lower-income borrowers pay a smaller percentage; the maximum 10% applies to those with an AGI of $100,000 or higher, and there's no dollar limit on the monthly payment. RAP deducts $50 from the monthly payment for each of the borrower's dependents. After 30 years, any remaining balance is forgiven.

The other option for new borrowers is the Tiered Standard Plan, with fixed payments over the course of 10, 15, 20 or 25 years, depending on your federal loan balances. If your loan balances add up to less than $25,000, the repayment term is 10 years. For loans of $100,000 or more, the term is 25 years. Borrowers may prefer this option if they want fixed, predictable payments, if they would like to pay off their loan more quickly than they might with RAP, or if their payment with this plan is lower than it would be with RAP.

The Public Student Loan Forgiveness program remains in place. Those who have direct loans and work for a government or nonprofit employer, such as firefighters, teachers and first responders, can have remaining balances forgiven after 10 years of repayments on either plan. To minimize the amount they pay before forgiveness, those who may qualify should evaluate each year whether RAP or the Tiered Standard Plan results in a lower monthly payment.

Choices for those who borrowed before July 1. The OBBBA brings an end to three income-based repayment options: SAVE (Saving on a Valuable Education), PAYE (Pay As You Earn) and ICR (Income-Contingent Repayment). Borrowers who are in one of these plans will have to choose among the remaining options — and those on the SAVE plan will have to make a decision soon.

The SAVE plan was designed to be more affordable than other income-based plans, in part by preventing unpaid interest from accumulating enough to cause the loan balance to grow. Borrowers enrolled in SAVE will need to change plans in the coming months, with their servicer providing information on the deadline. They can choose among existing plans, but if they go with PAYE or ICR, they'll have to switch again before those plans sunset in 2028. Starting July 1, 2026, SAVE borrowers can also select among the new repayment-plan options.

Before July 1, 2028, borrowers on the PAYE or ICR plan will have to switch to the new RAP or Tiered Standard Plan, or they can choose IBR (Income-Based Repayment), the sole remaining option among existing income-based plans. IBR caps monthly payments at 10% or 15% of your discretionary income, depending on when you first took out the loan. Payments can be as low as $0, with a repayment time frame of 20 to 25 years.

Because IBR limits your payment based on income, it may be the best choice for borrowers with higher income and debt levels. For instance, with $100,000 in loans and a salary of $80,000, the monthly payment on IBR would be $334. For a RAP borrower with no dependents, it would be $534.

Borrowers with lower debt and income may be better off with RAP. For example, someone with $30,000 in debt and $50,000 in income who has two kids would have a $25 payment with RAP, compared with $84 with IBR.

Student loan strategies for parents

Parents who take out a PLUS loan before July 1 can borrow up to the cost of their child's attendance, minus the amount of any grants, scholarships and federal loans made directly to the student. For loans disbursed on or after July 1, parents can borrow up to $20,000 per student annually, with a total limit of $65,000.

If your student was enrolled in school before the 2026–27 school year, you can maintain access to Parent PLUS loans under the previous borrowing standard for three years, as long as your child's school and degree type don't change and they don't take a semester-long break from classes other than for an approved medical reason.

If your child is scheduled to start school this fall, you may be able to access Parent PLUS loans under the pre–July 1 borrowing limit if they enroll in classes for the summer 2026 session. If you go this route, apply as early as possible for summer financial aid on the 2025–26 Free Application for Federal Student Aid, or FAFSA (the federal deadline is June 30, 2026). The courses your student takes must count toward their degree and add up to at least half-time status.

Before you take on debt to fund your child's education, however, make sure you have a solid plan for your own financial security. “I discuss holistically with clients how student loans will affect their retirement, vacations, ability to buy a new home and other personal life goals before they decide how much to borrow,” says Jack Wang, a wealth adviser and host of the Smart College Buyer podcast.

To prevent both students and parents from getting in over their heads, families may need to consider such cost-cutting strategies as focusing on affordable schools or having the student start at a community college and then switch to their preferred school later.

Repaying parent loans. Under the rules in effect before July, parents have a few ways to repay their PLUS loans, including a plan with fixed monthly payments for 10 years. Borrowers who owe more than $30,000 can use a plan that spreads fixed payments over 25 years.

Parents who consolidate PLUS loans from different school years into a single federal loan are also eligible for an income-based plan, which could lower their payments, with any remaining balance forgiven after 25 years. But starting in July, new parent borrowers have access only to the standard repayment plan, with fixed payments that are spread over 10 to 25 years.

If you act quickly, you may still have time to consolidate your PLUS loans and then enroll in ICR before July, at which point the new law cuts off this strategy. Even if your payments are manageable now, you may want to do this if income-based payments could benefit you at some point— say, because you expect to be paying off the loans in retirement, when your income may be lower than it is now. As long as you make one payment in ICR first, you can then change programs to IBR.

Note that if you take out a new Parent PLUS loan on or after July 1, you'll lose access to the income-driven repayment option, even on any loans you consolidated before that deadline. To avoid that scenario — and reduce your borrowing — consider other funding options. Most schools offer low-fee tuition-payment plans that allow you to make payments throughout the year.

Student loan updates for graduate and professional students

Until July 1, students earning a graduate or professional degree can access two types of federal student loans: Unsubsidized loans and Graduate PLUS loans. With unsubsidized loans, you must pay interest while you're in school. These loans charge lower interest rates than Graduate PLUS loans, so borrowers should turn to unsubsidized loans first.

For students who can't cover all their education expenses with unsubsidized loans, Graduate PLUS loans can bridge the gap up to the full cost of attendance. But starting July 1, borrowers can no longer take out Graduate PLUS loans. Students can still take out unsubsidized loans, but with some new caps on how much you can borrow.

Graduate students (including those earning a master's degree as well as those in most PhD programs) will be subject to a lifetime cap of $100,000 for unsubsidized graduate loans; the annual limit is $20,500. For students in eligible professional programs, such as medical, dental, law and pharmacy school, the unsubsidized-loan limit is $50,000 annually. The lifetime limit, not including undergraduate loans, is $200,000.

If you were enrolled in graduate or professional school before July 1 and haven't taken out a federal student loan yet, consider getting one for the spring or summer session if you think you may need one in the next three years. If a direct loan is disbursed before July 1, 2026, you can keep borrowing Graduate PLUS loans for up to three years while completing your program. Taking out even a $100 loan gives you the option to borrow more later, if you need it.

Scheduled to start your graduate or professional program this fall? Call admissions and see whether you can apply for the summer 2026 session, starting your program early and potentially allowing you to get a Graduate PLUS loan before the July 1 deadline. Confirm it will not affect any other financial aid you're scheduled to receive in the fall and spring terms.

You'll need to enroll in enough summer coursework to be designated at least a half-time student (and apply for financial aid that is disbursed before July 1, 2026), to be grandfathered into the PLUS loan program, says Sarah Austin, policy analyst for the National Association of State Financial Aid Administrators.

Options beyond federal loans. With Graduate PLUS loans off the table, some borrowers may consider private loans. Generally, however, private loans don't come with the same protections or income-driven repayment options that federal loans do, so you'll need to weigh the decision carefully. And it's best to limit your overall student debt as much as possible. A financial adviser can go over a post-graduation budget with you, factoring in your expected salary.

If you determine that you can afford to take on some private loan debt, consider national non-profits such as MEFA or EdvestinU, says student loan expert Colleen Krumwiede. These providers can offer options for borrowers who may not qualify for other loans because they have a thin credit history or don't have a cosigner. She also recommends looking for lenders that specialize in certain majors. For instance, a lender that focuses on medical student needs may also lend money for residencies.

Check for state lending programs, too. “A small number of states already run their own student-loan programs, some dating back decades,” says Thomas Harnisch, vice president for government relations at the State Higher Education Executive Officers Association.

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

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College graduation season is approaching, so a lot of new professionals will soon hear this timeless financial adage: Pay yourself first.

It's simple and smart. Make saving and investing a priority before everything else claims your paycheck. But it's only part of the picture.

Building a strong financial life often comes down to three habits that reinforce one another: Pay yourself first, pay attention to your career and, eventually, pay it forward to others.

Here are five things for new college grads and young professionals to pay attention to right now.

1. Start building for retirement

Retirement seems super far away when you're just starting out. You might wonder if there will ever come a time when you really won't be working — or even wanting to work.

But one day, you'll want to have options, and that's what retirement is — the choice to work or not work, to scale back or try something new or be choosy about when or how you earn money.

Options and choices require a nest egg. The bigger it is, the more options you have.

Start by fully participating in your employer's 401(k) or similar program, contributing at least as much as your employer will match.

If your employer doesn't offer a 401(k) or other retirement plan, you can open and fund an IRA. A good general rule is to save the first 10% of your gross income.

When you intentionally set aside money for the future, you form a powerful habit of paying yourself first and living within your means.

You won't miss what you don't have to spend, and you'll quickly learn to love the power of compounding as you earn interest, not just on the principal invested but on the interest.

When you start early, you don't have to save crazy amounts to make up for lost time; you just have to be consistent.

2. Set aside cash reserves

Plan for the unexpected because the unexpected always happens. The car breaks down. Your friend decides to get married on a moment's notice in some expensive destination. You buy a house and the roof leaks during the first hard rain. You lose your job.

Start your emergency fund now. Aim to have at least three months of living expenses covered, then keep going, because as life goes on, the emergencies only get bigger.

Once you've set aside money for retirement and contributed to your emergency reserves each month, you're free to spend whatever lands in checking — after rent or mortgage, car payments, student loans, utility bills and other essentials.

Adulting is hard. It gets easier, especially if you're disciplined and focused on what matters.

It's pretty liberating to know exactly how much money you have to spend on whatever you want. Some adults never get there.

3. Keep learning

If there's something you want to learn how to do, do it. It could be that you want to pick up a new hobby — do it. Learn how to play tennis or take up knitting. I'm a big believer in having hobbies outside of work and family that feeds your soul.

You could even take classes through your community college, which is what I did when I was fresh out of college — and it changed my life.

After graduating with a journalism degree from the University of North Carolina at Chapel Hill, I thought I'd be the next Katie Couric. Instead, I landed a bank job in my hometown, Charlotte, North Carolina, the banking capital of the South.

I wasn't a financial adviser then, and I just wanted to know what to do with my very first 401(k). I found a class at a local high school run by the local community college.

I loved that class so much — and it showed. The teacher suggested I become a financial adviser, so I entered the financial adviser training program at the bank where I worked.

Later this year, I'll mark 20 years as an adviser. I still use what I learned in that class — empathy and appreciation for how we are all on our own financial paths.

I met a widow who had never written a check before — a foreign concept for my generation and the ones that have followed. You never know what you'll learn, who you'll meet and how it will change your life — perhaps for the better.

4. Take time to network

Get to know your co-workers, other people at your company as well as other people in your industry and in your community. You must take the time and be intentional.

Just as with investing and saving money, you have to start early and be disciplined so that it becomes a habit and doesn't feel too outside your comfort zone. If you don't do this, your professional world will be small and stay small. That's no way to grow.

As one of my friends likes to say: Nobody will ever care as much about your career as you do.

Get out there. Make coffee meetups and lunch dates. Join professional organizations. Invest in your professional development. You and your career are worth it.

5. Invest in your community

Pay it forward by volunteering for causes and organizations that matter the most to you. Not so that you have something to put in the volunteer work section of LinkedIn, but because it will make you a better human — and strengthen your community. It might be something you wish later you had more time to do.

If you're afraid of a long-term commitment, start small. Plenty of organizations offer one-off experiences — from stocking food pantries to visiting older people in senior centers.

You could work the polls on election days, foster dogs or join the Meal Train committee at your church.

As you find what you like, you can choose where to focus and if you want to devote more time by joining a board.

Take the time now, and as with saving and investing money first, you won't miss it. Everyone thinks they're busier than they are.

Bottom line: By being intentional with your time and money early in your career, you're investing in a rich life for your present self, your future self and the people and things that matter most.

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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.

Stepping away from work to take care of a loved one is a selfless act, but even a temporary pause can bring long-term financial consequences.

Whether it's raising children, caring for elderly parents or taking care of a spouse who is sick, that responsibility often falls on women. In 2025, 61% of family caregivers were women, compared to 38% of men, according to AARP.

In addition to the increased physical and emotional pressure of caregiving, 19% of women say they've experienced financial strain, compared to 16% of men. That's where long-term planning becomes crucial. Without a plan, recovering from a loss of income and future earning power can be extremely challenging.

Retirement savings take a hit

Taking time off work not only reduces your income in the short term — it can also impact your ability to earn at the same level in the future, disrupting your career momentum and long-term earning potential. When you stop earning income, even temporarily, retirement savings are usually the first to take a hit.

Many employers offer retirement savings programs as part of their benefits package. For example, some companies will allow you to contribute to an employer-sponsored plan, such as a 401(k). Others may offer to match your contributions up to a certain percent. When those contributions stop, the ability for that money to grow over time is also lost. This is where the financial impact can start to build

Time is one of the most important factors in building retirement savings because of compounding. Basically, this allows your money to grow on itself over time. The longer you remain invested in the account, the more opportunity it has to grow. Pausing contributions, even for a short period, can reduce how much time your money has to grow. Those missed years can be difficult to make up down the line. As a result, what may feel like a short-term decision in the moment can have lasting impacts in the future.

Reduced Social Security benefits

Beyond retirement savings, leaving the workforce can impact your Social Security. Benefits are based on your highest earning years. As a result, stepping away can lower your overall earnings record, which can lead to reduced benefits when the time comes to collect. A lapse in savings combined with reduced Social Security benefits can make it more difficult to maintain financial stability in retirement.

The hidden cost of leaving the workforce

In one case, I was working with a client who chose to leave her job at the peak of her career to care for an aging parent. After caring for her mother for about a year and a half, the parent passed and she struggled to get back into the workforce. It took her nearly a year to find another position. Even then, she had to work her way back up to the level she'd been at previously. In the end, that decision set her back almost five years financially.

I've been confronted with this choice myself. When I started having kids, I had to figure out how to be there for my children while also making sure I was taking care of my future. Instead of leaving the workforce entirely, I became an independent contractor. This allowed me to continue earning income and saving for the future while taking care of my family in the present.

Situations like these aren't uncommon, but they highlight the importance of planning ahead. No one knows what the future holds, but there are steps women can take to prepare.

• Start an emergency fund to help provide a cushion for income disruptions, unexpected expenses or periods of transition.
• Consider exploring options for independent or part-time work. This will give you the flexibility to balance providing care while earning some level of income. That way, you can take care of your loved ones and still protect your future. Working with your employer to find flexibility may also be an option. In some cases, simply adjusting job responsibilities or scheduling can help you balance both responsibilities.
• If flexibility isn't an option, it might be time to explore other opportunities. Women tend to be more loyal to employers, even if it comes at a cost.

Caring for another person is one of the most selfless acts you can do, but it doesn't have to come at the expense of your future financial stability. With proper planning, it's possible to take care of both your loved ones and your financial future.

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

At one point in my life, I thought I had it all.

I had the title, the responsibility, the power, the big salary, the upward trajectory, the perfect house, a cute family — a life that looked perfect.

In reality, I missed dinners with my family, was always preoccupied with work, thought our house wasn't big enough compared with others, and still worried about finances. And ... I was dying on the inside.

I had built the life I thought I was supposed to want, only to realize it was all a lie.

The only thing that really mattered to me was putting my daughter on the bus one more day, because I didn't know if I would have tomorrow.

It took (literal) brain surgery for me to come to this realization.

Many of us have spent years trying to achieve "success," to have what looks like the perfect life, to be seen among our peers as what others think success is.

But rarely have I run into someone who would say for themselves that they've achieved that success. Why? Because as Americans, we have been fed what success is: Bigger, better, faster, more.

In reality, studies show most Americans want happiness first.

Here are five signs you're living someone else's definition of success — and what you can do to start changing course.

1. You're chasing everyone else's idea of 'enough'

You look around and ask yourself, "Is everyone richer than me?" They have a bigger house, a nicer car, and they're still striving for more. You feel as if you need to do it, too. The old "keeping up with the Joneses" mentality.

Inwardly, you're tired of striving and if you really think about it, you don't really care about the bigger house, the nicer car or the bigger title. If this is you, you're chasing their definition of enough, not your own.

Try this. Ask yourself, "What would success look like if nobody else knew about it?" You might realize the things that matter most aren't things anyone can see.

2. You've achieved it, and you're still not happy

You have the car. You have the title. You have the house. You have everything you thought was supposed to make you happy — and you're still not happy. You have an inner voice that whispers, "I thought this would feel different. I thought I'd like this more."

That moment — what I call Unfortunate Awareness — can feel like failure, like you've missed the mark. It's actually freedom. Once you see the truth, you can do something to fix it.

Try this. Don't rush it. Sit in the quiet long enough to hear what that discomfort is trying to tell you, and name it. What isn't right? What isn't working? That's where clarity lives.

3. You define yourself by the role you play

If you catch yourself leaning into a part — "the doctor," "the room mom who always says yes," "the multitasker who can handle anything" — you might be performing more than living.

This is likely because you identify your worth with your title. You've defined success as being that person with that title. My questions: Is this really who you want to be? Are you happy?

Try this. Before you say yes, pause and ask yourself, "Am I saying yes because I really am happy, or because it aligns with the role I feel I'm supposed to play?"

4. You feel guilty for wanting something different

From the outside, your life looks perfect — or so you tell yourself. You guilt yourself into thinking, "I shouldn't say anything, I have so much!"

"Shoulding" yourself out of your feelings is a sure sign that something isn't right. You're feeling the push/pull of what you've been taught success is vs what you really want in life.

Try this. Swap "What will they think if I quit/change?" for "What will I think of myself if I stay/don't change?"

5. You've said to yourself, 'I'll be happy when …'

We've all been told the American Dream is about wanting and achieving more, more, more. It seems the golden ring is always just beyond our grasp. If you find yourself saying, "I'll be happy as soon as …" you might be missing what's right in front of you.

Try this. Finish this sentence: "I'll feel successful when …" Then ask, "What's stopping me from feeling that now?"

What can I do?

The good news is you don't have to burn everything down or start over to change course. You can build a future that feeds your soul and keeps the stability you've worked so hard for by owning your own definition of success.

Start by writing your definition down, reviewing it, and asking yourself where it came from and if it still fits. If not, tear it up and create a new one. Say it out loud. Share it with your loved ones.

It's OK not to want what you think others think you should want, as long as you own it.

Becca Pearce is a personal executive coach, speaker, and author of You Don't Have to Achieve to Be Loved: Escape the Lies You've Been Sold to Design the Life You Want. She helps high-achieving professionals rediscover joy and design lives that actually fit. Learn more at www.morebeccapearce.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.

Many companies are in a "promotion recession," with managers and executives experiencing five-year lows in job advancement rates.

In this kind of environment, high-performing employees can deliver strong results and not see their titles or compensation increase for what feels like career-altering spans of time.

What should these star performers do about it? How does a corporate achiever ensure that they're the ones advancing even in a slow promotion cycle like this one?

Professionals pursuing leadership roles in this environment must recognize a two-part truth: Performance earns respect, but visibility determines who gets selected.

The skill sets underlying those two outcomes are related but very distinct.

Being respected vs being selected

Of the two, visibility is the less well-defined component of an individual employee's career track. It signals how a professional operates beyond the boundaries of their current role.

Leaders notice who influences conversations across teams, who shapes decisions that affect broader outcomes and who already behaves like someone responsible for the next level of leadership.

The difference between those signals becomes starkly visible when promotion cycles slow, making organizations more selective about who moves forward.

Promotion decisions rarely depend on performance metrics alone. They take shape in leadership meetings where executives compare reputations, discuss who already operates beyond their current role and decide which candidates appear ready to represent the organization at the next level.

At organizations with the lowest promotion intensity, workers have just a 1.3% chance of advancing in any given year. When the path narrows that sharply, the difference between being respected and being selected becomes the defining variable in a career.

That is why professionals who consistently deliver strong results can still find themselves passed over for advancement. Their work may be widely respected within their immediate team, but their broader leadership narrative may not yet exist in the rooms where promotion decisions are made.

For many professionals, this moment feels more personal than strategic. They did what their organization asked of them — stayed late, took on the hard projects and steadied teams through uncertainty — yet they still watched while others moved ahead.

This risks the quiet erosion of confidence and engagement that organizations rarely see until it shows up in attrition numbers.

Performance earns credibility. It demonstrates that a professional can deliver results, solve problems and operate reliably within a role. Selection readiness signals something different. It shows decision-makers that someone is prepared to represent the organization at the next level of leadership and influence.

How to get ahead

Professionals need to take responsibility for engineering their own visibility and leadership preparedness story.

If you're one of them, here's where to start:

1. Get clear on your 12-month goal. Not in a vague way — but in a way that takes your personal strengths into account and maps exactly where you want to go in a practical one-year time frame.

2. Evaluate your visibility in the organization. Many professionals can explain their work results in detail, but struggle to answer how the most influential decision-makers in the organization would describe their leadership trajectory today. If your answer to that question is unclear, your visibility gap has already appeared.

3. Make your ambition explicit to leadership. Professionals often assume their goals are obvious from the responsibilities they take on, but in practice, decision-makers aren't thinking about your career goals as much as you are. When you clearly communicate your interest in your next role, it removes any ambiguity about your aspirations and puts you on the radar for career advancement.

4. Create your personal board of directors. Advancement decisions rarely hinge on a single manager's recommendation. Deliberately cultivate sponsors, mentors and allies — each plays a distinct role, just as a company's board does. Sponsors advocate for you in rooms you're not in. Mentors guide your development. Allies amplify your work in the moment. It's not enough to identify these people in the abstract — you need to place specific individuals in each role and know exactly what each one contributes to your advancement.

5. Advocate for yourself. This is not about self-promotion for its own sake. It's about building the muscle to ask for what you want and deserve, rather than waiting for your manager or someone else to speak for you. This is your career, and no one will be as invested in it as you are.

None of these steps replace strong performance. Results remain the foundation of advancement. But without signals indicating readiness for broader leadership responsibility, those results can remain invisible to the people responsible for promotion decisions.

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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.

Question: We're 75-year-old retirees with $3.2 million. Our son's pressuring us to help pay for our granddaughter's college so she can avoid loans. It's not our fault she picked a school that's $90k a year! What should we do?

Answer: It's hardly a secret that obtaining a college degree is an expensive prospect.

The average cost of college today is $38,270 per student per year, which includes books, supplies, and living expenses, according to the Education Data Initiative. The average borrower with federal student loans today owes $39,547. Moreover, the full annual cost of attending a top school can, shockingly, top $90,000. It's understandable that your grandchild wants to avoid graduating with burdensome debt.

If you're well-off retirees, you may be asked to help cover your grandkids' education costs so they don't graduate with debt. But if you have a granddaughter who's chosen a school with a $90,000-a-year price tag, that ask may not be reasonable, even if you have a $3.2 million nest egg to fall back on.

Here's how to handle what could be a tricky situation without hurting your loved ones or putting your own retirement at risk.

You need to be comfortable helping out financially

As grandparents, it's natural to want to help your granddaughter out. But even with a generous nest egg, you may not feel ready to start writing large checks just yet.

Mike McCracken, president and founder of Wealth Guide Financial, says, "Having $3.2 million at age 75 is a great position, but that doesn't mean you should automatically write a big check for a $90,000-a-year school tuition."

McCracken says that before you hand out so much as a dollar, ask yourself whether helping out with college will leave you with enough money to live comfortably for the rest of your lives without the risk of running out of money. Keep in mind that you may have extra costs to contend with, from home repairs to medical bills to long-term care. So the numbers need to work for you.

Brett Bernstein, CFP, CEO and Co-Founder of XML Financial Group, agrees.

"The first thing the grandparents need to do is build a financial plan to ensure that they can maintain their current lifestyle and see how much they can financially help their grandchildren," he says. "Once they have an understanding of the actual number they can contribute, then they have to decide how much of that they want to gift."

Make sure you're treating your heirs fairly

It's one thing to help fund your granddaughter's college education if she's your only grandchild. If not, you risk running into problems if you start cutting her large checks without mapping out a plan.

McCracken says the cleanest way to go about things is to document everything meticulously.

"Have your estate-planning attorney draft a simple amendment to your revocable living trust stating that the amount you paid for college will be subtracted from your child’s or grandchild’s eventual inheritance," he suggests, assuming you have that legal document in place. If not, put something in place before distributing a portion of your assets.

Another option, McCracken says, is to treat the money as an interest-only loan that your granddaughter or their parents will repay.

"This keeps everything transparent, protects the other children’s share, and prevents anyone from being taken advantage of," he says.

Be as tax-efficient as possible with your giving

Unfortunately, there's no easy way to enjoy a tax break in the course of gifting a grandchild money for college. Contributions to a 529 plan may grow tax-free, but you don't get to deduct the sum you put in.

Still, it's important to be mindful of tax implications. To that end, McCracken says that if you're going to help, paying tuition directly to the school is usually the most tax-efficient route. This way, it doesn’t count against your annual gift tax exclusion.

McCracken also warns that giving directly to your grandchildren could reduce their financial aid eligibility.

Bernstein agrees that paying tuition directly is generally the best option, and that eking out tax savings is unlikely.

"The only way for a grandparent to get some benefit is if the school is willing to accept a highly appreciated asset in return for the tuition, or if the school is a qualified charity and the grandparent can [send] part or all of the required minimum distribution directly to the school," he explains.

However, Bernstein says, these strategies typically don't work, so "this comes down to what the grandparent can ultimately afford to gift and their willingness to do so."

Read: Use the 529 Grandparent Loophole to Maximize College Savings

Don't succumb to pressure

Aside from genuinely wanting to help your granddaughter, you may be feeling immense pressure to contribute toward her education. That's why McCracken supports having an honest family conversation and setting clear boundaries up front.

"You can say something like, 'We love you and want to help, but we also must protect our own retirement and want to keep our inheritance planning even among the heirs,'" he suggests.

From there, explain how you're willing to structure the assistance if you feel comfortable chipping in.

"Helping the next generation is one of the most rewarding things you can do," says McCracken. "But it should never come at the cost of your own financial peace of mind."

Read More

• Use the 529 Grandparent Loophole to Maximize College Savings
• We're 62 and Plan to Sell Our $1.2 Million House to Retire, but Our Daughter and Grandkids Live With Us. My Wife Says We Should Stay. I'm Ready to Ask Them to Move.
• I Want to Help Pay for My Grandkids' College. Should I Make a Lump-Sum 529 Plan Contribution or Spread Funds out Through the Years?

Today, I'm sharing two inspiring stories that I think will help motivate college students looking to have an impact on society as they embark on their careers.

This article is in response to a request I received from Professor Deborah Cours, dean of the College of Business and Public Administration and executive director of the Center for Entrepreneurship and Innovation at California State University, Bakersfield, California:

"Mr. Beaver, our students often ask about societally impactful inventions and ventures. You have interviewed many highly successful people. Do you have examples that are specifically relevant to university students looking to make their way in society that I could share with them?"

I'm happy to answer Dean Cours' question. Over the years of writing this column, I've learned what it takes to turn an idea into something that matters, that has real — not hyperbolic, but real — societal impact.

For any entrepreneur, inspiration is important, but it's only the beginning. Societally impactful ventures face a long process of turning those inspirations into something that people use, rely on and, in some instances, depend on to make better decisions.

I have two examples to share: One is a device you can easily hold in one hand that has the ability to both keep the owner out of jail and save a life at the same time.

The other is a book that can provide students with usable, practical insights into themselves and the world of employment.

So, what sparked the inventor's and author's recognition that a societal need existed, the equivalent of seeing someone in a wrestling match with their arms tied behind their back and feeling the need to free them?

'I can fix this problem'

History has made clear that a common denominator in inventive creativity is the thought, "I can fix this problem. I can help."

That is what Keith Nothacker, at the time a twentysomething University of Pennsylvania undergrad economics student, thought more than 20 years ago. The device he developed, of which hundreds of thousands have been sold in over 20 countries, has saved countless lives and kept a vast number of its users out of jail.

Most of us know someone who has been pulled over by law enforcement, suspected of driving under the influence of alcohol (DUI). They are asked to blow into a breathalyzer to measure their blood alcohol content (BAC).

If the resulting number is over their state's limit (most often, .08), typically it's off to the slammer for a few hours, a fine to rival the size of our national debt and auto insurance rates through the roof for years, not to mention the possibility of losing their driver's license.

"It seemed so unfair that the general public had no way to measure their own BAC and, knowing that figure, make an informed decision to not drive," Nothacker told me.

He was asking the key question that led to some of the most meaningful ventures ever started: "Why does this problem exist?"

He wondered why consumers couldn't purchase a personal breathalyzer, and how he could make that happen."

Answering those questions, with help from a team of Penn colleagues, led to the development the BACtrack family of personal breathalyzers.

Of the many entrepreneurs I have interviewed over the years, Nothacker stands out as someone who has directly impacted many people, saving lives, marriages and families.

He can help you get and keep a job

Here's another example of societally impactful innovation I've encountered.

Getting hired today and keeping a job is not a given.

Job-related advice is offered everywhere, but the advice provided by William Vanderbloemen, founder and CEO of Vanderbloemen Search Group and author of Be the Unicorn: 12 Data-Driven Habits that Separate the Best Leaders from the Rest, is among the best I've seen.

In his book, Vanderbloemen zeros in on life and business personality characteristics that lead to success on the job — even in marriage — and explains how to implement them. He helps readers avoid common pitfalls that lead to being fired and, instead, become the most-sought-after person on their team.

Had I been able to read Be the Unicorn at the time I joined the working world, I would have made fewer dumb mistakes. This book can help Dean Cours' students avoid the quicksand of their minds and keep clear of what can cause failure on the job.

I can't overemphasize the value of Be the Unicorn and its companion book, Work How You Are Wired, which avoids the nonsense advice of "follow your passion," providing a data-backed method for discovering your unique "wiring," your innate strengths and the roles where you will excel and find purpose.

The takeaway for the dean's students

Several of their employees told me that Nothacker and Vanderbloemen — as accomplished as they are — remain humble, and success hasn't gone to their heads.

They recognize in their bosses a deep sense of wanting to help and not being motivated by money. Many noted that these two "brilliant, inspiring men make coming to work a true joy."

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.

You hit your 60s. Maybe you're even sliding into early retirement, and suddenly the days stretch out in a way that feels both enjoyable and… weirdly empty. For many, retirement starts after that long-awaited exhale after decades of work. But then the quiet sets in. The structure of the 9-to-5 vanishes, and the identity you built around "what you do" starts to crumble. That's when a surprising number of people decide to hit the late-career reset button, and they go back to work.

The reasons vary, and it's not always because they have to. Although money often plays a part, sometimes it's because something deeper inside pulls them back in.

A recent AARP survey shows that about 7% of retirees have returned to the workforce in the past six months, with more actively looking or planning to return. Nearly one in eight Americans over 65 either returned to work or intend to this year. And it's not just financial pressure driving the return. Much of it is mental. The mental side of a late-career reset is real. Such a move can also be surprisingly rewarding for those who navigate it well.

Why a late-career reset might be exactly what you need

"Assuming a financial plan was in place at retirement, and assuming one follows that with reasonable care, it will not be financial need that drives most people to 'unretire' but rather a need to be engaged and contribute," explains Elizabeth Zelinka Parsons, retirement transition expert, lawyer, and author of the book, Encore: A High Achiever's Guide to Thriving in Retirement. "Generally, they often find it much more motivating to define their goals according to individual purpose."

While true, your identity may take a real hit. That's because for years, your job title, salary and expertise quietly told you who you were. And, while stepping away can feel liberating at first, one morning you wake up and realize you miss the version of yourself that people turned to for answers. Retirement can trigger a quiet grief over lost purpose and social connection, according to a study published on PubMed. Phasing into retirement or going back to work, full- or part-time, can help reclaim a sense of self without sliding into a funk that hits some retirees hard.

But retirement is rarely simple and can involve a mix of fear, excitement and rethinking your future. Then there's the very real concern about workplace "ageism," a type of discrimination based on a person's age. Will younger hiring managers see your experience as an asset, or will you be seen as overqualified and disconnected? Your confidence can also take a hit when you realize you might need to learn new tech and platforms or fit into an entirely different work culture.

What can often be even more unsettling is the internal tug-of-war: Do you still have what it takes? Are you too old to start over, and will you regret not just staying retired?

Studies on midlife and later-life career changes show that people who leap often end up happier and less stressed, and even report a renewed sense of purpose. One older study found 90% of career changers over 40 felt more successful and content afterward. In fact, experts overwhelmingly agree that when the work aligns with your skills or values, it boosts mental sharpness and provides social connection and structure that help deter cognitive decline.

The practical side mixed with the mental

Some people "unretire" into bridge roles — temporary jobs taken to transition between careers or to fill a gap — such as consulting gigs, mentoring, or part-time positions. Others might take bolder steps. For example, the former corporate executive who becomes a community college instructor, the retired nurse who contracts to help families navigate long-term care, or the engineer who teaches workshops via YouTube.

What they all have in common is intentionality — deciding to reset a career thoughtfully and on purpose, rather than reacting to outside pressure. Although unretiring can be a reaction to boredom or a way to pay the bills, most often a successful reset simply answers the question, "What matters to me now?" What kind of contribution still feels meaningful?

Of course, not every late-career reset goes smoothly. Sometimes you find yourself back in a toxic environment, or you struggle with younger team dynamics. All the extra stress can make you wonder if returning to work was the right call.

But employers are finally starting to wake up. In today’s tight labor market, more companies are dropping the “overqualified” label. Boomers and late Gen Xers bring something valuable to the table, like institutional knowledge, being calm under pressure and the kind of mentoring younger teams sometimes need. Flexible hours, part-time roles, and remote options are becoming more common as organizations recognize that experience really does matter.

So how can you mentally prepare for a late-career reset?

Start with honesty. Parsons has found that some entrepreneurs seeking a career reset reprioritize their goals from profit to purpose, with many entrepreneurs transitioning from a profit-driven role to a mission-driven role. "This allows them to easily align their skill sets with organizations driven by values." Second-act entrepreneurs often find it much more motivating to define their goals in line with their individual purpose. "Instead of scaling for maximum revenue, they build businesses or return to jobs that matter, either to targeted communities or to the world at large."

Talk to people who've done it. Update your skills through free or almost free online courses and volunteer projects to rebuild confidence. Small wins rebuild confidence fast. Rethink the narrative — you're not starting from zero; you're bringing decades of wisdom to the table.

Most importantly, permit yourself to try something new. A late-career reset doesn't have to be all-or-nothing. It can be a consulting gig, a passion project with pay, or even a freelance position that keeps you engaged without the full-time grind.

It's only the beginning

A late-career reset isn't always just about the paycheck. For many, it's about staying connected to people, to a purpose and to the part of yourself that still has something valuable to offer. With longer lifespans and shifting attitudes towards age, phasing back into the workplace or unretiring isn't a sign that you can’t hack retirement. It's simply a smart and healthy way to stay engaged.

"The reset might feel daunting at first, but overcoming these barriers requires a mindset shift away from the "starting from scratch," says Ilir Salihi, Founder at IncomeInsider. “Late-career resets most always work best when framed as redesigning your career around your strengths and longevity rather than as an attempt to catch up.”

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With a perky "Here you go!" it arrives in your inbox: A tonally awkward, super wordy, not-quite-right series of paragraphs from your coworker. You're furious, already fatigued and ready to rip someone's head off.

You just got "workslopped" — a new workplace dynamic where AI-generated content gets submitted by coworkers without adequate editing or quality control.

And while headlines around workslop have focused on the supposed productivity costs it's creating for businesses, the bigger issue is the erosion of trust happening between colleagues.

That's a dynamic that companies are completely unprepared to handle.

A breakdown of trust

The impact of workslop can be immediate: 50% of people who received workslop said they now viewed the sender as less creative, capable and reliable, according to research from BetterUp Labs and Stanford Social Media Lab.

Forty percent considered them less trustworthy. One-third said they were less likely to want to work with that person again.

These numbers are depressing. But instead of using them to actually fix the problem, everyone's just pointing fingers — at coworkers for sending it, employers for allowing it, AI companies for overselling it. The age-old blame game is having a tech-fueled resurgence.

None of this helps employees dealing in real time with workslop's ramifications. Blame prevents collaborative problem-solving, amplifies negative emotions and blocks opportunities to learn. Worse, it robs people of the chance to take meaningful action right now.

Don't wait for company policy

Instead of waiting for companies to solve this from the top down, employees can deal with it using something surprisingly simple: Conversation.

And no, not the "let's circle back and align on this" kind of conversation. Productive conversation isn't about casting blame; it's about exploring the context behind unmet expectations.

Rather than letting distrust fester, equipping ourselves with these skills builds the confidence to respectfully share concerns and the humility to recognize there's more to learn — all for the sake of getting work done together.

Workslop may be the tech-powered headache of the moment, but it's far from the only workplace friction point. Building skills for productive conversation doesn't just help with AI use — it creates a healthier culture overall.

How to manage workslop frustrations

Nobody wakes up excited about difficult conversations at work. But the alternative — silently seething while trust evaporates — is worse. Here's how to handle it without losing your mind or your cool:

Come prepared. Confronting someone about work quality is already uncomfortable; don't make it harder by winging it.

Before you say anything, map out the conversation on paper: Clarify your feelings, what you want to communicate and — critically — what you don't want to say if your frustration spikes. Without this prep, emotions can derail everything.

Lead with curiosity, not accusations. Nobody wants to hear "Did you even read what you sent me?" Create common ground by framing the conversation as collaborative: "Let's figure out how we both work so we can create something we're actually proud of."

Frame questions as opportunities for understanding, not gotchas. And don't assume AI was involved — ask first. You might be wrong, and starting with an accusation kills the conversation before it starts.

Ask what actually happened. If your colleague did use AI, dig into the how and why to determine a path forward. What prompts did they use? Where in the process did they let AI run wild? This isn't an interrogation — these questions help everyone learn how to use AI more effectively.

But also ask about constraints: Did tight deadlines or competing priorities make them feel like they had to use AI as a producer rather than an assistant? These questions can surface workplace issues that extend far beyond AI itself.

Here's the kicker: When you choose curiosity over judgment, you're not just giving your colleague the benefit of the doubt — you're proving you're trustworthy. It's easy to declare someone else unreliable, rather than be reliable ourselves.

Every honest conversation about AI use is the harder choice, and colleagues notice. The cost of avoiding these conversations is steep: Workers may increasingly withdraw from collaboration altogether.

The payoff

Here's what most people miss: Employees have more power in this moment than they realize. While companies scramble to create AI policies, colleagues can act now by choosing conversation over blame.

These conversations don't just solve your immediate problem — they generate the insights that inform better company-wide policy.

Don't keep what you learn to yourself. Share it with your wider organization. Document what works and what doesn't. This isn't about waiting for the perfect company directive; it's about recognizing that the skills to work together effectively are already within reach.

You're not just fixing individual frustrations — you're building the organizational knowledge that shapes how AI gets used everywhere.

Teams that can talk openly about what's working, address disappointments without throwing blame grenades, and learn from each other's experiments won't just survive workslop. They'll build cultures that can thrive when everything is changing.

AI doesn't have to be one more reason we turn against each other. Handled right — through curiosity and real conversation — we can transform inbox rage into something better: Genuine human collaboration. No algorithm required.

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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.

Question: At 54, we're young grandparents. My wife wants to start a college fund for our grandson, but I think we have to focus on funding our retirement. We've already saved $1.8 million. Who is right?

Answer: As of 2022, the most recent year for which data are available, the average retirement savings balance among 54-year-olds was about $313,000, per the Federal Reserve. If you're 54 years old with $1.8 million saved for retirement, you're clearly in a strong position compared to the typical person your age.

Just because you've amassed a $1.8 million fortune by age 54 doesn't mean your work is done, though. If you're planning to stay in the labor force for another decade or longer, you have a prime opportunity to add to your savings and buy yourself even more long-term financial security.

What if that's your plan, but your wife would rather focus on making contributions to a college fund for your grandson? It's clearly a kind and generous thing to do. But it's important to strike the right balance so that a desire to help your grandson doesn't put your retirement at risk.

Your nest egg needs to take priority

Saving for retirement and funding a college account for a grandchild are both excellent goals. But Eric Croak, CFP and President at Croak Capital, says contributing to a retirement account in the coming years should be your first priority.

"Retirement contributions come first. Period," Croak insists. "Retirement has to come first because there are no scholarships or loans for being old and poor."

John Madison, CPA and personal financial counselor at Dayspring Financial Ministry, agrees.

"As a young grandparent myself, I appreciate the desire to help your precious grandchildren get a head start on college funding," he says. "However, any contributions to a grandchild's 529 account should only be made after carefully considering your own retirement funding needs."

Madison says that in this situation, it pays to aim to contribute 15%-20% of your income toward retirement. But if there's money left over beyond that, then by all means, fund a 529 plan or another college account of your choice.

Croak agrees with this approach and says that even if prioritizing college savings doesn't make sense today, there may be opportunities to do so in the future.

"Life often has a way of providing more financial flexibility down the road, whether it’s an extra bonus year, an inheritance, or a fully paid-off house," he says. "If they maximize their retirement accounts first, they can always 'superfund' a 529 later."

Croak explains that 529 plan contributions can be front-loaded with five years of gift tax exclusions at one time.

"Knowing that possibility exists means there’s no need for over-funding now," he says.

Don't assume a 529 plan cuts off access to funds

If your grandson is fairly young, you may be eager to start saving for his education now, when that money still has years to grow. The danger of prioritizing a 529 plan is losing out on money you may end up needing for retirement if your portfolio doesn't grow as much as you'd like.

But Matt Hylland, financial planner and investment advisor at Arnold and Mote Wealth Management, says you may have more flexibility than expected.

"It is smart to be thinking about how much you can comfortably save today in a 529, because the tax-free compounding growth is so valuable," Hylland says. But, he continues, "Realize that 529 contributions are not irrevocable. If your retirement planning does not go to plan, you will have access to the money in the 529 account."

When a 529 plan is used for non-qualifying withdrawals, earnings are subject to income taxes and penalties, Hylland explains. However, your original contributions are not (though some states may claw back income tax deductions on contributions).

"Putting money in a 529 now will give decades for tax-free growth, potentially," Hylland says. "That value may greatly outweigh the small likelihood of needing an emergency withdrawal and paying taxes."

Choose your college account strategically

If you don't like the idea of tying up college funds in a 529 plan because you might need the money for retirement and don't want to face penalties, Hylland says there are other types of accounts you can consider utilizing instead.

"You could start a new brokerage account that is earmarked for future college goals," he says.

"This is not as tax-efficient as a 529. You will be subject to ongoing taxes on dividends and interest, along with capital gains. However, you will eliminate any income tax and penalties if you ultimately need the money for other uses."

Look at the big picture

While Madison agrees that retirement savings should take priority over helping a grandchild go to college, ultimately, his suggestion is to look at the total financial picture before deciding what to do. In addition to the $1.8 million already saved, Madison suggests factoring in other planned income streams, like Social Security and pensions.

From there, he says, you can run projections based on where you are today and your anticipated retirement spending needs.

"If this in-depth study shows they are on track for meeting their retirement income needs, easing up on additional retirement contributions to instead fund a 529 would be perfectly reasonable," he says.

Your projected retirement age should also factor into the decision. Although some people end up having to retire sooner than planned, a $1.8 million nest egg left untouched for 13 years could grow to $3.8 million at a somewhat conservative 6% annual return.

If all goes according to plan, you may end up with more than enough retirement savings even if you contribute minimally to an IRA or 401(k) in the coming years. So while it's good to keep funding those accounts to build in a buffer for a forced early retirement, a slower-than-average market, or other suboptimal scenarios, after doing a financial deep dive, you may find that you have more leeway to fund that college account than you thought.

Do you have a tricky money situation? We want to hear about it for an upcoming advice column. We're interested in retirement-related financial dilemmas, especially those that impact relationships with partners, friends and family. You will remain anonymous. Submit your question to KipAdvice@futurenet.com. Not all questions will be published.

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