Two of the three main equity indexes opened lower on Wednesday as escalation of the war in the Middle East cast a "risk-off" pall on markets. Investors, traders and speculators eased back into "risk-on" names as the trading session evolved, with focus on the first two Magnificent 7 revelations of the earnings season. Midday momentum ebbed, though, and all three indexes closed lower.

"From this point forward," President Donald Trump posted on Truth Social before the opening bell, "any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran."

The front-month West Texas Intermediate crude oil futures contract was up another 2.8% to $86.66 per barrel. WTI has risen 29.3% since hitting an intraday "ceasefire" low of $67.04 on July 2. Crude oil closed at $67.02 on February 27, the day before the war in the Middle East began.

The 2-year Treasury yield hit another new 52-week high on the way to closing at 4.304% vs 4.261% on Tuesday, and the 10-year yield was up to 4.659% from 4.628%. As Bloomberg calculates, the 30-year yield, which ticked up to 5.149% from 5.131%, has now been above 5% for more days in 2026 than in any other year since 2007.

Technology opened lower a day after a big bounce led by semiconductor stocks including Micron Technology (MU, -1.2%) and SK Hynix (SKHY, -3.9%) before rallying through midday. At the same time, Nvidia (NVDA, +2.3%) posted the biggest gain among Dow Jones stocks.

By the closing bell, the tech-heavy Nasdaq Composite was down 0.6% at 25,690, the broad-based S&P 500 was off 0.1% at 7,498, and the blue-chip Dow Jones Industrial Average had ceded six points, or 0.01%, to 52,218.

"This volatility is due primarily due to rising interest rates driven by the escalating conflict in Iran and rising energy prices," writes Louis Navellier of Navellier & Associates.

What you need to know about Alphabet earnings

Alphabet (GOOGL, -1.5%), which replaced Verizon Communications (VZ, +1.1%) in the Dow on June 29, posted earnings for the first time as a member of the 30-stock index after today's closing bell.

Electric vehicle maker Tesla (TSLA, -1.3%) and the Google parent are the first two of the Magnificent 7 stocks to report this season.

The big number to track here is second-quarter capital expenditures. Alphabet said it would spend $180 billion to $190 billion this year to build out its artificial intelligence (AI) infrastructure.

According to FactSet, Wall Street forecast capex of $45.1 billion for the three months through June 30, an estimated increase of 101.3% from the $22.4 billion Alphabet laid out a year ago, and a full-year run rate of $180.4 billion.

How GOOGL is trading right now is probably a function of where its second-quarter capex came in relative to its guidance and Wall Street's estimate, as well as whether management has revised its outlook.

Constellation has the power

Energy stocks, including Chevron (CVX, +1.0%) and Exxon Mobil (XOM, +1.8%), were boosted again by crude oil's rise. CVX was up 12.9% and XOM 10.7% from July 2 through July 21 vs a gain of 0.4% for the S&P 500.

The vertically integrated supermajors, with upstream, midstream and downstream exposure, will update the market on how the energy shock is affecting their operations before the opening bell next Friday, July 31.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

Utility stocks, well positioned to serve power-hungry hyperscalers but also relatively stable vs AI stocks, were tops among the 11 market sectors recognized by S&P Global Market Intelligence.

Constellation Energy (CEG, +4.8%), as Morgan Stanley analyst David Arcaro noted when he picked up coverage of the sector leader in March, is also getting a lift from the biggest carbon-free nuclear generation capacity in the U.S.

Indeed, Constellation's 21 reactors across 12 facilities in Illinois, New York, Pennsylvania, Maryland, New Jersey and Texas can power a lot of data centers.

Arcaro recently reiterated his Overweight (Buy) rating on CEG and raised his 12-month target price from $364 to $366. Constellation Energy is scheduled to release its second-quarter earnings report on Thursday, August 6.

Meanwhile, according to The Wall Street Journal, President Trump has approved a 30-year agreement to provide Saudi Arabia with a civilian nuclear power program "estimated to be worth tens of billions of dollars."

Related content

• Earnings Calendar and Analysis for This Week
• Vanguard ETFs vs Mutual Funds: Which Are Better Investments?
• How to Invest in the Nuclear Revolution

Fidelity is an investment-fund mainstay for buy-and-holders, and several of its products are tailor-made for waiting out market storms.

This firm built its name on the back of exceptional portfolio managers. In more recent years, though, it's broadened its appeal. Yes, Fidelity still is home to elite stock- and bond-pickers. But we can also get plain-vanilla index exposure as well as some cheekier "smart beta" strategies.

And we can get them for a song. Not only do many Fidelity funds boast fees that are below their category average, but they have low nominal purchase requirements, too. Like with all other exchange-traded funds, Fidelity ETFs can be purchased for the price of a share; however, most Fidelity mutual funds have absolutely no purchase minimum, meaning you can typically get started for as little as a buck.

That means Fidelity's defensive funds are some of the most accessible products you'll come across.

How we chose the safest Fidelity funds

To find the safest Fidelity ETFs and mutual funds for a volatile market, we looked for those that represent some of the most useful defensive sectors and strategies, including those that contain the best dividend stocks or the best healthcare stocks. We also targeted funds with relatively low fees.

Many (but not all) defensive funds involve a simple tradeoff for their low volatility: better performance during downturns, but less robust returns during upswings.

For that reason, defensive funds don't make for great long-term core allocations. They're better used as "satellite" holdings to augment your portfolio, or if you're more active, as shorter-term positions to ditch once markets normalize.

Data is as of July 12. Dividend yields represent the trailing 12-month yield, a standard measure for equity funds.

Fidelity Low Volatility Factor ETF

• Type: Low-volatility equity
• Assets under management: $1.4 billion
• Dividend yield: 1.4%
• Expenses: 0.15%, or $15 annually for every $10,000 invested

The most obvious Fidelity fund to battle volatility is the one that says it right in the name.

The Fidelity Low Volatility Factor ETF (FDLO) tracks an index that owns large- and mid-cap stocks that are ranked based on three different measures of volatility: return volatility, earnings volatility and beta. Scores are adjusted based on market cap, and the stocks with the highest scores within each sector are eligible for inclusion.

However, FDLO uses the same sector weights as the broader market. Right now, for instance, this index fund is heavily weighted in technology stocks, financial stocks and communication services stocks – not exactly a who’s who of stability. Heck, its top holdings are S&P 500 mainstays Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT).

But up and down the portfolio, you'll see higher weights in less-volatile companies from those sectors, and an absence of certain explosive names. That shines through in a beta of 0.7 that suggests FDLO is 30% less volatile than the broader market, and shallower losses during downturns.

The flipside is the tradeoff you typically must accept in exchange for lower volatility: lesser returns over the long term. FDLO doesn't climb nearly as aggressively when the market is climbing, which is what the market spends the majority of its time doing.

All that means is Fidelity Low Volatility Factor ETF (and other low-volatility ETFs) probably shouldn’t be the core of your portfolio. But if you’re looking to allocate some of your money to an investment whose downside isn’t so severe, FDLO fits the bill while allowing you to enjoy some market upside when things aren’t so chaotic.

Learn more about FDLO at the Fidelity provider site.

Fidelity MSCI Consumer Staples Index ETF

• Type: Sector (Consumer staples)
• Assets under management: $1.4 billion
• Dividend yield: 2.2%
• Expenses: 0.084%

The safety appeal of consumer staples stocks is pretty straightforward: When money's tight, you'll cut back on a lot of things—concert tickets, new sneakers, a Taco Bell "Fourthmeal"—before you'll cut back on groceries, toothpaste and toilet paper. That makes their businesses resilient against the pressures of a soft economy.

The flip side is, consumer staples companies aren't exactly fonts of growth. If you get a promotion, you're not going to start buying twice as much Charmin or stock up on Listerine, so there's only so much boost these companies can get from economic boom times. So they often entice shareholders with generous dividends instead, and that income provides an additional element of stability—one that's particularly attractive during periods of stock-market volatility.

Enter the Fidelity MSCI Consumer Staples Index ETF (FSTA).

We tend to think of FSTA in contrast to the top dog among the sector's funds: the State Street Consumer Staples Select Sector SPDR ETF (XLP). XLP owns the S&P 500's consumer staples companies, which comes out to about 35 predominantly large- and mid-cap stocks.

Fidelity's fund tracks the consumer staples subset of a larger stock market index, resulting in a much broader selection of almost 100 names and more exposure to smaller companies in the space. But interestingly, FSTA also has higher concentrations of assets in mega caps like Walmart (WMT) and Costco (COST) compared to XLP.

In addition to stores, FSTA also holds the product producers you’d expect: Procter & Gamble (PG), Coca-Cola (KO), Mondelez (MDLZ) and other names that feature prominently in your pantry, laundry room or bathroom.

You'll also find companies such as Marlboro parent Altria (MO) and alcohol giant Constellation Brands (STZ). As we pointed out when discussing a similar defensive Vanguard fund, "While you might not consider cigarettes and alcohol to be 'necessities,' people are just as loath to cut back on them as they are other staples."

Going back to XLP comparisons, FSTA is a hair more expensive (XLP charges 0.08%) and tends to yield a little less by virtue of holding somewhat growthier small caps. Still, historically, it's been a decent source of defense during market downturns, and it's outperformed State Street’s fund over most significant timespans.

Learn more about FSTA at the Fidelity provider site.

Fidelity Select Telecom and Utilities Fund

• Type: Multisector (Communication services and utilities)
• Assets under management: $1.4 billion
• Dividend yield: 2.1%
• Expenses: 0.68%

The aforementioned logic also applies to the utilities sector. You'll cut back on virtually any expense to keep from having to shut off your electricity, heating gas or water. That's why investors typically look toward utility ETFs for defense, too.

But if you really think about what modern-day Americans can or can’t live without, internet and phone service would also be extremely high up the list. That's the thinking behind the Fidelity Select Telecom and Utilities Fund (FIUIX).

Pranay Kirpalani and Alex Boyajian have put together a roughly 50-holding portfolio that’s largely made up of utilities like NextEra Energy (NEE) and Entergy (ETR), but also holds a handful of telecoms like Verizon Communications (VZ) and AT&T (T).

Just like with consumer staples, utes and telcos don't offer much in the way of growth, but they're stable and throw off above-average levels of dividend income. That makes them a good source of ballast in choppy waters.

Learn more about FIUIX at the Fidelity provider site.

Fidelity Real Estate Income Fund

• Type: Allocation
• Assets under management: $4.1 billion
• SEC yield: 5.0%*
• Expenses: 0.66%

One could make an argument for real estate as a hedge against market volatility. Physical real estate has extremely low correlation to the public markets, it's less volatile than equities and it provides a high level of income.

But some of that case falls apart when we're talking about real estate investment trusts (REITs), which also deliver substantial dividends but are more correlated to stocks and plenty volatile by comparison. Thus, traditional REIT sector funds aren't exactly the best way to fight off volatility.

Fortunately, Fidelity Real Estate Income Fund (FRIFX) isn't a traditional REIT sector fund.

FRIFX manager Bill Maclay operates what in reality is an "allocation" strategy, which means it holds more than one asset. Yes, it holds equity in some of the biggest and best REITs on the market, such as American Tower (AMT) and Welltower (WELL). But it also holds investment-grade and high-yield bonds, preferred stocks, even mortgage-backed securities. In fact, it's mostly fixed income—common shares account for only about 20% of assets.

It's certainly one of the best Fidelity funds for a volatile market, boasting far less wiggle and much more yield than most REIT-equity-only products out there. That's to be expected. What's more surprising is that despite FRIFX's debt-heavy makeup, it's been surprisingly competitive with traditional REIT funds over the long run.

Learn more about FRIFX at the Fidelity provider site.

* SEC yield reflects the interest earned for the most recent 30-day period after deducting fund expenses. SEC yield is a standard measure for bond funds.

Fidelity Low Duration Bond Factor ETF

• Type: Ultrashort bond
• Assets under management: $1.9 billion
• Dividend yield: 4.1%
• Expenses: 0.15%

Bonds generally experience far less price fluctuation than the broader equity markets and have low correlation to stocks. Thus, many Fidelity fixed-income products are also going to be some of the best Fidelity funds to own in a volatile market.

Still, some bond funds are steadier than others.

How volatile a bond fund is likely to be is strongly tied to its duration. Rather than reinventing the wheel, I’ll just hand it over to Kiplinger Personal Finance Senior Associate Editor David Milstead:

"The longer the term of the bond, the more sensitive its price is to interest rate moves. The measurement of a bond's sensitivity to interest rate moves is called duration. The number is an estimate, typically expressed in years, of how long it will take a bond investor to get paid back. A longer duration means the bond's price will move more when interest rates move. A duration of 6, for example, implies that if interest rates rise by one percentage point, the price of a bond will fall roughly 6%; the price will rise by a like amount if rates fall one point."

In other words, the lower the duration, the lower the interest-rate (and overall) risk.

It's pretty obvious, then, what Fidelity Low Duration Bond Factor ETF (FLDR) has to offer. This fund tries to own U.S. investment-grade floating-rate notes and U.S. Treasuries with a duration of 1 year or less. Right now, the portfolio is split roughly 85/15 between corporates and U.S. government debt, and its duration is 0.85.

How calm and collected is FLDR? Sometimes pictures tell a better story than words.

First up is a five-year chart showing the S&P 500; the iShares Core US Aggregate Bond ETF (AGG), a bond fund that trades a ubiquitous broad-bond index; and Fidelity Low Duration Bond Factor ETF.

And to get a better picture of just how smooth FLDR is compared to even other bonds, here’s a look at just FLDR and AGG.

Really helping Fidelity's fund over the past few years is a relatively high yield for very short-term bonds. The ETF currently pays north of 4%.

Learn more about FLDR at the Fidelity provider site.

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Your will dictates who inherits your real estate, but it can't protect your kids from a ticking tax time-bomb or a landlord headache they don't want.

If your heirs have no interest in managing property, discover how smart investors are using Delaware Statutory Trusts (DSTs) to trade active management for passive income today, while permanently wiping out decades of deferred capital gains for the next generation.

Gary owns a warehouse outside Katy, Texas, that he bought in 2003 for $380,000. It's worth $1.9 million today. He's done two 1031 exchanges along the way, which means his taxable basis is somewhere around $210,000. This means if he ever sells without a plan, he's staring down a tax bill that would make a grown man cry.

Gary has a will, which says who gets the warehouse when Gary dies.

What it doesn't say — what Gary has never once discussed with his kids — is what happens to that $1.69 million in embedded gain sitting inside that warehouse like a ticking clock.

His son Michael, 38, is a project manager in Austin, Texas. He doesn't want to be a landlord in Katy, two hours from where he lives.

Gary's plan, loosely, is to "figure it out eventually." That's not a plan.

What rarely comes up at the estate planning appointment

When you die holding an appreciated asset — a rental house, a commercial building, a warehouse outside Katy — your heirs receive what's called a stepped-up cost basis. The IRS resets the taxable basis to the fair market value of the property on the date of your death.

That means all that embedded gain — every dollar of appreciation, every dollar of deferred 1031 exchange gain you spent decades carefully rolling forward — disappears. The IRS never collects it.

Gary's $1.69 million in deferred gain? Gone. Michael inherits the warehouse with a basis of $1.9 million. If he sells it next week for $1.9 million, he owes nothing.

That's one of the most powerful wealth-transfer mechanisms in the entire United States tax code, and the majority of real estate investors I talk to have never had anyone explain it to them in plain language.

Why a DST matters more than most people realize

If Gary wants to take advantage of the step-up in basis strategy to hold the asset, let it transfer to Michael at death and eliminate the gain forever, he has a problem.

Michael doesn't want the warehouse. Gary is 67 and tired of managing the warehouse. He'd like some passive income, fewer headaches and maybe a trip to Colorado that doesn't get interrupted by an HVAC call.

This is exactly the situation a Delaware statutory trust is designed to solve. Gary can do a 1031 exchange out of the warehouse and into a DST, a fractional interest in a professionally managed, institutional-grade property.

• No tenants
• No maintenance calls
• No lease negotiations

His 1031 deferral is preserved. His deferred gain stays deferred. He collects passive income distributions.

When Gary dies, Michael inherits Gary's interest in the DST at the stepped-up fair market value. The gain that Gary spent 22 years rolling forward through two 1031 exchanges? Eliminated permanently.

Michael doesn't have to manage anything. He doesn't have to drive to Katy. He doesn't have to keep the DST interest if he doesn't want it — he can liquidate it with a dramatically reduced tax burden thanks to the step-up.

That is not a loophole. That's current tax law, working exactly as written — for exactly the kind of family wealth transfer it was designed to support.

Have you had this conversation with your kids?

I ask that sincerely, because in my experience, most people haven't.

We tell our kids where the life insurance documents are. We tell them which attorney drew up the will. We tell them whether we want to be buried or cremated.

We don't sit down and say: "Here's the building I own, here's what it's worth, here's what I owe in deferred taxes if we handle this wrong, and here's the strategy that makes all of that go away when I'm gone."

That conversation can be worth hundreds of thousands of dollars to your family. In some cases, it's worth more than the will itself.

Your kids don't need to become real estate investors. They don't need to understand 1031 exchanges at a technical level. They just need to know that a plan exists and that the plan was built with this outcome in mind.

One more thing worth knowing

For investors who want to take the strategy even further, there's a path beyond the DST worth understanding: the 721 exchange, also known as an UPREIT conversion.

At the point when a DST sponsor is ready to exit — typically after five to 10 years — investors sometimes have the option to convert their DST interest into operating partnership units in a real estate investment trust (REIT). That conversion is tax-deferred. The investor now holds REIT units rather than a DST interest, offering even greater liquidity and diversification.

When death occurs while holding those REIT units? Same step-up in basis. Same elimination of the deferred gain.

It's a longer road, and it's not the right fit for every investor. But for those building a serious, multi-decade wealth transfer strategy around appreciated real estate, the DST-to-UPREIT path is one of the most elegant tools available.

Gary, for the record, has an appointment scheduled. He's bringing Michael.

They're going to look at what a 1031 exchange into a DST means for their family: The income, the timeline, the step-up, all of it. Michael is going to leave that meeting understanding more about his father's financial legacy than he ever expected to, and Gary is going to leave with something that feels a lot like a real plan.

The warehouse in Katy will probably be someone else's problem very soon, but in the best possible way.

If you own appreciated real estate and haven't had this conversation with your family, or with an adviser who understands how DSTs, 1031 exchanges and estate planning fit together, I'd encourage you not to wait.

The step-up in basis doesn't care how organized your will is. It cares only whether the right structure is in place when the time comes.

If you'd like to go deeper on how this works, I invite you to watch our DST Masterclass — it's the clearest walkthrough I know of for exactly this kind of planning. Or if you're ready to talk through your specific situation, you can schedule a strategy conversation directly at Provident1031.com.

Related Content

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• Your Stock Portfolio Just Got Hammered: Here's a Tax-Smart Way to Recover
• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• I'm a Real Estate Investing Pro: This Is How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• How to Use DSTs and 1031 Exchanges for Diversification

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

For decades, retirement planning has been seen through the lens of one question: How much do I need to save? But placing too much focus on a single number is leaving many Americans with planning gaps.

A recent study from Lincoln Financial found most Americans are unprepared for key retirement scenarios including generating income, managing healthcare costs, protecting loved ones and passing on assets. Most people aren't failing to save, but they are leaving key expenses in retirement unaddressed.

That's why investors need to start thinking about retirement differently. Not as a single number you need to reach to be comfortable, but as a "retirement stack" designed to meet your specific needs.

A retirement stack is simply financial planning built in layers. Investments are one layer. Additional layers can include plans for income, protection and flexibility, all working together to help manage real-world risks.

And those risks are getting harder to ignore.

Market swings, inflation and rising healthcare costs are prompting practical questions such as:

• What happens if the market drops right when I need income?
• How do I pay for care later in life?
• Will I have enough money if I live longer than expected?

Successful retirement planning shouldn't rely on one answer but multiple layers that prepare for several scenarios.

Here are four considerations when determining your own retirement stack.

1. Income you can rely on beyond systematic withdrawals

Most retirement plans focus on accumulating assets. But once retirement begins, the conversation shifts from growth to income.

Social Security and pensions (where available) provide a foundation, but they often don't cover all expenses. That leaves many retirees relying on withdrawals from investment accounts, which can be risky during market downturns.

This is where protected income sources, including certain types of annuities, can play a role. By creating a predictable income stream, they can help reduce the pressure to sell assets when markets are down.

2. A plan for healthcare and long-term care costs

Healthcare remains one of the largest — and most underestimated — expenses in retirement. Research from Fidelity suggests a 65-year-old retiring today could spend $165,000 on healthcare in retirement.

While many people plan for premiums and routine medical costs, fewer have a strategy to pay for long-term care. Without sufficient planning for these costs, fees are often paid out of pocket, which can quickly erode savings.

Solutions in this space, such as hybrid life insurance and long-term care coverage, can play a role in a well-rounded plan by helping you prepare for potential care needs while maintaining flexibility in how assets are used.

The sooner this type of plan is put in place, the more cost-effective it tends to be. Starting earlier typically means lower costs and less money required upfront, making it easier to build coverage over time.

3. Flexibility for a longer retirement

Retirement isn't a fixed period. People are living longer and expecting more from those years, so the challenge is planning to support a lifestyle that could last 20 to 30 years or more, making flexibility just as important as growth.

Investment portfolios are expected to serve a variety of needs, including generating growth, providing income and acting as a safety net during downturns. When markets are volatile, that can put pressure on the portfolio and create stress for investors.

A stronger approach is to define roles across different investment vehicles. Growth assets can stay focused on long-term performance, while other parts of the "stack" are positioned to provide stability or access to cash when needed.

Having the right mix of solutions in place can create peace of mind, especially during uncertain periods. It can also help investors stay committed to their strategy, rather than reacting to short-term market swings and making decisions at the wrong time.

Having at least one source of funds that isn't tied directly to market performance, such as guaranteed income or protection-focused solutions, can make it easier to stick with the plan when it matters most.

4. A clear approach to legacy and wealth transfer

Lastly, complete retirement planning looks beyond retirement itself.

Some people want to leave assets to family or other beneficiaries, so having a clear strategy for how that transfer will happen is an important part of a holistic retirement strategy.

Estate planning basics, such as creating a trust, beneficiary designations and keeping documents up-to-date, play an important role. In some cases, life insurance can also be part of the overall strategy, helping provide liquidity or ensure that assets are passed on in a predictable way.

Like the rest of the stack, this isn't a separate decision. It's part of how the pieces fit together.

Putting the stack together

The idea of a retirement stack isn't about making planning more complicated. It's about creating a strategy that more completely ties specific investment strategies to specific needs.

Market-driven investments remain an important part of any strategy, but on their own, they can leave important questions unanswered.

A well-built retirement stack brings together:

• Income for day-to-day needs
• Planning for healthcare and unexpected costs
• Flexibility to adapt over time
• Confidence to meet defined outcomes regardless of market conditions

It won't eliminate uncertainty, but it can help reduce the chances of having to make difficult financial decisions at the wrong time.

And for many investors, that's what retirement planning is about.

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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.

How has investing become easier and harder at the same time?

On one hand, it's never been easier to invest. You can select from a wide variety of products with a few clicks on an app, often with no commissions or account minimums.

On the other, it's never been harder to invest. A barrage of ads often blurring the lines between investing and gambling makes it easier to make emotional decisions and harder to evaluate relevant features to make confident decisions.

One effective way to address this confusion is through greater transparency — and the best place to start is by understanding how most brokerages make money.

Incentives and costs

"Show me the incentive, and I'll show you the outcome," is one of my favorite quotes from the late, great, Charlie Munger, former partner of Warren Buffett.

When it comes types of investing costs, brokerages have a strong incentive to keep explicit costs as low and visible as possible and have a strong incentive to keep opaque costs high, as they're harder to understand and compare.

Many brokerages promote "zero trading commissions" for many types of trades — an explicit cost that's easy to understand and compare.

However, most brokerages make money on trades by selling them to middlemen in return for payment for order flow (PFOF) — an opaque cost in which the brokerage pockets a slice of your proceeds every time you trade without it explicitly showing up on your trade confirmation.

Moreover, many brokerages have an incentive to get you to trade riskier securities that expire, on which they typically receive higher PFOF rates.

According to Bloomberg Intelligence, PFOF generated a record $4.8 billion across the brokerage industry in 2025. While more client trades mean more money for most brokerages, excessive trading has been shown to be hazardous to your wealth.

Transparency is here, more is on the way

Good transparency is practical. It makes key information — including yields, fees, and tradeoffs — easy to find, easy to understand and easy to compare.

For example, some brokerages make it easy to see the yield you earn in your brokerage settlement account by displaying it alongside your settlement balance online or in your app. Others make it more difficult to find, forcing you to search for it on other pages.

If your settlement account yield is not easy to find, it might indicate that the brokerage is retaining a larger portion of the yield and crediting a smaller amount to your account.

Additionally, some brokerages encourage you to trade by making investing feel like a game — with flashing prices and confetti celebrations. But investors who let emotions drive their trading tend to have worse outcomes than those with more discipline. Emotions tend to run higher when the market is volatile.

Other brokerages, such as Vanguard Brokerage Services, serve up timely education when you're placing a trade in volatile markets that reminds you to pause and consider if the trading decision aligns with your long-term goals.

Solving the paradox

Along with the importance of brokerages building transparency into their platforms, Vanguard advocated for an SEC rule amendment that "will empower retail investors to make more informed decisions by providing consistent, comparable disclosures about the execution quality provided by retail broker-dealers."

The first reports will be published no later than September 30, 2026. Similar to how the FDA requires a standardized nutrition facts label for most prepared foods, these new reports will be standardized to allow investors to facilitate comparisons across brokerages.

How can brokerages make it easier for investors to make decisions aligned with their long-term financial goals?

They must provide clearer, more transparent information.

It isn't just a feature of good investing platforms, but a responsibility across the industry to support better long-term financial outcomes.

Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.

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• Adviser, Broker or Insurance Agent: Which Should You Trust With Your Money?

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.

"Nvidia, Nvidia, Nvidia. SpaceX, SpaceX, SpaceX. But of course, Nvidia. Micron, sure, and let's Apple too. But when it comes right down to it, Nvidia, SpaceX, Meta, Alphabet, SpaceX, Nvidia, Alphabet and Nvidia."

If that's what it feels like to turn on CNBC, check out your favorite investing website or scroll through your financial social feeds … I agree. I've spent more than a decade in financial media, and I'll be the first to admit that we don't just talk about the stocks people follow — we drown them in related content.

And at the cost of ignoring some duller but still plenty productive stocks.

Well, today, I'm setting aside a little bandwidth for the sleepers, the yawners, the ho-hum companies that have largely trudged along, printing profits and padding portfolio gains.

How we found our five "sleeper" blue-chip stock picks

You won't read about high-flying semiconductor stocks or the hottest upcoming initial public offerings (IPOs) here.

Instead, I'm going to run down a group of relatively mundane blue chip stocks that don't generate many headlines, but that have two qualities we shouldn't ignore:

• They've managed to outperform the S&P 500 over the past five years on a total-return basis.
• They're highly rated by Wall Street's analyst community.

I put together a simple quality screen — S&P 500 components that are worth at least $50 billion by market capitalization, have outdone the index over the past half-decade, have at least 10 covering analysts and have an average broker recommendation of 2.5 or lower within the ratings scale established by S&P Global Market Intelligence, implying they're a consensus Buy.

At that point, selection was largely subjective. I opted for higher-conviction Buy ratings. I ignored attention-grabbing sectors such as technology and communication services. I favored companies that, while occasionally well-known by consumers, rarely get financial media coverage outside of their quarterly earnings reports.

Data is as of July 20. Dividend yields represent the trailing 12-month yield, a standard measure for equity funds.

Motorola Solutions

• Sector: Information technology
• Market value: $68.2 billion
• Dividend yield: 1.2%
• Consensus rating: 1.64 (Buy)

Of course, the first sleeper pick is a tech stock. I'm not a reliable narrator. I've never claimed to be.

But all jokes aside, I'm making a point by highlighting Motorola Solutions (MSI), which is pretty humdrum compared to the chip and app names that largely define the modern-day technology sector.

When most people think of Motorola, they think of smartphones — Edge, Moto G, Razr and more. But that's Motorola Mobility, which has been a wholly owned subsidiary of Lenovo for more than a decade. Motorola Solutions was created three years earlier in a corporate split.

MSI's primary businesses are critical-communications land mobile radio (LMR) devices and networks (think emergency-personnel handheld radios); command-center technologies; and video security. Impressive technology? Sure. Does the media talk about it the same way it does large language models (LLMs) and quantum computing names? Nope.

Still, this is a $70 billion outfit with roots that go back nearly a century. It might not be an explosive grower, but it has out-returned the S&P 500 by several percentage points over the past 10 years and offers a modest dividend to boot.

The pros love the stock, too. MSI is currently covered by 14 analysts, a dozen of whom deem it a Buy. The remaining two calls are Holds; no one thinks it's a Sell. And they all believe Motorola will continue delivering decent bottom-line improvement, with long-term annual earnings-growth estimates sitting around 10% annually.

"Record demand for public safety communications, video security, and command center software should drive long-term [earnings per share] growth in the low double digits when taking into account organic growth, acquisitions and stock buybacks," say William Blair analysts, who rate the stock at Outperform (equivalent of Buy). "The EPS [compound annual growth rate] from 2017 through 2025 was 14%. We believe the annual stock return will at least match EPS growth."

Speaking of acquisitions, the company announced in early June a $1.5 billion acquisition of Israel-based counter-drone provider D-Fend Solutions, which complements its 2025 Silvus acquisition and gives it additional ammunition to pursue Defense Department contracts.

Eaton

• Sector: Industrials
• Market value: $158.4 billion
• Dividend yield: 1.1%
• Consensus rating: 1.63 (Buy)

Many names attached to the artificial intelligence (AI) trend have blown up in popularity (and stock price) over the past few years, so it's difficult to find AI-connected names that are flying relatively under the radar.

But Eaton (ETN), despite its success, still is far from a household name.

Eaton is a global intelligent power management company. On the AI front, ETN has partnered with companies such as Siemens Energy (SMERY) and — you guessed it — Nvidia (NVDA) to improve data center infrastructure. And in 2025, Eaton bought Resilient Power Systems, which makes solid-state transformer technology that may simplify the building of AI data centers.

But ETN's offerings go well beyond AI. The company offers power distribution, energy storage, backup power, electronic components, data and video cables, lighting and controls, utility and grid solutions, server racks and more to a variety of industries.

"This blue-chip industrial company is benefiting from megatrends, such as energy transition, electrification, digitalization, and infrastructure spending, that are driving growth in its end markets," says Argus Research analyst Kristina Ruggeri, who rates the industrial stock at Buy. "The company has been experiencing strong orders and record backlogs that should position it well to deliver EPS growth over the long term, driven by margin improvement and top-line growth."

Also worth noting is the company's June announcement that its Mobility Group would combine with automotive industrial firm Dana (DAN) in a Reverse Morris Trust, following which Eaton shareholders would own 50.1% of the combined entity.

"We view this ... announcement as a clear positive for ETN shareholders as it accelerates the company's plan to focus on its core higher growth/higher margin Electrical and Aerospace businesses," say BNP Paribas Equity Research senior analysts James Picariello and Andrew Buscaglia. The firm rates ETN at Outperform. "As we've discussed, exiting Mobility would help ETN create a more concentrated portfolio aligned with key megatrends in electrification, data centers and aerospace & defense."

All told, ETN enjoys 22 Buys against four Holds and just one Sell, according to S&P Global Market Intelligence. And the consensus view is for annual average earnings growth of 10% over the long term.

AutoZone

• Sector: Consumer discretionary
• Market value: $49.0billion
• Dividend yield: N/A
• Consensus rating: 1.48 (Strong Buy)

AutoZone (AZO) is a retailer and distributor of automotive replacement parts and accessories, boasting nearly 7,900 stores across all 50 U.S. states, the District of Columbia, Puerto Rico, Mexico and Brazil.

It's a name most everyone knows, but that few people have on the tip of their tongue, at least as stocks are concerned. It's a brick-and-mortar retailer that dishes out motor oil, brakes, batteries and car-washing goods — as mature a business as they come.

But while AZO might not enjoy much run time on CNBC, it's well respected among the research community. Currently, 23 analysts consider AutoZone shares to be a Buy, while the remaining four covering analysts call it a Hold. And while it's a mature business, the pros still see the retailer delivering 13% average annual long-term earnings growth.

That bullishness comes amid a rough spell for AutoZone. While the company has outperformed the S&P 500 over the trailing five-year period, the past year has seen AZO lose almost 20% of its value while the index has advanced by roughly as much. The latest setback stemmed from a weak fiscal third-quarter report announced in May.

"While AZO's Q3 results fell short of expectations following several quarters of underperformance, we believe today's selloff was overdone," says Morgan Stanley analyst Simeon Gutman (Overweight, equivalent of Buy). "We understand investors are increasingly questioning the credibility of the AZO story given uneven execution over the last three to four quarters; however, Q3 represented a step in the right direction from an earnings standpoint, with [earnings before interest and taxes] inflecting positively and the setup for further acceleration improving into Q4 and FY27."

Analysts believe near-term growth from new "megahubs" — larger locations that act as regional supply centers for retail stores and repair shops — and longer-term opportunity from international expansion.

"Expect U.S. megahub expansion and U.S. store growth to help offset transitory international softness," says Jefferies analyst Bret Jordan (Buy). "We continue to view [Mexico and Brazil] as attractive long-term total addressable market growers with significant market share opportunities for AZO. In the interim, we expect megahub to drive healthy domestic [do-it-for-me] share expansion while new stores entering the comp base likely add ~150 basis points to same-store growth."

Cardinal Health

• Sector: Healthcare
• Market value: $53.1 billion
• Dividend yield: 0.9%
• Consensus rating: 1.47 (Strong Buy)

Most water-cooler-worthy healthcare stories come from pharmaceuticals or biotech companies developing the latest breakthrough drugs, or medical device firms wizarding their way to technologies that change the way we recover and live.

Cardinal Health (CAH) isn't that.

This blue-chip healthcare stock is as behind-the-scenes as it gets, distributing pharmaceuticals, medical supplies, consumer products and data solutions to the vast majority of the nation's hospitals, pharmacies, clinical labs and ambulatory surgery centers.

These businesses don't exactly generate headlines, but they provide robust revenue diversification with plenty of opportunity for growth — in fact, CAH shares have delivered a total return of 360% over the past five years, crushing the healthcare sector and the broader market.

That performance has been driven by a long string of consecutive quarterly earnings beats, which stands at 15 following its fiscal Q3 reported in late April.

"Pharmaceutical and Specialty Solutions revenue grew 11% year-over-year to $56.1 billion, supported by branded and specialty pharmaceutical sales growth," notes Daniel Rich, an analyst for independent research firm CFRA, which rates the stock at Buy. "We also think free cash flow generation remains robust, as CAH raised FY26 guidance to a $3.5 billion midpoint from $3.25 billion previously."

That cash flow is especially important given Cardinal's status as a Dividend Aristocrat. CAH currently boasts 30 consecutive years of uninterrupted payout growth, most recently announcing a 1% uptick to 51.58 cents per share in early May.

Cardinal Health also sports a healthy bull camp of 15 Buys against three Holds and no Sells. As a group, they see CAH delivering 17% average annual earnings growth over the long term.

The TJX Companies

• Sector: Consumer discretionary
• Market value: $167.2 billion
• Dividend yield: 1.3%
• Consensus rating: 1.38 (Strong Buy)

The highest-rated of these "sleeper" blue chip stock picks is The TJX Companies (TJX).

Most people know this consumer discretionary stock for its TJ Maxx fashion retail locations, but it's also responsible for a host of other low-cost chains, including Marshalls department stores, furnishing and décor retailer HomeGoods, outdoors gear seller Sierra, and Canadian brands HomeSense and Winners. It also operates as TK Maxx in Europe and Australia.

Physical retail has generally been in a state of decline for years, and COVID finished off a number of brick-and-mortar retailers. But TJX continues to find demand for its steals and deals, which has driven shares to a market-beating 140% total return over the past five years and kept analysts optimistic about its ability to continue climbing.

"The off-price channel offers a very attractive value prop to (1) brands (efficient inventory management assistance), (2) landlords (stable & attractive foot traffic), and (3) shoppers (20%-60% off hot products in a differentiated treasure hunt experience)," says Truist Vice President Joseph Civello (Buy). "With its leading scale position, we believe TJX has access to the best product and convenient locations, which attracts the highest value traffic (creating a flywheel that further enhances their competitive edge).

"We believe this will continue to fuel its consistent algo with highly visible top/bottom-line growth in a vertical that we view as one of the most attractive in retail."

Civello is hardly alone. The Street has 19 Buy calls on TJX shares, versus a lone Hold and a single Sell. Long-term growth expectations aren't exactly electric, but at a 9% average annual clip, that's still respectable for a mature budget-store empire.

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Technology stocks took off on Tuesday, and crude oil prices did the same. Investors, traders and speculators are looking forward to imminent earnings announcements from two of the Magnificent 7, even as the U.S. and Iran are escalating the war in the Middle East.

At the closing bell, the tech-heavy Nasdaq Composite was up 1.3% at 25,837, the broad-based S&P 500 had added 0.9% at 7,509, and the blue-chip Dow Jones Industrial Average was higher by 0.7% at 52,224.

Front-month West Texas Intermediate crude oil futures rose 2.7% to $84.68 per barrel, and the 2-year Treasury yield ticked up to 4.266% from 4.215% on Monday.

The iShares Semiconductor ETF (SOXX, +5.5%) extended its gain on Monday into a full-blown rally on Tuesday, though the Roundhill Magnificent Seven ETF (MAGS, +0.01%) generated a more modest return.

"The market continues to look through the Middle East situation as transitory and is staying focused on strong earnings," Louis Navellier of Navellier & Associates observes. "The trend remains positive."

It's all about earnings

Google parent Alphabet (GOOGL, -1.4%) and electric vehicle maker Tesla (TSLA, +2.5%) are scheduled to report second-quarter earnings after the closing bell on Wednesday.

Much is riding on all of the Magnificent 7 stocks, Nvidia (NVDA, +2.0%) in particular. As FactSet analyst John Butters notes, the estimated year-over-year earnings growth rate for the group is 31.1%.

But there's a lot riding on earnings generally: The other 493 S&P 500 stocks are expected to post bottom-line growth of 22.8%, which would be their highest growth rate since the fourth quarter of 2021.

"In fact," Butters writes, "four of the five top contributors to earnings growth for the S&P 500 for Q2 2026 are not 'Magnificent 7' companies: Micron Technology (MU, +12.2%), Chevron (CVX, +0.7%), Exxon Mobil (XOM, +2.3%), and Broadcom (AVGO, +2.2%)."

Indeed, the leader of the AI revolution is the only Mag 7 stock that's also a top-five contributor to current earnings growth estimates. Nvidia posted fiscal 2027 first-quarter results in May and will report again on Wednesday, August 26.

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The energy stocks stand out, too, amid the bottleneck at the Strait of Hormuz. Chevron and Exxon Mobil are scheduled to report second-quarter results before the opening bell next Friday, July 31.

Micron and Broadcom revealed blowout results for their respective fiscal quarters in June. The semiconductor stocks are scheduled to report again in September.

3M looks good

3M (MMM) was No. 1 among the 30 Dow Jones stocks on Tuesday, rising as much as 10.7% to within $1.26 of its February 12 52-week high, after management reported expectations-beating results and raised its full-year guidance.

3M now sees earnings of $8.80 to $8.95 per share for 2026, up from a range of $8.50 to $8.70, with CEO Bill Brown citing "strong first-half performance and continued momentum."

The industrial stock generated a year-to-date total return of 0.3% through Monday vs 9.4% for the S&P 500, sagging in January after management shared lackluster initial guidance and trending lower through May.

Genuine Parts cuts some guidance

Genuine Parts (GPC, -2.7%) is one of the best stocks to buy for dependable dividend growth because of a 70-year history of raising its quarterly payout. Management of the automotive and industrial parts maker sustained that record in February with a 3.2% increase.

At the same time, though, the consumer discretionary stock said it was splitting into two publicly traded companies, "Global Automotive," which operates as the familiar NAPA retail front, and "Global Industrial," which works under the Motion banner.

The separation is costing more than management forecast, so Genuine Parts updated elements of its full-year forecast, most notably GAAP EPS. That estimate was revised from $6.10 to $6.60 to $5.90 to $6.40.

Management reaffirmed its adjusted EPS guidance range, $7.50 to $8, as well as its 3% to 5% revenue growth rate forecast. Still, that updated element shook the market.

It appears management understood the gravity of its decision and conducted a thorough review: "The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its outlook."

Genuine Parts hasn't defined a post-separation dividend policy, though details will likely be forthcoming following the forecast completion of the separation in the first quarter of 2027.

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Many people believe their tax bill will drop once they retire, and while that might be the case for some families, it's not a guarantee.

The thinking is logical. If you're no longer earning a paycheck, you should fall into a lower tax bracket, right? Not exactly.

Once they've left the workforce, retirees often start drawing income from multiple sources, such as Social Security, pensions and retirement accounts, all of which can be taxed.

A new set of tax considerations

For many retirees, a large portion of those retirement savings is also held in pretax accounts, which means withdrawals can be taxed as well. This can create a new set of tax considerations many retirees didn't need to deal with in their working years.

Without proper tax planning, or a clear understanding of how these income sources might be taxed, retirees could be surprised when the tax bill comes.

Although no one can predict future tax policy changes, taking time to plan ahead can give you a better understanding of how your income will be taxed under the current law. From there, you can make adjustments before retirement begins.

Estimating future income and understanding which tax bracket you'll likely fall into can help you evaluate strategies that might help reduce lifetime tax liability.

Where to start

Reviewing the balance between pretax, after-tax and tax-free accounts and determining whether certain tax strategies make sense for you is a great place to start.

If you find a majority of your retirement savings is in pretax accounts, future withdrawals might create a larger tax bill.

At the same time, converting everything into tax-free accounts isn't necessarily the right answer either.

The goal is to find the right balance between pretax, after-tax and tax-free assets so that income in retirement can be generated as tax-efficiently as possible.

A strategy that often comes up in retirement tax planning is a Roth conversion. This allows you to move money from a pretax retirement account into a Roth account by paying taxes at the time of the conversion.

Roth conversions aren't always the right decision for everyone. The more important question to consider is whether it makes sense based on your current income, expected retirement income and long-term tax strategy.

Retirement might be the end of your career, but that doesn't mean it's the end of financial planning.

Understanding how different sources of retirement income are taxed and taking time to develop a tax-efficient plan before you retire can help reduce tax burdens while giving you peace of mind and a sense of preparedness ahead of your next chapter.

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

One of the ways credit card companies, airlines and other businesses build loyalty and keep us coming back is through rewards points that can be applied to future purchases.

The terms and conditions for these loyalty points tend to be multiple pages, highly confusing and often disguise nasty surprises in language that even lawyers have difficulty making sense of. Several have been criticized as being unfair and little more than a bait-and-switch.

But what one company did to the widow of a loyal customer highlights a lack of care, compassion and common sense that others can learn from. We're not naming the company, as the situation could very well have been an outlier, but it's a useful lesson for management in what not to do.

An escape from the world of chronic kidney disease

Reader "Anna" described the love "Dallas" had for this particular company's products, starting when he was a child. "He loved (them) even more after we got married. Born with failing kidneys, he found it a helpful activity when he was undergoing dialysis treatments."

Anna said he spent his many loyalty points on products that made him so happy, and toward the final stages of his illness, they worked together on a project that would be the last one they finished together, right before he died.

"Today, I look at it with so much love. We knew each other since college and were married only three years. It was an honor being his wife."

What happened to his loyalty points?

Anna knew his loyalty points account number and tried to use the points that remained to buy a gift for her father-in-law, but the company refused the transaction, saying, "Points expire after 18 months, and we sent (the account owner) notice of the impending loss."

They did, indeed, send that notice to his email, after he died. "Due to his illness, I handled all of our financial affairs and never went into his email account," she explained.

She sent a polite email to customer service, explaining that her husband had died and that, given he was a lifelong loyalty club member, would the company please reconsider and allow her to use his remaining points. On its website, the company acknowledges that it will waive the expiration period with good cause.

Anyone with compassion would consider Anna's situation "good cause."

A cold and heartless response

Company representative "Pamela" emailed Anna: "Very sorry to hear of the loss of your husband, but we cannot take any actions on the account except on behalf of the account owner."

A friend of Anna referred her to me, and when I read that, I wondered what insensitive, heartless idiot would tell a widow that the company could deal only with her deceased husband? These are the types of blatant unfairness that motivate me.

I regularly reach out to the media contact personnel at large companies and ask them to please look into an issue. Now, suppose that you were the person I contacted about Anna's situation. Wouldn't you fact-check first, and then, knowing that expired points can be restored, wouldn't you do that for Anna? Of course you would.

But not this company's media rep. "Wendall" referred the matter to "Charles," in his department, who called me. We both looked at Dallas' obituary online, but instead of saying, "Sure, we need to make this right," Charles did the bureaucratic thing and sent the matter back to customer service.

Days went by, proving that Pamela, Wendall and Charles had to have been standing behind the door the day common sense was handed out.

Finally, Anna received an email — not a phone call, because clearly, these three people have a problem with kind human interaction — from "Bill" in customer service stating that she would receive a gift card for the value of her husband's points. A week later, it arrived. So at least they did that part right.

A business professor looks at the situation

I ran this by Lyle Sussman, professor emeritus in the College of Business at the University of Louisville and a friend of this column for many years. "Beav, this reminded me of my favorite example of customer service from hell. A few years ago, a bank manager required a thumbprint from a customer without arms."

"Requiring authorization from a dead person is like requesting a thumbprint from someone who has no hands. It's also the kind of Kafkaesque SOP (standard operating procedure) that sets the stage for social media backlash and a column by Dennis Beaver.

"This issue is a classic example of rigid SOP constraining common sense in customer service. The fact that a customer service manager finally did the right thing is a testament to someone in the chain of command saying something like, 'Enough's enough. Let's stop being stupid!'"

With some loyalty programs, there are ways to prolong the life of your reward points. I'll explain how to do this in a future story and show why companies just can't wait for customers to forfeit their rewards.

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.

Space exploration came to the world more than a decade after World War II ended. To begin with, two countries dominated the field: America under the auspices of NASA (National Aeronautics and Space Administration) and the Soviet Union's slew of space design bureaus. It got dubbed the Space Race.

Fast forward to now, and there's another space race, this time it's happening via private and public enterprise. That means you could profit from companies involved in the space sector by purchasing relevant stocks. But which ones?

Top of the headlines is Elon Musk's SpaceX (the Space Exploration Technologies Corp, ticker symbol: SPCX), which, as well as rocketry, includes data centers, artificial intelligence and Starlink, the 10-satellite communications network. The company's initial public offering, in June, raised an extraordinary $85.7 billion, $10 billion more than expected. That made it the largest IPO in history. As if that wasn't enough excitement, SpaceX's shares soared to approximately $177 in less than a week, up from $135 at the IPO. By then, the market capitalization hit $2.4 trillion.

As with many things involving Elon Musk, there are those who love it and those who think the opposite. Michael Monaghan, portfolio manager at Founder ETFs in Dallas is among the former: "We are bullish on SpaceX. We think SpaceX will be the dominant space company with the highest efficiency and lowest price."

Monaghan also views a defense angle that SpaceX could benefit from. "The U.S. wants a moon base, and there is only one company that can do this: SpaceX," he says. "It's being planned partly for geopolitical reasons, with a new report saying, 'the Space Force needs to prepare for an in-person moon conflict with China.'"

On the other hand, there are skeptics, notably Morningstar's industrial equity analyst Nick Owens, who believes the value of SpaceX is $63 per share, which is less than half the IPO price. He's waiting for evidence that SpaceX's goal of putting data centers in space, along with artificial intelligence, is likely to materialize.

"The validation evidence would be that the rockets are reliable," Owens says. "And to find out the commercial viability in space, we will want to know the relative costs to those data centers on Earth."

Of course, there is more to the new space race than SpaceX. For instance, there's Rocket Lab (RKLB), a launch services provider. "I am very positive they are doing really good work in small launches that few others do," says Keith Snyder, a senior analyst at CFRA Research, based near Denver.

Snyder recently published a comment saying that Rocket Lab "is recognized as a preferred supplier across the space industry, with components and platforms being selected for flagship missions such as Artemis, Mars rovers and the International Space Station resupply, as well as for national security programs."

There's also good news on bookings, according to Snyder. He wrote, "Strong customer confidence and demand for [Rocket Lab's] Neutron launch vehicle was evidenced by significant pre-launch bookings." The company also has a record backlog of launches with 70 launches scheduled. Rocket Lab stock recently traded at $107, but Snyder has a one-year target of $140.

Aerospace company Boeing (BA) might not stand out as a major space competitor, but it does have a role in making bespoke rockets, rather than mass-produced ones, writes CFRA analyst Matt Miller. He also notes that Boeing has huge revenue, mostly from its commercial airplane sales: $89.5 billion last year and a forecast of $98 billion this year.

There's also limited competition for its products. The combination of solid revenue and minimal competition (notably from Airbus) should provide some economic ballast for the stock while still giving it a foothold in the Space sector. Miller has a 12-month target of $278 for Boeing stock, compared to a recent price of $223.

For those who want to avoid buying individual stocks, there are exchange-traded funds that track baskets of space-related stocks, such as the VanEck Space ETF (WARP), the Procure Space ETF (UFO) and the ARK Space & Defense Innovation ETF (ARKX). Overall, these funds will likely be less volatile than any individual space-related shares.

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

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While no retirement strategy is foolproof, a variety of studies suggest that a diversified portfolio paired with a 4% starting withdrawal rate (adjusted annually for inflation) has historically had a high probability of making your savings last.

Retirees often struggle with how to generate that income. Economically speaking, selling shares to realize capital gains and receiving dividends from stocks you own are very similar. After all, a company's share price generally falls by the amount of the dividend on the ex-dividend date.

Yet many retirees prefer dividends because of a behavioral finance phenomenon known as mental accounting. Selling shares feels like spending principal, whereas dividends feel like income, even if the economic outcome is largely the same.

That preference helps explain the popularity of dividend-focused exchange-traded funds (ETFs). Some prioritize higher current yields, while others focus on companies with long histories of growing payouts.

Rather than viewing these ETFs as competing strategies, investors can combine them in a dividend barbell portfolio. One side provides higher current income, while the other focuses on total return.

Before doing so, however, there are several important factors to consider, including ETF methodology, tax efficiency and asset location. Here is what you need to know about using ETFs to build a dividend barbell strategy in retirement.

A retiree's guide to high-dividend-yield ETFs

A high-dividend-yield ETF is exactly what it sounds like: a fund designed to deliver a payout that exceeds that of a broad market benchmark. For example, a U.S. high-yield ETF would ideally generate a yield above that of the S&P 500 Index, which currently yields roughly 1%.

These ETFs can be actively or passively managed. Active ETFs rely on the discretion of a portfolio manager and supporting analysts to identify dividend-paying companies they believe offer attractive income potential. Passive ETFs, by contrast, simply replicate a high-dividend-yield index according to a predetermined methodology.

Both approaches have advantages, but passive ETFs tend to be considerably cheaper. Maintaining an index is generally less expensive than employing an entire investment team to research, monitor and select securities.

Investors should also understand what drives a high dividend yield in the first place. In many cases, high-yielding companies are mature businesses where growth opportunities have slowed.

Management may conclude that returning cash to shareholders through dividends makes more sense than reinvesting aggressively in research and development, acquisitions or expansion projects.

That sector composition creates another important characteristic: a natural tilt toward value stocks. Remember that dividend yield is calculated by dividing the annual dividend per share by the share price. The dividend is the numerator, while the share price is the denominator. If a company's stock price declines but its dividend remains unchanged, its dividend yield rises automatically.

Because of this relationship, many stocks with elevated dividend yields also trade at lower valuations relative to earnings, sales, cash flow or book value. That overlap is why many high-dividend-yield ETFs are often classified as value-oriented strategies.

This can be beneficial during periods when value stocks outperform the broader market. However, it can also result in underperformance when growth stocks lead returns, particularly during bull markets.

What retirees need to know about dividend growth ETFs

Dividend growth ETFs take a very different approach than their high-yield counterparts. Instead of focusing on stocks paying the highest yields today, these funds target companies that have consistently increased their dividends over time or are expected to do so in the future.

There are generally two ways to identify dividend growth companies. The first is to examine the actual rate of dividend growth. In other words, how quickly is a company's dividend increasing year over year? Ideally, investors want to see dividend growth comfortably exceeding the Federal Reserve's long-run inflation target of 2%, allowing their income stream to grow in real purchasing power terms.

In practice, however, this approach is less common. The methodology most investors encounter focuses on companies with long, uninterrupted streaks of dividend increases.

For example, 25 years of consecutive dividend growth can earn a company inclusion in benchmarks such as the S&P 500 Dividend Aristocrats Index. The most elite group is the S&P Dividend Monarchs, which are companies that have increased their payouts for 50 or more consecutive years.

To increase dividends through multiple economic cycles requires a business capable of generating consistent earnings and free cash flow.

Consider what a company must survive to maintain a 25- or 50-year streak. That period includes the dot-com bubble, the global financial crisis of 2008, the COVID-19 pandemic, and numerous recessions, inflationary shocks and stock market corrections. Despite those challenges, these businesses continued increasing the amount of cash returned to shareholders.

That commitment often signals several desirable characteristics. Companies with long records of dividend growth tend to have durable business models, healthy balance sheets, robust free cash flow generation, and disciplined capital allocation policies. Management teams are generally reluctant to jeopardize a long-standing dividend growth streak.

So much like how high-dividend-yield ETFs often provide indirect exposure to the value factor, dividend growth ETFs frequently provide exposure to the quality factor.

Quality companies are typically characterized by strong profit margins, consistent free cash flow generation, and high returns on equity and invested capital. While investors can target these traits directly through dedicated quality ETFs, dividend growth strategies often capture many of the same characteristics through their screening process.

The trade-off is yield. All else being equal, dividend growth ETFs generally offer lower 30-day SEC yields than high-dividend-yield ETFs. However, they have historically compensated investors through stronger earnings growth, faster dividend growth and, in many cases, superior total returns.

Over the past decade, some dividend growth ETFs have managed to keep pace with, or even outperform, broad-market benchmarks despite their dividend-focused mandates.

That makes them particularly useful within a dividend barbell strategy. If the high-yield side of the barbell is responsible for generating the current income needed to support retirement withdrawals, the dividend growth side is responsible for growing the portfolio's long-term earning power.

While the initial yield may be lower, the underlying companies continue to compound earnings, free cash flow and dividends in the background, helping support future income growth and potentially extending the longevity of the retirement portfolio.

How to build a dividend barbell strategy in retirement

When evaluating income potential, investors should pay attention to a fund's 30-day SEC yield. This is a standardized yield metric used throughout the ETF industry. While useful for comparing funds, it remains only an estimate and can change over time as portfolio holdings and market conditions evolve.

And asset location matters. Every dividend payment received in a taxable account creates a taxable event. For that reason, many financial advisers recommend holding dividend-focused ETFs inside tax-advantaged accounts such as a Roth IRA whenever possible.

If a taxable brokerage account is your only option, pay close attention to the composition of the ETF's distributions. Generally speaking, qualified dividends receive more favorable tax treatment than ordinary income. By contrast, income derived from bonds, real estate investment trusts (REITs), or certain foreign holdings may be taxed less favorably depending on the fund's structure.

With that in mind, here are two high-yield ETFs and two dividend growth ETFs to consider when building a dividend barbell strategy in retirement.

Vanguard High Dividend Yield ETF

• Assets under management: $96.2 billion
• 30-day SEC yield: 2.3%
• Expenses: 0.04%, or $4 annually on every $10,000 invested

The Vanguard High Dividend Yield ETF (VYM) is one of the most affordable high-dividend-yield ETFs on the market. This is largely made possible by Vanguard's unique ownership structure.

Unlike most asset managers, Vanguard is owned by its funds, which are in turn owned by their shareholders. There are no outside shareholders demanding profit maximization, allowing Vanguard to pass economies of scale back to investors through lower fees.

As assets grow, the firm has historically reduced costs rather than simply pocketing the additional revenue. The result is an expense ratio of just 0.04%. Put another way, a $10,000 investment incurs only about $4 per year in fee drag, all else being equal.

VYM passively tracks the FTSE High Dividend Yield Index, a benchmark that currently consists of more than 600 companies. The index begins by excluding REITs. While this removes many high-yielding real estate securities from consideration, it also improves tax efficiency because REIT distributions are generally taxed as ordinary income rather than qualified dividends.

From there, the benchmark removes companies that have not paid a regular dividend over the previous year or are not forecasted to pay one going forward. The remaining stocks are ranked by forward dividend yield and weighted by market capitalization. That final step naturally tilts the portfolio toward larger, more established companies.

Not surprisingly, the resulting portfolio exhibits a noticeable value bias. VYM currently trades at a price-to-earnings (P/E) ratio of roughly 21.6, below the broader S&P 500's P/E ratio of 32.1. Morningstar also classifies the fund within the large-cap value category through its equity style box framework.

That value tilt does not come at the expense of quality, however. The underlying companies remain highly profitable and continue to grow moderately. The portfolio currently boasts an average return on equity of 19.4% alongside average earnings growth of 9.0%.

Income is naturally the main attraction. As of June 30, 2026, VYM offered a 30-day SEC yield of 2.3%, more than double the yield currently available from the S&P 500.

The fund is also relatively tax efficient for a high-yield strategy. Thanks largely to the exclusion of REITs, the majority of distributions have historically been classified as qualified dividends, though investors should always verify the final tax treatment using their year-end Form 1099-DIV.

Learn more about VYM at the Vanguard provider site.

iShares Core High Dividend ETF

• Assets under management: $14.2 billion
• 30-day SEC yield: 31%
• Expenses: 0.08%

It is useful to keep more than one high-yield ETF on your watch list, particularly if you invest in a taxable account. One reason is tax-loss harvesting.

If a position declines in value, an investor may be able to realize a capital loss by selling one ETF and immediately purchasing a similar, but not substantially identical, alternative. This avoids triggering the wash sale rule. Because VYM and the iShares Core High Dividend ETF (HDV) follow different benchmarks and methodologies, they can potentially serve this purpose.

HDV charges a slightly higher 0.08% expense ratio. That is twice the cost of VYM, but still extremely affordable compared to many competing dividend ETFs. The fund tracks the Morningstar Dividend Yield Focus Index, a much more concentrated benchmark consisting of approximately 75 holdings.

Unlike VYM, which largely relies on dividend yield and market capitalization, HDV employs a more selective screening process. Morningstar evaluates companies using several proprietary measures, including its "Economic Moat Rating," which identifies firms with sustainable competitive advantages.

That assessment is combined with an "Uncertainty Rating," which evaluates the dispersion of valuation estimates, and a "Distance to Default" score that incorporates factors such as leverage and volatility. While systematic, these inputs do introduce an element of analyst judgment into the methodology.

Like VYM, REITs are excluded from the portfolio for tax-efficiency reasons. However, once the screening process is complete, stocks are weighted based on the cash dividends they pay rather than strictly by market cap.

As of June 30, 2026, HDV offered a 30-day SEC yield of 3.1%, substantially higher than VYM. Over the past 10 years, HDV generated an annualized total return of 9.1%. The ETF also delivers a palpable value tilt with an average price-to-earnings ratio of 22.2 times.

Learn more about HDV at the iShares provider site.

Vanguard Dividend Appreciation ETF

• Assets under management: $129.5 billion
• 30-day SEC yield: 1.5%
• Expenses: 0.04%

The Vanguard Dividend Appreciation ETF (VIG) is essentially the polar opposite of VYM. While it charges the same ultra-low 0.04% expense ratio, its benchmark construction is different. VIG tracks the S&P U.S. Dividend Growers Index, which starts by requiring companies to have at least 10 consecutive years of dividend growth.

While not as stringent as the 25-year requirement used by the S&P 500 Dividend Aristocrats Index, VIG's lower threshold creates a more diversified portfolio because more companies are capable of qualifying. Notably, it allows inclusion of many technology companies that only began aggressively increasing dividends over the past decade as their businesses matured and cash flows expanded.

That's not where VIG's screening process ends, however. The index also deliberately excludes the top 25% of companies with the highest dividend yields. While this may seem counterintuitive for a dividend ETF, the goal is to avoid yield traps. These are companies whose share prices and fundamentals have deteriorated so severely that their dividend yields appear artificially elevated

From there, the remaining companies are weighted by market capitalization, but with an important 4% cap on any single holding. This differs from benchmarks such as the S&P 500 or Nasdaq-100, where the largest companies can grow into very large positions over time and increase concentration risk.

Today, VIG holds roughly 330 stocks. Compared to VYM, investors receive stronger growth characteristics. The portfolio currently exhibits an average earnings growth rate of 11.4% alongside an impressive 29.4% return on equity. The trade-off is valuation. Because VIG leans more heavily toward quality than value, the portfolio trades at a richer 26.6 times earnings.

That quality tilt has rewarded investors over the long term. Over the trailing 10 years, VIG has delivered a 13.1% annualized total return, outperforming VYM. Income is still present, just not the primary objective. As of June 30, 2026, VIG offered a 1.5% 30-day SEC yield, which is also tax efficient given the ETF excludes REITs.

Investors should remember that the dividend growth side of the barbell is designed primarily for long-term capital appreciation and future income growth rather than maximizing current cash flow. In that regard, VIG has largely delivered.

Learn more about VIG at the Vanguard provider site.

iShares Core Dividend Growth ETF

• Assets under management: $42.2 billion
• 30-day SEC yield: 2.0%
• Expenses: 0.08%

Tax-loss harvesting is not limited to high-yield dividend ETFs. Dividend growth ETFs are still 100% equity portfolios and remain exposed to market risk. During corrections or bear markets, having a similar but not substantially identical alternative can help investors harvest losses while maintaining exposure.

The iShares Core Dividend Growth ETF (DGRO) charges a modest 0.08% expense ratio and tracks the Morningstar U.S. Dividend Growth Index. While it shares many similarities with VIG, the methodology differs in several important ways.

First, DGRO requires only five consecutive years of dividend growth. While this may seem less stringent, in practice the difference is smaller than investors expect. The lower threshold allows more companies into the portfolio while still maintaining a commitment to dividend growth.

The benchmark also screens for positive consensus earnings forecasts. This means analysts covering the company must generally expect profits to remain positive going forward. This helps avoid firms whose dividend growth streak may be at risk because of deteriorating earnings.

More importantly, DGRO incorporates a quality screen by excluding companies with payout ratios above 75%. The payout ratio measures the percentage of earnings distributed to shareholders as dividends. By limiting payout ratios, DGRO seeks to avoid companies that may be forced to cut their dividends.

Like VIG, DGRO also includes a yield-trap screen. However, rather than excluding the highest-yielding 25% of stocks, DGRO only removes the top 10% of its universe. The fund also imposes a 3% cap on individual holdings, slightly stricter than VIG's 4% limit.

The weighting methodology is another key difference. Unlike VIG's market-cap-weighting approach, DGRO weights holdings based on the total dollar value of dividends paid. Importantly, this is not the same thing as dividend yield.

A company trading with a high share price but with a relatively modest yield may still distribute billions of dollars in aggregate dividends, and therefore, receive a meaningful weight. This approach helps reduce some of the biases associated with traditional yield-focused strategies.

Today, the ETF holds roughly 390 stocks. Its valuation profile sits between VIG and VYM, trading at approximately 24.4 times earnings. Investors currently receive a 2% 30-day SEC yield, offering a bit more income than VIG while still maintaining a strong focus on dividend growth.

Over the trailing 10 years, DGRO has delivered a 13.4% annualized total return, demonstrating that dividend growth strategies can remain fairly competitive with broader equity benchmarks while continuing to grow their income streams over time.

Learn more about DGRO at the iShares provider site.

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With many Big Tech names lining up to report quarterly results this week and next, investors, traders and speculators would prefer to focus on AI, earnings and guidance rather than uncertainty about the Middle East, inflation and interest rates. The main equity indexes reflected this balancing act on Monday.

At the closing bell, the tech-heavy Nasdaq Composite was down 0.05% at 25,508, the S&P 500 had slipped 0.2% to 7,443, and the blue-chip Dow Jones Industrial Average was off 0.6% at 51,841.

The front-month West Texas Intermediate crude oil futures contract added 0.9% to $82.49 per barrel, and the 2-year Treasury yield ticked up to 4.208% from 4.172% on Friday.

The iShares Semiconductor ETF (SOXX, +0.5%) recovered after posting a 10.2% decline last week amid renewed concerns about hyperscaler spending on artificial intelligence infrastructure, as well as another threat posed by an emergent Chinese AI model.

"Despite the recent pullback," observes LPL Financial Chief Technical Strategist Adam Turnquist, citing last week's 1.6% decline for the S&P 500, "market breadth continues to improve."

As Turnquist notes, the percentage of S&P 500 stocks trading above their 200-day moving average has increased to nearly 70% from just above 50% in May, "signaling that participation beneath the surface remains considerably healthier than it was just a few months ago."

At the same time, price action remains volatile amid a cycle of escalating and de-escalating U.S.-Iran tensions.

Apple falls from high branches

Apple (AAPL, -2.1%) was one of three Magnificent 7 stocks in the red on Monday, the share price for the iPhone maker tracking back after hitting new highs on Friday, likely due to some profit-taking.

AAPL reached a fresh intraday peak of $334.99 and a closing record of $333.74 on July 17, briefly overtaking Nvidia (NVDA, +0.2%) as the biggest company in the world based on a market cap.

Tesla (TSLA, -3.0%), meanwhile, sold off ahead of its turn on the earnings calendar after the closing bell on Wednesday. Tesla pre-reported a 25% increase in EV deliveries during the second quarter.

TSLA hasn't seen much upside based on its relationship to SpaceX (SPCX, -3.3%), though the consumer discretionary stock has drifted lower in the afterburn of the biggest IPO in stock market history.

While AAPL was dragging on the index, Google parent Alphabet (GOOGL, +1.5%) was among the top-performing Dow Jones stocks on Monday, along with Amazon (AMZN, +1.1%) and Microsoft (MSFT, +2.2%).

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

Alphabet is also scheduled to report second-quarter results after Wednesday's closing bell. Amazon and Apple are scheduled to report on July 30, Microsoft on July 29.

For the record, Meta Platforms (META, -0.02%) closed marginally lower on Monday. The Facebook parent is scheduled to report earnings on July 29. Nvidia will report on Wednesday, August 26.

AMC's rise is Homeric

AMC Entertainment (AMC), among the most notorious small-cap stocks in financial market history, was up as much as 27.8% on Monday after management reported the highest revenue in the movie-theater operator's more than 100 years in business.

AMC generated earnings of 14 cents per share vs a Wall Street forecast for a loss of four cents per share. Revenue grew by 14.2% to $1.59 billion, topping a consensus estimate of $1.5 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 69.6% to a company-record $321.4 million.

According to CEO Adam Aron (PDF), it's the first time AMC has surpassed $300 million adjusted EBITDA for a three-month period, and AMC also generated $190.1 million in free cash flow.

The CEO is optimistic: "This weekend's powerful debut of Universal Pictures and Christopher Nolan's THE ODYSSEY, with an encouraging media reported $124 million domestic opening, is the latest reminder of the strength of today's theatrical marketplace."

Aron says the filmed version of Homer's epic poem follows a second quarter during which six different movies posted domestic opening weekend gross box office totals of more than $75 million.

"We believe that movie theatres will enjoy, in the full twelve-months of 2026, their strongest yet post-pandemic year, at both the domestic and the global box office," the CEO concludes.

Indeed, with a year-to-date total return of almost 25% vs less than 10% for the S&P 500, the freebies aren't the only thing you can enjoy about this stock.

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As a longtime financial adviser, I've learned that people often look forward to retirement with a mix of eagerness and angst.

While they're usually excited about the freedom they'll have to travel, enjoy new and old hobbies and spend time with family and friends, they also wonder if they'll have enough saved to afford a long and fulfilling retirement.

That's a valid concern. According to the CDC's National Vital Statistics Reports, based on data from 2023, the average American who makes it to age 65 can now expect to live about 20 more years.

Many will live well past that — into their 90s or even 100s. That's a long time to get by on the income you must create for yourself.

It's no wonder a recent Allianz Life study found that 65% of Americans are more worried about running out of money in retirement than they are about dying.

How can you help ensure your money lasts as long as you do? The first step for many soon-to-be-retirees is to stop fretting and start planning.

Whether you're DIYing your retirement or working with an experienced financial adviser, here are four things you should do to prioritize your nest egg's longevity:

Build a retirement paycheck from reliable income sources

One key way to extend the life of your savings is to create a retirement paycheck you can count on every month, so you won't feel forced to sell investments for income during a down market. If you can cover your basic expenses, you'll give yourself more flexibility.

Those reliable income streams will include your Social Security benefits and a pension, if you have one. A part-time job or rental income can also give your retirement paycheck a boost.

If you need a bit more to fill a gap between your earnings and expenses, you could also consider a fixed index annuity strategy that provides consistent cash flow regardless of market conditions.

For retirees who don't have an employer pension, annuities can be used to create a personal pension that works in much the same way.

Protect against major market losses

Historically, the market has eventually recovered from every drawdown, even steep and extended declines. But there's no predicting how long any given recovery might take, and unfortunately, when you're in retirement, time is not on your side.

If you're closing in on your planned retirement date, you may consider transitioning your portfolio to a "margin-of-safety" approach, including defined-outcome strategies that offer some growth but also limit downside risk.

Investing in buffer exchange-traded funds (ETFs) and similar vehicles can reduce the impact of large drawdowns, especially early in retirement, when sequence of returns risk is a concern.

Manage taxes on withdrawals

Thoughtful tax planning is as critical in retirement as it is at any other stage of your financial life; maybe more so. Without it, your retirement savings could be extremely vulnerable — especially if tax rates rise in the future.

Carefully selecting the accounts from which retirement income will be sourced (taxable, tax-deferred and tax-free), and the order in which you'll tap those accounts, can minimize your overall tax bite.

If you've stashed most of your savings in a 401(k) or similar tax-deferred plan, a Roth conversion might make sense. (No, it's not too late.) Note: A ROTH Conversion is a taxable event. Consult your tax advisor regarding your situation.

Proactively managing your tax bracket from year to year could also help you avoid the income-related monthly adjustment amount (IRMAA), a surcharge that could lead to a considerable increase in your Medicare premiums.

Adjust spending during market cycles

The cornerstone of a disciplined retirement plan is a sustainable withdrawal rate. For decades, the "4% rule" — which suggests withdrawing 4% of your nest egg in year one of retirement, then adjusting that baseline dollar amount for inflation each year — has served as a popular benchmark.

But these days, many planners, including yours truly, favor a more flexible withdrawal strategy that adjusts spending based on market performance, especially if you expect to have a long retirement.

This approach can help you extend your portfolio's longevity without significantly affecting your lifestyle.

Keeping a preservation mindset is a must

There are many unpredictable pressures that can impact your nest egg over time, from how long you might live to market performance, inflation, taxes and more. As a result, it's easy to understand how uncertainty can steal some of the joy from what should be an amazing time of life.

But with proactive planning that focuses on preservation, you can push back a little (or a lot) on those worries.

Don't hesitate to ask for guidance from a retirement specialist if you aren't sure where to start. A knowledgeable financial adviser can walk you through the many ways you can reduce your longevity risk and confidently face your financial future.

Kim Franke-Folstad contributed to this article.

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

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

I'm lucky to be close with my mom and dad and lucky they're both healthy and active in their 70s.

They've always taken great care of me (their only child), and I want to do the same for them as they get older. But I can only do that if I know, in advance, how they run their household and pay their bills, as well as what their concerns and wishes are.

If you're a "oneling" like me, you stand to inherit your parents’ homes and any wealth they've amassed. And your parents will want to ensure those things make it into your hands in the way they intended. That takes forethought, tact and a deft touch.

Say 'I love you' with a prenup

Some of my clients won't even consider a prenuptial agreement. I don't force the issue, but I do advise them to at least do this: Save your retirement account statement from the month of your marriage. That's in case you ever need to determine what your financial situation looked like pre-marriage vs post-marriage.I consider it an act of love to go into marriage being honest about everything, including finances. The idea that talking about money is impolite has disadvantaged women for a long time.

To see what can happen when couples don't have these discussions — or when one spouse (most often, the wife) blindly trusts the other with all the family finances — read Belle Burden's New York Times-bestselling book, Strangers: A Memoir of a Marriage. I'm telling every married woman I know about it and encouraging them to read it.

My husband and I have a prenup, and neither one of us has plans to divorce.

But what if you find yourself heading for divorce without one?

If you married without a prenup, get a postnup

Yes, it's really a thing.

Sometimes couples draft postnups when they are giving their marriage a second chance after infidelity or a trial separation. Other times, new business partners draft them to protect the venture they are building together.

Whatevever your reason, start by finding documentation of what your financial situation looked like before you got married. A family law attorney can draft a simple postnup, a legally binding contract that outlines the division of assets and debts in the event of a divorce.

It should also make it clear that each spouse waives the right to contest any inheritance their spouse should receive.

Inherited wealth: Keep it separate

If you have wealth to pass down to a child or children — or you stand to inherit your parents' wealth —congratulations. Only about 22% of Baby Boomers plan to leave an inheritance to their children, according to Northwestern Mutual’s Planning & Progress Study.

For the same reason I'm pro-prenup — because life is uncertain — I'm an advocate for keeping any assets you inherit in your own name. When an inheritance goes into a joint account, it's hard to undo.

Most parents who leave wealth to their child or children do so out of love and concern for their offspring. No matter how much they love their son- or daughter-in-law, their intent is to ensure their child is taken care of. They don't want that money to be commingled.

Have the 'money talk' with your mom and dad

I don't mean you should ask, "Hey, are you gonna leave me any money when you die?" Instead, you might ask, "Have you thought about what would happen if you fell and broke your hip?"

Using personal anecdotes or news stories can ease you into the conversation. If you ask, "Did you read about Prince/Aretha Franklin/Sonny Bono not having a will?," it's an easy segue to, "Do you have a will?"

Prepare for the unexpected

While you're on the subject, consider asking your parents, "Can you walk me through how you manage your household so that if something happened, I could do it the way you do it?"That's so much gentler than: "I think you're slowing down and becoming forgetful. I may need to take over paying your bills."

It should go without saying that you need a will, but I'm often surprised by the people who don't have any estate planning documents — a will, a power of attorney or healthcare power of attorney.

That's one of the first questions I ask a new client, and if they don't have any of those, that's our first order of business.

There's even a service that can serve as a third-party power of attorney for folks without close next of kin or who are estranged from their family.

To move or age in place?

It's an important conversation to have with your folks by the time they're in their mid-70s.

If they don't discuss it with you, you might start by saying: "Have you thought about the benefits of a continuing care retirement community (CCRC)? And, oh, by the way, we should tour some because they all have waiting lists. Once you put your name on a list, it could be years before there's an opening."

CCRCs offer the full continuum of care from independent living to skilled care. But they require a significant lump sum to enter, and you have to be healthy enough to walk in. You can't wait until you need skilled care to go.

Not everyone wants that. My own parents plan to age in place. So, if one of them falls and breaks their hip, they'll go to rehab and come right back home. And when they do, they'll need caregivers to come to them while they're recuperating. Who will find, manage and pay them?

For that matter, who's going to make sure their house is clean and stocked with the right foods? In my own family, that'll be me. And it's a privilege to do it.

Plan ahead

When you consider what could sink a financial plan, long-term care is at the top of the list.

Every financial plan should include estimated long-term care costs along with estimates of any additional dollars you might need to spend on health care — for at-home caregivers, for instance.

Only children are likely candidates to be executors of their parents' estate. As soon as you know you have that responsibility, you should begin to get organized. If you're not, you can expect to spend about 540 hours, or nearly 23 days, on that task.

Don't let that happen.

There's a wonderful tool called Nokbox, or "Next of Kin" box. It was born of necessity; a woman invented it after settling her brother's estate.

It's a file folder organizer with a place to put everything — literally everything — someone would need in the event you’re incapacitated: Your vehicle titles, account numbers for utilities, social media passwords… It's incredible.

You can, of course, outsource executor duties. But there's a lot you can do on the front end to make it manageable.

Remember: You don't have to do any of this alone.

Assemble your team

Just as you might assemble a team when going through a divorce, it's great to bring experts together to help you and your parents navigate their golden years.

Start with an aging life care professional.

They can tell older people what resources they need if they choose to age in place, estimate costs for moving to a retirement community and even come to your parents' home to assess how safe it is.

Build a deep bench

My parents have each other as their power of attorney. I'm the backup, should both of them become ill or injured at the same time.

As an only child, my worst fear is something happening to me, because that would leave my parents vulnerable. So, my childhood best friend is my backup as their healthcare power of attorney. She's known them since she was 3. Having her on our team has given all of us great confidence.

And that's really what all this advance planning is about — confidence for you, your parents, your spouse and kids. It all starts with initiating a conversation.

If your parents haven't had "the talk" with you yet, bring it up to them. I'll bet they'll thank you. And your future self will thank you, too.

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

For years, off-site meetings and corporate events have been viewed as reliable investments in culture, opportunities to strengthen teams, reinforce company values and give employees a chance to recharge away from the daily grind.

But the economics surrounding those gatherings are shifting. Rising costs and tighter budgets are forcing companies to rethink how they deliver memorable experiences without the lavish spending that once defined corporate retreats.

That creates a mandate for meeting planners and executives alike: Do more with less, without making the experience feel diminished or cheap. Pulling that off requires far more than trimming menus or shortening agendas. It demands smarter experiential strategies that preserve energy, engagement and connection even as financial pressures intensify.

And those pressures are real. American Express' latest Global Meetings & Events Forecast describes the environment as the industry's "new normal." While planners remain optimistic overall, the survey found that rising costs are now a major concern for nearly four in 10 respondents, while many organizations are simultaneously navigating budget reductions amid ongoing economic uncertainty.

A shift in mindset

The result is a notable shift in mindset. Companies are moving beyond the old playbook of simply downgrading venues or pushing events online.

Instead, they're searching for creative ways to elevate experiences through thoughtful programming, stronger storytelling and more intentional engagement, proving that a successful corporate event is no longer defined by extravagance, but by impact.

That shift is forcing companies to rethink what employees actually value in corporate gatherings. Flashy destinations and oversized production budgets may grab attention, but they're not necessarily what creates connection or lasting engagement.

Increasingly, attendees are looking for experiences that feel authentic, interactive and worth the time away from their already demanding schedules.

In many cases, constraint itself is becoming a catalyst for innovation. Companies are replacing expensive spectacles with more personalized and participatory experiences:

• Smaller breakout sessions that encourage genuine collaboration
• Local cultural tie-ins that create a sense of place
• Wellness-focused activities that address burnout
• Interactive storytelling formats that make employees feel involved rather than simply spoken to

The smartest planners are discovering that creativity, intentionality and emotional resonance often deliver a far stronger return than excess ever did.

The overall mission is the same

Whatever the "new normal" ultimately looks like, a smaller in-person gathering, a hybrid format or a fully virtual event, the underlying mission hasn't changed. The companies that get meetings right are still trying to accomplish the same things they always have:

• Strengthen relationships
• Reinforce culture
• Give people a reason to feel connected to the organization and to one another

At their core, the most effective meetings and events communicate five enduring messages: Trust, appreciation, care, shared purpose and recognition.

Strip away the staging, the swag bags, the cocktail receptions and the PowerPoint decks, and those are the impressions attendees carry home. People may forget the agenda, but they remember whether they felt valued, included and part of something meaningful.

How to build connections

One of the smartest ways to start building that connection is with a pre-meeting survey. Post-event surveys are standard practice, but they're essentially autopsies, useful for understanding what already happened.

A pre-event survey, by contrast, gives organizers a read on expectations before anyone walks into the room or logs on to the platform. Even when attendee priorities don't perfectly align with the company's objectives, that feedback provides critical intelligence about what participants hope to gain from the experience, insight that can shape everything from programming and speakers to networking opportunities and tone.

The insights gathered from those pre-meeting surveys can also help organizers build something every successful event needs: A compelling storyline.

That narrative thread is what transforms a collection of sessions, speakers and activities into an experience people actually connect with. It's one of the most important ingredients in a successful meeting strategy because, once an event loses its narrative focus, it's extraordinarily difficult to regain momentum.

A strong storyline, on the other hand, creates anticipation, gives attendees a sense of direction and drives higher engagement throughout the event.

For that storyline to resonate, it also has to feel authentic and empathetic. That often requires executives to set aside a measure of ego and focus less on what they want to say and more on what employees need to hear.

The strongest leaders lean on communications, HR and employee experience teams, and sometimes professional storytellers, to help shape a narrative grounded in the audience's mindset, concerns and expectations.

The most effective meetings are not built around executive messaging alone; they're built around understanding where attendees are emotionally when they walk into the room.

What happens during the meeting itself is important, but the real test comes afterward. The organizations that create lasting impact are the ones that continue the conversation long after attendees leave the room or log off the platform.

Ongoing communication, community-building and sustained engagement are what turn a successful event into meaningful long-term change. People may leave energized in the moment, but without thoughtful follow-through, that momentum quickly fades.

The irony is hard to miss: At a moment when employee engagement is at historic lows and retention has become a high-stakes challenge, companies are being forced to do less with the very gatherings designed to build connections.

But the constraint may be clarifying something that should have been obvious all along — employees never needed the lavish destination or the open bar to feel valued. They needed to feel seen, heard and part of something larger than their inbox.

The companies navigating this shift successfully aren't mourning the loss of big budgets. They're recognizing that impact was never about the spend. It was about whether people walked away feeling that the organization understood and trusted them and that it was worth their commitment in return.

That's a message you can deliver in a ballroom or on a Zoom call, at a resort or in a repurposed warehouse. The medium has never mattered as much as the intention behind it.

This isn't a temporary adjustment while companies wait for budgets to recover. This is a permanent recalibration of what corporate gatherings are supposed to accomplish.

The era of events as spectacle is over. What's replacing it is something more demanding and, ultimately, more valuable: Events as a genuine connection. Done right, that doesn't just save money. It builds the kind of culture that keeps your best people around long after the meeting ends.

The question isn't whether you can afford a great event anymore. It's whether you can afford not to create one.

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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.

To help you understand what's going on in business and the economy and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Amid a series of punishing heat waves, demand for air-conditioning will increase to better meet the needs of people, industry and more. But such growth comes with huge challenges.

Globally, there are 2 billion air conditioners, according to the International Energy Agency (IEA). A significant number of them are concentrated in the U.S., where more than 90% of households have AC units. Expect that number to nearly triple by 2050, with growth driven primarily by emerging economies where incomes are rising, including China and India.

Rising global temperatures are a big concern. Extreme heat has become a very deadly health hazard, responsible for an estimated 489,000 deaths annually. In the U.S., it causes more weather-related deaths than floods, hurricanes and tornadoes combined.

HVAC companies smell a big opportunity. These range from established Japanese and U.S. firms like Daikin, Trane Technologies, Carrier, Mitsubishi and Johnson Controls to rising Chinese manufacturers like Midea Group, Gree, Hisense and Haier. The latter have started to make inroads in AC-averse Europe during the continent’s recent heat wave. For example, sales of Midea’s PortaSplit, a popular portable unit, are more than double (200,000) last year’s total in Europe.

Look for advances that make AC better, cheaper and more energy-efficient. Cooling equipment consumes an estimated 5,000 terawatt-hours per year globally, roughly equal to America’s entire annual electricity consumption. Air conditioners also represent the fastest-growing single source of electricity usage in buildings. Among those in the works:

• Start-up Transaera makes industrial HVAC units that cost 20% more than traditional systems but are 40% more energy-efficient. The company has a deal with Amazon to install units in its e-commerce warehouses.
• Bill Gates-backed Blue Frontier has developed a special liquid desiccant process, combined with heat pump technology, that can cool indoor air more efficiently. Recent National Renewable Energy Laboratory (now known as the National Laboratory of the Rockies, NLR) trials found that Blue Frontier’s AC has the potential to significantly lower power demand and cut cooling bills in half.
• Carrier is working with several utilities on in-home trials of its hybrid HVAC units, which have built-in battery systems that can store power generated by solar panels during peak hours, then use it in the evenings to free up more grid capacity.

The future of air-conditioning is more than home cooling, which still accounts for the largest share of the HVAC market. Still, companies like Carrier have seen sales sag and started turning their focus to more lucrative ventures, such as data centers. The huge growth in these new applications could prove a strain on power infrastructure around the world, underscoring the importance of the innovations now being pursued.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Investor fervor for artificial intelligence (AI) keeps making dividend stocks look downright dumpy. Over the past 12 months, the S&P 500 has returned an eye-popping 29.8%, while the Kiplinger Dividend 15, the list of our favorite dividend-paying stocks, returned an average of 13.4%. Just three — Broadcom (AVGO), Johnson & Johnson (JNJ) and recent addition U.S. Bancorp (USB) — beat the market.

What a world we live in, when a 13% annual return is a middling performance. Of course, much of the story remains the mega-cap Magnificent Seven technology stocks that continue to drive the returns of the S&P 500 and now make up an outsize proportion of this primary measure of the markets. Although five of the seven pay teeny-tiny dividends, the stocks are not on anyone's list of income investments.

Slice and dice the S&P 500 numbers, and you'll see better news for the dividend-hungry. Of the 400-plus stocks in the S&P 500 that make a payout to their investors, the median 12-month return has been 14.0%, according to data from S&P Global Market Intelligence. The 100 or so that don't pay dividends had a median return of 6.4%.

In this context, the Dividend 15 looks okay, with seven outperforming the median and eight falling below. The weakness in our squad represents another market theme of the past year: fears that a faltering economy will crimp consumer spending.

Look at four of the five stocks that lost ground over the past 12 months: McDonald's (MCD), Home Depot (HD), Procter & Gamble (PG) and Mastercard (MA). The profits of all four depend on open wallets, but consumer sentiment is testing lows.

Take McDonald's. There's evidence that the world's biggest burger seller is succeeding in winning back value-oriented customers after years of price hikes. Sales at restaurants open for at least one year increased 3.8% worldwide in the first quarter. The company's CEO blunted enthusiasm on the company's May 7 investor call, though, by saying consumer sentiment "may be getting a little bit worse."

One believer that McDonald's has the special sauce: Goldman Sachs, which has it on its U.S. Conviction List of Buy recommendations. McDonald's, Goldman says, has "the right menu, at the right time, everywhere in the world."

Three of the Dividend 15 have raised their payouts since our last review, all modestly. J&J increased its dividend by 3.1%, P&G by 3.0% and Walmart (WMT) by 5.3%. All three are members of our Stalwarts list, where consistency of dividend hikes is paramount.

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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Funds that invest in foreign stocks have had a banner year, but how good a year depends on investing style.

Overseas, value-priced shares did twice as well as their growth counterparts over the past 12 months. That goes some way to explain why Fidelity International Growth (FIGFX) — a member of the Kiplinger 25, our favorite no-load mutual funds — with a 12-month gain of 15%, kept pace with its peers (large foreign growth stock funds) and its benchmark, the MSCI EAFE Growth Index, but lagged the broad MSCI EAFE bogey, which increased 23% over the same period.

Theme-driven investments helped buoy the fund's returns. For a start, the U.S. isn't the only place to find fast-growing artificial intelligence (AI) infrastructure stocks, says manager Jed Weiss.

Taiwan Semiconductor Manufacturing (TSM), a dominant maker of artificial intelligence chips, doubled in price over the past year. Defense spending has ramped up, too, especially in Europe and Japan. Stock in BAE Systems (BAESY) rose a whopping 62% in 2025, though it has retreated some since the start of the year.

Then there's the dynamic world of cement. The industry has been consolidating as more stringent carbon emissions standards and higher energy costs have iced out small companies. Big cement firms — such as Switzerland-based Holcim (HCMLY) — up 39% over the past 12 months — are seeing accelerating market share gains, says Weiss.

But there were also AI-related drags on the fund's performance. Not owning some power companies and electrical components makers — AI infrastructure plays — that did well hurt the fund's returns, says Weiss. And unexpected AI disruptions challenged some holdings, including RELX (RELX), the U.K. company that owns the legal database LexisNexis, and SAP (SAP), the German software giant. (As of March, the fund didn't hold either stock.)

Weiss favors firms with a niche in their industry and good multiyear growth prospects. Price matters, too. Since he launched the fund in 2007, he has delivered a 6% annualized return — well ahead of the broad MSCI EAFE Index and its peers.

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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Retirement planning leans heavily on the assumption that you'll need 70% to 80% of your preretirement income to maintain your lifestyle.

While that general rule works for broad planning, it overlooks a reality many retirees discover only after leaving the workforce: Numerous expenses simply vanish the day you retire.

Bureau of Labor Statistics data show average household spending peaks in the 45-to-54 age bracket and declines by about 20% by age 75, with the steepest drops in the first few years after retirement.

As a seasoned CERTIFIED FINANCIAL PLANNER® (CFP®) and managing partner at Chesapeake Financial Planners, I'm sharing which expenses disappear to help you plan accurately and avoid oversaving at the expense of enjoying your working years.

1. Retirement savings contributions

This is one of the largest eliminations. If you've been contributing 15% of your salary to 401(k)s and IRAs, retirement immediately frees up that cash flow.

Consider someone earning $120,000 annually. A 15% contribution amounts to $18,000 per year. To maintain the same lifestyle in retirement, they don't need $120,000 of income; they need roughly $102,000 before considering other reductions.

Planners build this into projections, but the psychological impact surprises many new retirees: the money you've set aside for decades is now the money you live on, and the shift from saver to spender takes adjustment.

2. Payroll taxes

FICA taxes consume 7.65% of earned income (6.2% Social Security on wages up to $168,600 in 2024, and 1.45% Medicare on all wages, plus 0.9% more for high earners). When you retire, these taxes disappear on account withdrawals, Social Security benefits and investment income.

On the same $120,000 salary, FICA costs roughly $9,180 a year, gross income that doesn't need replacing because it was never part of your take-home pay.

The math gets more complex with other income sources. Social Security benefits face income-tax thresholds but not FICA, and investment income avoids payroll taxes entirely, though self-employment income in retirement still owes self-employment tax.

3. Commuting and work-related expenses

The American commute costs more than most realize. AAA estimates that owning and operating a sedan driven 15,000 miles costs more than $10,000 annually. If your commute accounts for 5,000 to 7,500 of those miles, retirement could eliminate one vehicle entirely from a two-car household.

Beyond the car, consider parking, tolls, professional attire, dry cleaning, office lunches and the convenience purchases that happen on the way to and from work. Studies estimate work-related expenses consume 5% to 10% of gross income for many workers.

A retiring couple who drops one vehicle, cuts dry cleaning from $1,200 to $200, and stops spending $2,500 on work lunches could save $15,000 or more a year, none of which retirement income needs to replace.

4. Mortgage payments

This doesn't disappear for everyone, but nearly 80% of homeowners 65 and older own their homes free and clear, and many who still carry a mortgage prioritize paying it off in the first few years of retirement.

The impact is substantial. The median U.S. mortgage payment exceeds $2,000 a month, or $24,000 annually, so eliminating it dramatically reduces the income needed to cover essentials.

Advisers debate whether paying off a low-rate mortgage early beats investing the money for higher returns. But the benefit of entering retirement debt-free shouldn't be dismissed; research shows retirees without mortgage debt report significantly lower financial stress.

5. Children's expenses

For parents, vanishing child-rearing costs are one of retirement's largest reductions. By the time most people retire, their children are financially independent or should be.

The USDA estimates raising a child born in 2022 to age 18 costs approximately $310,605, not including college, which adds another $100,000 to $300,000 depending on public vs private and how much is financed through loans vs parental contributions.

Parents covering children's phone bills, car and health insurance, tuition, or general support often see these expenses vanish by the time they retire. If you've been spending $20,000 a year on tuition or supporting adult children, that's $20,000 of income that doesn't need replacement.

The caveat: Some adult children never reach full financial independence, or boomerang home after job losses, divorces or other setbacks. Have frank conversations about expectations before retiring to avoid surprises.

6. Life insurance premiums

Life insurance exists to replace income, protecting dependents if you die prematurely. Once you retire, that need often diminishes or disappears entirely.

If you've been paying $2,000 to $5,000 annually for term life insurance while working and raising children, retirement might be the time to let those policies lapse. Your retirement savings have replaced your earning capacity as the asset that provides for your spouse.

Some retirees keep coverage for estate planning or estate-tax liquidity, but most can eliminate or substantially reduce life insurance spending. The freed-up cash flow can fund long-term care insurance, which becomes more relevant as you age.

7. Career development and professional expenses

Throughout your career, you've likely spent on professional development: conferences, continuing education, association memberships, licenses and certifications, business attire and perhaps technology or home-office expenses.

These costs, while sometimes tax-deductible, are real cash outflows. For professionals who must maintain licenses (accountants, advisers, lawyers, doctors, real estate agents), they can run several thousand dollars a year.

Retirement eliminates this entire category: No more industry conferences, professional licenses or trade publications. For some careers, that's $5,000 to $10,000 in annual savings.

8. Pretax healthcare premiums

This one requires nuance. Healthcare costs don't disappear in retirement; in many ways, they increase. But the structure changes significantly at 65, when Medicare eligibility begins.

The average employer-sponsored family health premium exceeded $23,000 in 2023, with employees paying roughly $6,500 of that pre-tax through payroll deductions. Retiring before Medicare eligibility, you may face even higher costs for COBRA or marketplace coverage.

But at 65, Medicare Part B costs $174.70 per month in 2024 for most beneficiaries (more for high earners due to IRMAA), or roughly $2,100 annually. Add Part D ($300 to $600) and a Medigap supplement ($1,500 to $3,000), and total premiums typically run $4,000 to $6,000 per person, substantially less than preretirement family coverage for two.

The catch: Out-of-pocket costs can rise, and Medicare doesn't cover long-term care. But the pure premium expense often drops significantly once Medicare begins.

The cumulative effect

Added together, the reduction can be dramatic. Consider a couple earning $200,000 combined before retirement:

• Retirement contributions (15%): $30,000
• Payroll taxes: $15,300
• Work-related expenses (one person): $10,000
• Mortgage payment: $24,000
• College tuition (now complete): $15,000
• Life insurance: $3,000
• Professional expenses: $4,000

That's $101,300 in expenses that disappear or significantly decrease at retirement. To maintain their lifestyle, they don't need $200,000 in income; they might need $100,000 or less, depending on their other spending.

Do this analysis individually rather than relying on generic rules of thumb. Your specific eliminations depend on your circumstances, but recognizing them prevents oversaving during your working years or undershooting in retirement.

The goal isn't to cut your lifestyle in retirement; it's to recognize that maintaining it costs less than you might think once these quiet eliminations take effect.

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

After years of strong market performance, many investors nearing retirement have seen their portfolios grow significantly.

For much of your working life, growth is the goal. But what if retirement is right around the corner? How much risk should you still be taking on?

I have more than 20 years of experience guiding clients through the complexities of retirement planning, and the answer to this requires a shift in mindset. As retirement approaches, the focus should gradually move away from chasing market gains and toward building income you can rely on.

Retirement planning isn't just about the market

Many investors watch market performance closely and feel anxious when volatility arrives. But retirement planning shouldn't hinge on daily market swings.

A strong retirement strategy is built around predictable income, money that continues to arrive regardless of what the stock market is doing. When that foundation is set, market fluctuations tend to matter far less.

The goal is to make sure your income is guaranteed in retirement. Once that income plan is established, the equity market can still play a role, but it shouldn't be responsible for paying your monthly bills.

For retirees and those approaching retirement, relying entirely on market performance can create unnecessary risk, especially after a long period of strong returns.

Why market success can create hidden risk

Retirement account balances hit all-time highs in 2025, following years of continued growth in the stock market. According to Fidelity, the average 401(k) balance sat at $141,000at the end of March 2026, up 11% from the previous year. The average IRA rose considerably, up 7% year-over-year to $131,380.

However, the combination of consistent contributions and strong market performance can lead to portfolios that are heavily exposed to market risk.

To explain what I mean, consider this analogy from a casino floor in Las Vegas. If someone wins big at the card table, they rarely leave every dollar on the table for the next hand. Instead, they often pocket their winnings and continue playing with a smaller amount. The same logic can apply to retirement planning.

After years of strong gains, investors may want to consider shifting a portion of their profits into safer strategies designed to produce income or preserve capital.

That doesn't mean abandoning the stock market completely. But it can involve leaving some of the original investment in equities while moving the gains into more stable vehicles.

This approach can help investors still participate in future growth while also reducing the potential damage from a major market downturn.

The critical five- to 10-year window

As you near retirement, protecting against losses becomes more important than maximizing gains. That's why I say that five to 10 years before retirement is the most crucial planning window.

During this time period, investors begin transitioning from what's called the accumulation phase of life, where the focus is on wealth building, to the distribution phase, where the goal is turning savings into income.

Unfortunately, many people put off this important planning until the year before they retire. By that point, market conditions may significantly limit your options.

Planning well before retirement will allow you to gradually adjust your strategy, potentially locking in favorable interest rates or income opportunities before economic conditions change for the worse.

Creating guaranteed income in retirement

Most retirees rely on a wide range of income sources to support their lifestyle, including Social Security, pensions and, in some cases, government or military benefits.

However, for many households, these sources alone may not be enough to cover all of their expenses in retirement.

That's where your retirement savings come into play. 401(k)s and IRAs can often be converted into income streams that supplement those other sources of income.

The goal is to create something that resembles the steady paycheck you relied on during your working years.

The role of annuities

One low-risk tool I frequently see clients use to generate income in retirement is an annuity — more specifically, a fixed indexed annuity. These products offer features such as:

• Guaranteed lifetime income
• Principal protection from market losses
• Growth linked to market indexes
• Income options for spouses
• Potential death benefits for beneficiaries

Many annuities also include income riders that allow retirees to receive income without fully surrendering control of their assets. This structure can provide both predictable income and continued account growth, depending on market performance.

It's important to note, however, that annuities are rarely intended to replace an entire investment portfolio. They are typically used to supplement other assets.

Balancing growth and stability

While guaranteed income strategies can offer peace of mind, they also involve trade-offs. Liquidity is often the biggest concern for retirees, especially if they need access to funds for large purchases or unexpected expenses.

That's why I always stress the importance of having a balanced retirement strategy that includes dividing your assets into different buckets.

You may designate a portion of your money to focus on guaranteed income sources like Social Security, pensions or annuities, while another portion is invested in stocks for growth over time to help offset inflation. Another portion might remain liquid, providing flexibility to ensure essential expenses are covered regardless of market conditions.

Before jumping into any investment, it's important to understand all the rules, restrictions and fees associated with it to make sure purchasing one is the right move for you.

Steady income instills confidence in retirement

For many retirees I work with, it's not so much about how much money they have saved, it's about the confidence that comes from having a carefully crafted retirement plan that helps them find investments that will grow at a steady pace, benefiting when the market goes up without taking a hit when it goes down.

Your 50s are not the time to take chances with the money you've worked your whole life to earn. You need a plan that pays you more each year so you can live comfortably 10, 20 or even 30 years into retirement.

When everyday expenses are covered by a steady income stream, retirees can feel more comfortable spending, traveling and enjoying the lifestyle they worked so hard to achieve.

Markets will inevitably rise and fall. But with the right strategy in place, those ups and downs don't have to determine whether your retirement succeeds or fails.

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

One of my clients, a 79-year-old retiree, stopped at her bank's ATM to take out some cash. She had no reason to think twice about it. A few hours later, she was staring at $1,400 in unauthorized withdrawals from her account.

Criminals had installed a card skimmer on the machine. What made the situation worse: The bank didn't own the ATM. The actual owner was a third party, so recovering her money meant weeks of paperwork, phone calls and escalating frustration.

She eventually got every dollar back, but the experience shook her in a way that no market downturn ever had.

At Octave Wealth Management, where I am the president and founder, we spend a lot of time helping clients grow their money: Picking the right investments, managing risk, keeping taxes down. But there's a category of financial loss that doesn't get nearly enough attention in planning conversations: Fraud.

And the tactics being used against retirees right now are more convincing than most people realize.

Here are five scams targeting retirees right now and the specific moves you can make to stop them.

1. The "your money isn't safe" scam

This is the one keeping fraud investigators up at night. You receive a call, text or email from someone claiming to be the IRS, your bank, Social Security, Medicare or the FBI.

You're told your accounts have been compromised, your identity has been stolen or you've been linked to criminal activity. You must move your money to a "safe account" immediately.

You're instructed to wire funds, withdraw cash, buy gold, load money onto a cryptocurrency ATM or hand cash to a courier who shows up at the door. Once that money moves, recovery is nearly impossible.

No legitimate government agency, bank, or law enforcement organization will ever ask you to move money to protect it. If someone calls you on the phone and tells you otherwise, hang up and call the institution directly using the contact number given on its official website.

2. Investment and cryptocurrency scams

These scams generate some of the largest losses among older Americans. According to the FBI's Internet Crime Report, investment fraud cost Americans more than $4.5 billion in 2023, with older adults among the hardest hit.

The scheme typically starts with what looks like a random text message, a LinkedIn connection, or a friendly exchange on Facebook or a dating site. The scammer builds rapport over weeks or months before introducing an "exclusive" opportunity, usually involving cryptocurrency.

You might receive polished account statements showing impressive gains. But the accounts don't exist. When you try to withdraw your money, there is nothing there.

If an investment opportunity arrives through social media, a text from an unknown number or anyone you've never met in person, treat it as a red flag. Legitimate investment opportunities don't come from cold messages.

3. Wire fraud during major transactions

This one catches people off guard because it happens in the middle of legitimate financial activity. Criminals intercept email chains tied to large transactions — home purchases, refinancings, trust fundings, IRA rollovers, family wealth transfers — and send revised wiring instructions that look authentic. The money goes straight to the scammer.

Never rely solely on wiring instructions sent over email. Before moving any significant sum, call a trusted phone number you already have on file — not one provided in the email — and confirm the details verbally.

4. AI voice-cloning and the grandparent scam

This version of an old fraud has gotten significantly harder to detect. A grandparent picks up the phone and hears a panicked voice: "Grandma, it's me. I've been arrested." The voice sounds real because, in a sense, it is — criminals now use AI to clone voices from social media videos and phone recordings.

The caller claims there's been an accident, an arrest, a medical emergency. They need money now. The combination of a recognizable voice and manufactured urgency can override even a careful person's instincts.

The best defense: Establish a family code word that only immediate family members know. If a caller can't provide it, the call ends there.

5. Tech support scams

A pop-up appears on the screen. Your computer has a virus. Your Microsoft account has been locked. Call this number immediately. Once contact is made, the "tech support" rep asks for remote access to fix the problem — and uses that access to steal passwords and drain accounts.

Never allow remote access to your computer from someone who contacted you first. Legitimate tech companies don't reach out through browser pop-ups asking you to call a number.

Easy ways to stay safe

These five scams share the same design. They manufacture urgency that makes it hard to think clearly. The "solution" always involves moving money or giving access fast, before you can verify anything.

A few habits cut the risk:

• Use a credit card instead of a debit card for most purchases, since credit cards tend to offer stronger fraud protections in most cases.
• Skip outdoor ATMs when you can and use machines inside a branch.
• Keep a dedicated credit card with a low limit for online purchases.
• Let unrecognized numbers go to voicemail.
• Inspect email addresses carefully before clicking anything.
• When something feels off, hang up and call the company or family member directly using a number you already trust.
• Consider freezing your credit with the three major credit agencies (Equifax, Experian and TransUnion) and unfreeze when you need to open an account or take out a loan.

The most effective scams aren't built to defeat smart people. They're built to create fear and pressure before you have time to think. The single best countermeasure: Slow down, verify and confirm before you act.

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

Over the past 12 months, Capital Group Dividend Value (CGDV) sports one of the best returns in the Kiplinger ETF 20, our favorite exchange-traded funds. Its 33% one-year return through May beat the S&P 500 as well as 88% of its peers (funds that focus on large-cap stocks trading at value prices).

The exchange-traded fund aims to generate an above-market-average dividend yield by focusing on high-quality U.S. companies — 90% of the portfolio holdings must be stocks of companies with investment-grade credit ratings, and 90% must pay dividends. The fund currently yields 1.3%; the S&P 500, 1.1%.

The result, says fund comanager Chris Buchbinder, is an ETF that typically participates in bullish stretches — though it may not keep up with the broad market — and outperforms during sell-offs.

"Companies that pay dividends have more consistent cash flows, a stronger financial profile and are more resilient during periods of market weakness," he says. Each of the ETF's five managers and a group of analysts independently run a piece of the fund's assets. Over the past three years, the fund's 26% annualized return beat 98% of its peers and the S&P 500.

Managers made a timely move during the 2025 tariff tantrum

During the "Liberation Day" tariff-related sell-off in April 2025, CGDV managers loaded up on semiconductor and semiconductor-related stocks that had fallen dramatically, including Nvidia (NVDA) and Applied Materials (AMAT).

Back then, Nvidia shares hit an intraday low of $87 and it now trades at more than $200. Other chip company stocks rebounded sharply, too. Over the past 12 months, the S&P 500 industry index of semiconductor and semiconductor-related stocks soared 107%.

Before last year's sell-off, the fund had a "relatively modest" exposure to the information technology sector, says Buchbinder. (The sleeve of assets he manages had 0% in tech back then, he notes.) But now, the sector makes up 34% of the portfolio. Don't expect that tilt to change much.

"There's still opportunity in some of these AI semiconductor-related companies and software companies," Buchbinder says.

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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Mark Twain said, "Never put off till tomorrow what may be done day after tomorrow just as well." Coming from a long line of procrastinators, that sentiment rings true. It was also my approach to retirement. I put off the decision again and again.

Until now.

After spending much of my career writing about retirement, I finally decided it was time to start living it. I assumed I was prepared. I had spent years researching the topic, interviewing experts and helping others think through one of life's biggest transitions.

Then I turned in my retirement notice.

What I expected to feel was relief. What I felt seemed more like loss. The experience hit me much harder than I anticipated. In fact, I went through a brief period of sadness that caught me completely off guard.

Retirement looked very different in practice than it did in theory. For the first time, I realized that preparing financially and preparing emotionally for retirement are not the same.

When your identity changes

You can say labels don't matter, but the truth is they do. For most of my adult life, I've been an employee, a writer, a colleague and a contributor. Soon, my title will change to retiree.

Am I old enough? Yes. Have I saved enough? I think so. Am I ready to become the smiling older man walking on a sandy beach? I know too much about retirement marketing to be on the cover of that brochure.

What surprised me most was how much of my identity was connected to my work.

My office sits on the corner of a busy hallway. I only have to turn toward the door to see who is walking by. Throughout the day, colleagues stop in to share stories, kick around ideas, celebrate successes or talk through challenges. There have been plenty of laughs, more than a few crises averted and countless conversations I'll miss.

Retirement means stepping away from more than a job. It means stepping away from a community and a daily rhythm that has been part of my life for decades. Recognizing the stages of change can help make sense of the transition.

In his Bridges Transition Model, researcher William Bridges describes three transitions people go through during major life changes:

• It starts with an ending
• Then comes the neutral zone, the period between an old identity and a new one
• Finally, there is a new beginning, ideally bringing with it renewed energy and optimism for the next chapter

Replacing more than a paycheck

I'll miss getting a paycheck.

I've received one every other Friday for decades. Like an old friend, that ritual is comforting and easy to take for granted.

What surprised me is that a paycheck isn't just income. It's reassurance. Every other Friday, money quietly appears in my account and confirms that everything is working the way it's supposed to.

Retirement asks you to replace not only the income but some of that confidence as well. That's one reason many retirees build strategies around reliable sources of income.

Depending on individual circumstances, annuity products can help create a stream of guaranteed^* income that works alongside other retirement assets and withdrawals. A financial professional can help you develop a customized strategy.

Learning Medicare's lessons

I'll be on Medicare.

After years of relying on employer-sponsored health insurance, I found researching Medicare to be a maze of parts, enrollment periods, deadlines and rules. A qualified insurance agent helped me navigate the process and reminded me that Medicare is anything but free.

Fidelity estimates the average 65-year-old couple will spend roughly $12,850 on healthcare during their first year of retirement. And that doesn't include long-term care expenses.

The lesson is simple: Build room in your retirement budget for healthcare costs.

Building a new community

According to the Holmes-Rahe Life Stress Inventory, retirement ranks ninth — tied with marital reconciliation — among the 43 most stressful life events measured by the scale.

In my case, retirement is accompanied by a move, which is also on the list. While I'll be closer to extended family, I'll also be leaving behind a network of workplace relationships and social connections.

I'll be looking for some new friends, and the best remedy is to get busy. Volunteering and community involvement are how many retirees build new relationships. Ken Dychtwald, founder and CEO of Age Wave, recently suggested society could benefit from an Elder Corps — something like the Peace Corps for retirees.

My own plans include joining Toastmasters, participating in a book club, spending time at a health club, reconnecting with my college alumni association and enjoying my son-in-law's boat.

I should probably let him know about that last one.

The point is to actively seek connection and avoid isolation and loneliness.

I'll get Monday mornings off

For years, the iconic ticking stopwatch from 60 Minutes triggered my Sunday scaries, shifting my mindset from weekend relaxation to work responsibilities. While I look forward to no longer caring whether it's Sunday or Monday, maintaining a schedule can provide structure and purpose.

My father, who spent nearly 30 years in retirement, opened an antique shop after a successful engineering career. He didn't sell much, but he had a place to go every day and a community of regulars and friends.

Turning a passion into a purpose can provide a reason to get up each morning while you're still finding your footing.

Appreciating the gift

Advances in medicine, healthcare and technology are steadily increasing life expectancy. Longer lives are not simply adding years to the end of life — they are reshaping how people think about retirement and the opportunities it presents.

What I've come to realize is that retirement isn't a single event, it's a transition.

I've spent years focused on the financial side of leaving the workforce. What surprised me was how much emotional preparation was required as well.

From the moment people start saying congratulations to the realization that you're now on your own path, retirement becomes a new life story.

Retirement marks an important new chapter of my life. The trick is to turn fear into curiosity and anxiety into possibility.

Like most meaningful transitions, it isn't something you fully understand until you start experiencing it.

* Guarantees are backed by the claims-paying ability of the issuing insurance company.

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

A lot of financial advice treats every stage of life the same, with a checklist repeated with bigger numbers.

This guide walks through what tends to matter most in your 30s, 40s, 50s and 60s.

We'll cover which decisions carry the most weight and what deserves attention at each stage of life.

Financial priorities in your 30s

Higher income in your 30s rarely creates as much breathing room as people expect.

The extra money usually disappears into rent upgrades, childcare, weddings and student loans.

Here's what to do:

• Track what's coming in and what's going out.
• Build an emergency fund. Three to six months of essential expenses can change how a layoff, medical bill or major repair hits a person financially.
• Start retirement savings early, even if the amount feels small. Get the full 401(k) match if you have one. Without a workplace plan, consider an IRA.
• If someone depends on your income, ensure you have term life and disability insurance.
• Prioritize high-interest debt first. After that, the best payoff system is usually the one you'll stick with.

The systems you automate here tend to follow you for decades.

Jeffrey Zhou, CEO and founder of Fig Loans, works with borrowers building credit and rebuilding financial consistency over time.

"The biggest financial improvements usually come from consistency, not intensity," Zhou says. "People tend to underestimate how much automatic savings, recurring payments, and predictable routines compound over a few years."

Financial priorities in your 40s

This is the decade in which people often look financially successful while feeling stretched all the time.

Conrad Wang, managing director of EnableU, works with businesses and households navigating long-term financial and operational planning.

"The people who struggle most financially in their 40s usually aren't reckless spenders," Wang says. "They're carrying too many fixed obligations at the same time. Bigger mortgages, kids' expenses, aging parents and higher insurance costs. The pressure comes from how many things become non-negotiable at once."

David Kolodny, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"Financial complexity increases significantly in your 30s and 40s." Kolodny says. "You're managing an increasing set of personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: They stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

A few priorities start carrying more weight here:

• Retirement contributions need to increase. Aim for roughly three times your salary saved by age 40 and about six times by age 50, although real life rarely follows those benchmarks perfectly.
• Avoid stagnation. A contribution rate that stays frozen for ten years becomes difficult to recover from later.
• A 529 plan can provide tax advantages and flexibility if education funding is part of the plan. The IRS keeps a straightforward overview of qualified tuition programs and eligible expenses.
• Investment allocations deserve more attention now. A portfolio built entirely around aggressive growth at 31 might not fit the same way at 47. Rebalancing matters because markets distort risk exposure over time.
• Estate planning usually gets delayed too long here because people associate wills and powers of attorney with retirement. In reality, this is often when they become necessary.

Make sure documents reflect current life circumstances instead of the version of your life that existed 12 years ago.

Financial priorities in your 50s

Retirement starts feeling close in your 50s. That changes the weight of financial decisions very quickly.

This is usually peak earning territory, which makes the decade important.

A few strong years can materially improve retirement flexibility.

A few careless ones can create pressure later that's difficult to recover from.

Phil Santaro, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"The 40s are when financial complexity compounds faster than income does," Santoro says. "You're managing personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: they stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

In your 50s, protection starts mattering more. Pay more attention to volatility, taxes, withdrawal sequencing and how much market risk your future retirement income can realistically absorb.

A health savings account (HSA) paired with a high-deductible health plan can create meaningful tax advantages for future medical costs. Long-term care deserves attention, too; 70% of people turning 65 today will need some form of long-term care during their lives.

Mortgage decisions become more nuanced during this decade, as well.

Some people prioritize entering retirement debt-free because the psychological relief matters to them. Others prefer keeping more liquidity available and investing excess cash elsewhere. There is no universal answer.

Before retirement gets too close, it also helps to stress-test spending.

Try living for a few months on the income level you expect later, and save the difference.

Financial priorities in your 60s

One bad stretch of market withdrawals early in retirement can weaken a portfolio faster than most people expect because the account is no longer just compounding in the background.

A few decisions start carrying outsize weight:

• Delaying Social Security beyond full retirement age increases monthly payments by roughly 8% annually up to age 70, but the right timing depends on health, cash flow and household needs.
• Withdrawal order affects how much income gets exposed to taxes over time, especially once required minimum distributions (RMDs) begin.
• Medicare enrollment mistakes, coverage gaps and income-related premium surcharges can become expensive quickly.

The large family house that once made sense can start feeling expensive, empty or exhausting to maintain.

Sometimes downsizing is about unlocking equity and simplifying daily life.

Estate plans deserve another serious review here, as well. Your paperwork should reflect your current reality, not the version of your life from 15 years ago.

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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.

Financial planning used to be singularly focused on accumulation, but a paradigm shift has now pushed the focus more on intentionality. Money is a tool that can be used to build a life you can enjoy, which means planning for your ideal future.

That's not to say money isn't important. Make no mistake about it, money can make life easier. Constantly fretting about getting basic needs met is exhausting. But true wealth is about more than money and goes far beyond basic needs. It's less about getting "stuff" and more about a life well lived. Money is a tool in the pursuit of that life.

Prioritize time over things

Acquiring stuff can sometimes feel good and can certainly result in a temporary dopamine hit. But research from the University of Texas at Austin indicates that spending on experiences, such as travel, dining or cultural events, yields greater immediate and lasting happiness compared to material purchases, regardless of cost.

Some families are opting for experiences over possessions, less time commuting and more time connecting. That shift can often lead to greater happiness and lower expenses.

Money is limited, but so is time

Essentially, the question becomes, what brings people joy? The research suggests it's experiences, not stuff, that can prompt lasting happiness. Consequently, time becomes a more valuable commodity than money, in that time well spent leads to contentment.

It's a nuanced argument. Research by Killingsworth, Kahneman, and Mellers suggested that for a large percentage of people, happiness increases as income does. While that might be a byproduct of basic needs being met, the research also suggested that, instead of money increasing happiness, it might decrease unhappiness instead.

But chasing money in an effort to find happiness and disregarding the very real joy that can stem from time spent with loved ones is a mistake many people make. Instead, people should strive for balance, using money as a tool to grant them more time for the things they enjoy.

Redefine success as freedom

Whether it's working fewer hours, taking a sabbatical or saying yes to a passion project, the new dream is control over how you spend your days, not how much you can earn. True success simply isn't measured by the amount of money in your bank account. It's measured by how easily you can pursue your passions and make a difference in your community.

While it's true that money can help you achieve a lifestyle that allows you to live with purpose, far too many people have trouble making the shift from acquisition of assets to living the life made possible by those assets. A financial plan that sets the path toward a life of freedom can't be all about numbers; it also must take into consideration each individual's definition of "freedom."

For some, that might look like traveling the globe in luxury. Others might want to stay close to home, supporting their community through intentional philanthropy. Whatever freedom looks like to you, there's a path toward it.

Well-earned freedom doesn't happen accidentally. But it can happen with some careful planning.

It starts with clarity

Reimagining your ideal life begins with asking what really brings joy. If you can see a vision of your ideal life, you can set the goals necessary to obtain it.

Ask yourself this question: "What does a perfect day look like?" Take time to imagine it without putting restrictions on the vision. Focus on the perfect day without any consideration of money sitting in your bank account. Focus on what factors of your imagined perfect day bring you the most joy.

Once you have your vision, ask yourself the next question: "How do I get there?" It's not a question you have to answer alone. Share your vision for an ideal life with your financial adviser. Together, you can create a plan that sets you on the path toward your vision.

Financial plans that align with your answers will always feel more rewarding and more sustainable. Knowing what the goal is, and how to get there, can be incredibly motivating.

Leading with joy

In my practice as a financial adviser, I start conversations with clients by asking them an important question: "What did you do today that brought you joy?" It's a way to quickly learn about what's important in a person's life and, in turn, what our focus should be for them.

Joy should be at the forefront of any discussion about money and the future. Planning for a purposeful future that brings joy is a way to start setting the foundation to reach that ideal future eventually, and live the life you've dreamt of.

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

If AI is helping financial advisers save time and become more efficient, investors should be asking a simple question: Who benefits from that efficiency?

What if your financial adviser suddenly started taking on twice as many clients? A year ago, that question would have sounded hypothetical. Today, it's entirely plausible.

Artificial intelligence is rapidly changing the economics of the financial advice business. The biggest brokerage firms and financial institutions on Wall Street are openly celebrating how AI will help them cut costs, increase adviser productivity and onboard more clients without adding staff.

According to Bloomberg, JPMorgan CEO Jamie Dimon said the bank's roughly $2 billion annual investment in AI is already producing billions in benefits and cost savings.

Business Insider reported that Dimon pointed to AI-driven savings from reduced headcount, productivity gains and operational efficiencies, while describing the benefits as only "the tip of the iceberg."

What's missing

Conspicuously absent from this reporting was any meaningful discussion about how AI would improve the client experience. That's where the conversation stops being about technology and starts being about ethics.

That became clear to me during a recent podcast conversation with Jeff George, CFA and founder of TAO Financial, an independent fee-only fiduciary adviser who is a member of my Wealthramp network. Like many advisers, Jeff has begun integrating AI into his practice.

Jeff explained he's using AI to help organize research, prepare for client meetings and capture notes during conversations (without sharing personal information).

The note-taking capability, in particular, has changed how he works with clients. Instead of dividing his attention between listening and documenting, he can focus entirely on the conversation and review a detailed record afterward.

That's a meaningful improvement in the client experience because the efficiency allows him more face time with clients.

What Jeff does not do is allow AI to participate in the part of the process clients are paying him for.

"I don't allow AI to influence anything that requires independent judgment," he told me. More telling was what came next: "I believe that clients are hiring me for my advice and that they want my brain. And if I'm using AI to build financial plans, then what are they really paying for?"

Jeff's guardrails are surprisingly straightforward:

• He won't allow AI to recommend portfolio changes, determine withdrawal strategies or make planning recommendations that require professional judgment
• He won't upload client information into public AI tools
• He won't accept AI-generated conclusions without verifying the underlying sources himself
• He won't present AI-generated output to a client as if it were his own analysis

Those guardrails aren't just a reflection of Jeff's approach to AI. They highlight a much bigger issue for investors.

Too much information can overwhelm

Most people who reach out to me to find fiduciary advisers aren't suffering from a lack of information. If anything, they're overwhelmed by it. They've read articles, listened to podcasts, watched YouTube videos and increasingly experimented with AI themselves.

What they still don't know is whether they can afford to retire, whether they're taking too much risk, whether helping an adult child will jeopardize their own future or whether they're making a costly mistake they can't see.

Those are judgment problems that require decisions to be made with full context.

Two investors can have identical portfolios, identical incomes and identical account balances and still need completely different advice because they're solving different life problems. One might be caring for an aging parent.

Another could be supporting grandchildren. One might be terrified of running out of money. Another could need permission to spend more freely. The facts might be the same. The advice should not be.

This is where I think the AI conversation sometimes goes off track.

People often ask whether AI will replace financial advisers. Increasingly, I hear a different version of the question: If consumers have access to the same AI tools, why hire an adviser at all?

It's a fair question.

Consumers can absolutely use AI to become better-informed investors. They can ask smarter questions, learn unfamiliar concepts, compare strategies, explore retirement scenarios and organize information far more efficiently than ever before. Used thoughtfully, AI can be a powerful financial education tool.

But information and advice aren't the same thing.

Jeff described that tension perfectly. Used appropriately, AI can handle the blocking and tackling of running an advisory practice — organizing information, managing workflows, documenting conversations and performing preliminary research.

That frees advisers to spend more time doing work that actually requires experience, context and judgment.

But he also acknowledged the slippery slope. At some point, every adviser will face a choice between using AI to serve clients better and using AI to serve more clients. Those aren't necessarily the same thing.

That's why I believe consumers need to ask a different set of questions. Instead of asking whether an adviser uses AI, find out how you benefit from it. Ask:

• What safeguards are in place to ensure AI supports rather than replaces personalized advice?
• Is confidential information is ever entered into public AI systems?
• What decisions are never delegated to technology?
• How will the adviser's use of AI improve your experience as a client?

This should become part of your adviser vetting process, because their answers will reveal where most of the benefits of AI are flowing — to you or to their firm.

Financial advice has always been an industry where consumers had to look beyond marketing claims to understand what they were really buying. AI doesn't change that reality. If anything, it makes the distinction between outstanding fiduciary advisers and sales-driven advisers easier to see.

The advisers who stand out in the next decade won't necessarily be the ones using the most sophisticated technology. They'll be the ones who can clearly explain how they're using it, why they're using it and where they draw the line.

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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.

Another down day for tech stocks weighed on the broader market Friday, with today's leg lower sparked by reports that a new artificial intelligence model from Chinese startup Moonshot AI bridges the gap with several U.S. models. Poorly received earnings results from streaming giant Netflix (NFLX) weighed on sentiment, too.

At the close, the tech-heavy Nasdaq Composite was down 1.4% at 25,520, the broader S&P 500 was off 1.0% at 7,457, and the blue-chip Dow Jones Industrial Average was 0.8% lower at 52,146.

News that Moonshot AI's Kimi K3 is powerful enough to rival models from OpenAI and Anthropic revived competition fears — and rehashed memories from early 2025, when China's DeepSeek sent stocks into a tailspin. It also pressured several AI-related names, including Nvidia (NVDA, -2.2%) and Intel (INTC, -2.0%).

Netflix stock slides after earnings

A negative reaction to Netflix's second-quarter results also weighed on the S&P 500 and Nasdaq today, with the communication services stock sliding 7.3% — its worst day since April 17.

While the company's earnings of 80 cents per share beat analysts' estimates, its revenue of $12.56 billion fell short and its third-quarter revenue forecast came in slightly below the consensus.

In addition, Netflix said it will begin reporting engagement data on an annual basis vs a bi-annual one. "The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics — revenue and operating profit," the company explained.

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Despite the top-line miss and subsequent stock sell-off, Argus Research analyst Joseph Bonner reiterated a Buy rating on Netflix. He also maintained a $120 price target, representing implied upside of 74% to current levels.

"While competition is intense amid macroeconomic uncertainty, Netflix remains the 'anchor tenant' for consumers in long-form video streaming," says Bonner. "We see the company's incremental moves into live-event sports programming as particularly directed at enhancing its advertising market as well as subscriber acquisition," adding that live events have a higher ad value than scripted content.

As for that advertising business, Bonner notes that Netflix expects ad revenue to double this year, to $3 billion, showing that this segment "continues to scale rapidly.

Travelers soars on Q2 beat

On the plus side of the ledger was The Travelers Companies (TRV), which jumped 9.2% — making it the best Dow Jones stock today — after the property and casualty insurer reported better-than-expected second-quarter results.

In addition to higher demand for insurance, Travelers also saw its catastrophe losses narrow in Q2 and its net investment income soar.

"The scale of our earnings and cash flow enable us to invest in differentiating technology, including AI, at a level that sets us apart, further strengthening the competitive advantages that power those results," said Travelers CEO Alan Schnitzer.

Ahead of earnings, Truist Securities analyst Mark Hughes initiated coverage on the blue chip stock with a Buy rating, saying it is trading at an attractive valuation. "More broadly, we believe the P&C group should be a good performer in light of its consistent topline, limited credit exposure, and moderate interest rate sensitivity."

The earnings calendar heats up next week, with Magnificent 7 stocks Alphabet (GOOGL, -2.2%) and Tesla (TSLA, -2.6%) both reporting.

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

More than most investors realize.

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

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

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

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

Opportunities in the pipeline

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

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

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

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

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

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

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

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

Investing in the age of AI

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Side hustles build wealth, but jobs are boring

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

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

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

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

Girl/boy math and 'no-spend' months

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

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

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

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

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

Be your own financial adviser — it's easy

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

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

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

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

Setting the right foundations

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

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

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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.

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

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

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

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

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

Passing on assets, values and processes

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

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

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

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

Using a flexible giving vehicle

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

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

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

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

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

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

How to navigate family dynamics

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

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

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

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

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

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

Related Content

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• Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who Knows
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• Giving Gamechanger: Why Now's the Time to Use a Donor-Advised Fund
• Donating Complex Assets Doesn't Have to Be Complicated

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

Stocks were choppy Thursday as market participants took in a fresh round of earnings reports and several major developments in the healthcare space. Wall Street also watched as chip stocks continued to sell off, with one company's quarterly results spooking this once-hot corner of the market.

At the close, the blue-chip Dow Jones Industrial Average was down 0.2% at 52,552, while the broader S&P 500 was off 0.5% at 7,533 and the tech-heavy Nasdaq Composite had slumped 1.5% to 25,881.

The Dow's losses were limited thanks to a big regulatory win for drugmaker Merck & Co. (MRK), with the healthcare stock climbing 3.3% after the Food and Drug Administration (FDA) approved its daily pill to treat cholesterol.

"Merck's approval is significant because LIPFENDRA, or enlicitide, is the first FDA-approved oral PCSK9 inhibitor," explains William Soliman, Ph.D., founder and CEO of the Accreditation Council for Medical Affairs (ACMA). "It offers the LDL-lowering power associated with injectable PCSK9 medicines in a once-daily pill."

And strategically, Soliman says, "the approval demonstrates that Merck is building beyond oncology as it prepares for Keytruda's eventual loss of exclusivity."

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The 30-stock index was also buoyed by a well-received earnings report for UnitedHealth Group (UNH, +1.2%). The country's largest health insurer by revenue and market share disclosed higher-than-expected earnings and revenue for its second quarter and raised its full-year forecast.

"Overall, this is an impressive beat-and-raise in Q2, which typically dictates the trajectory for the year, is highly encouraging," says Oppenheimer analyst Michael Wiederhorn, who has an Outperform (Buy) rating on the Dow Jones stock.

Taiwan Semi earnings send chip stocks lower

Elsewhere on the earnings calendar, Taiwan Semiconductor Manufacturing (TSM) posted impressive year-over-year growth in its second-quarter profit and revenue, thanks to strong demand for the tech giant's artificial intelligence (AI) chips.

TSM also gave upbeat third-quarter guidance and lifted its full-year capital expenditures budget to a range of $60 billion to $64 billion, up from its previous forecast for spending of $52 billion to $56 billion.

But the semiconductor stock fell 2.3% today. One reason for today's decline could be quarter-over-quarter revenue declines in several of its non-AI legacy technologies, says Needham analyst Charles Shi, Ph.D. "This is probably a warning sign that the higher memory prices may already be hurting mainstream semiconductor demand," he explains.

Whatever the reason, TSM's sell-off was enough to keep pressure on several chip stocks. Micron Technology (MU), for one, dropped 5.7% and is now down 26% since the start of July. Sandisk (SNDK) fell 12.6% today and is off 38% month to date. Still, the tech stocks remain 200% and 493% higher, respectively, for the year to date.

AtaiBeckley soars 33% on Eli Lilly bid

In non-earnings news, AtaiBeckley (ATAI) was one of the biggest gainers on Thursday, surging 33.4% after Eli Lilly (LLY, +1.2%) said it will buy the psychedelics drugmaker for $2.8 billion in cash, with another $1 billion tied to development and regulatory milestones.

"Lilly is using the financial strength generated by its obesity and diabetes franchises to diversify into neuroscience and other high-need therapeutic areas," says ACMA's Soliman. And while the risks are considerable, he believes there is a substantial opportunity "because treatment-resistant depression affects patients who have already failed multiple conventional therapies."

The potential $3.8 billion purchase price is a drop in the bucket for the blue-chip drugmaker, whose cash and cash equivalents totaled $7.3 billion at the end of 2025.

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Americans 50 and older have long been allowed "catch-up contributions" to their 401(k) plans, IRAs and other retirement accounts. The reason is straightforward: as the runway to retirement gets shorter, Uncle Sam wanted to incentivize as much saving as possible.

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

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

What is a super catch-up contribution?

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

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

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

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

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

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

How to invest your super catch-up contribution

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

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

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

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

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

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

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

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

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

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

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

Don't forget about taxes

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

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

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

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

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

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

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

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

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

What are some legacy planning basics?

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

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

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

Some common components include:

A basic will

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

A will allows you to:

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

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

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

A living will

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

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

A healthcare power of attorney (POA)

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

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

A financial POA

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

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

Other must-dos to help avoid probate

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

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

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

Let's talk about trusts

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

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

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

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

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

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

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

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

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

Do you really need a trust?

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

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

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

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

The sooner you get started, the better.

Kim Franke-Folstad contributed to this article.

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

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

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

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

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

Market drops trigger anxiety

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

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

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

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

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

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

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

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

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

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

The role of risk management in a retirement strategy

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

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

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

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

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

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

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

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

Building a reliable strategy for uncertain markets

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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• Are You Putting Yourself Last? The Cost Could Be Your Retirement Security

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

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

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

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

The incentive you're not supposed to notice

Revenue sharing is simple:

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

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

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

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

Think about the grocery store "shelf space" analogy.

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

Now apply that to your portfolio:

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

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

The cost to you: Hidden fees and compounding costs

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

• Advisory fees
• Fund expenses
• Platform costs

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

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

Why most investors never see it

Revenue sharing is technically disclosed.

But in practice?

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

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

Here's the truth most investors miss

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

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

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

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

The clean break: Fee-only financial advice

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

NAPFA advisors operate under a strict standard:

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

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

Why this matters even more than credentials

Many investors focus on designations, titles and branding.

But here's the uncomfortable truth:

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

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

A simple process of elimination

If you want better financial advice, start here:

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

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

The bottom line

You have two choices when it comes to financial advice:

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

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

For many investors, that means one thing:

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

Related Content

• Overpaying for Financial Advice? A Financial Planner's Guide to Fees
• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth
• 'Fee-Only' and 'Fiduciary' Are Not the Same: A Financial Pro Sets the Record Straight
• I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial Advice
• The Truth About 'Top Producers': What You Should Know Before You Choose a Financial Professional

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do hedged ETFs work?

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

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

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

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

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

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

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

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

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

How we picked the best hedged ETFs

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

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

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

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

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

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

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

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

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

JPMorgan Hedged Equity Laddered Overlay ETF

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

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

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

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

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

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

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

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

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

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

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

Learn more about HELO at the JPMorgan provider site.

Simplify Hedged Equity ETF

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

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

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

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

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

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

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

Learn more about HEQT at the Simplify provider site.

iShares Large Cap Deep Buffer ETF

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

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

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

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

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

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

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

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

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

Learn more about IVVB at the iShares provider site.

Parametric Hedged Equity ETF

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

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

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

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

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

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

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

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

Learn more about PHEQ at the Parametric provider site.

Fidelity Hedged Equity ETF

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

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

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

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

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

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

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

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

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

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

Learn more about FHEQ at the Fidelity Investments provider site.

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

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

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

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

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

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

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

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

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

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

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

Here’s what consumer experts suggest.

Know your rights.

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

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

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

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

Cancel strategically.

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

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

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

Shop around in advance.

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

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

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

Fight back.

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

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

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

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

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Another encouraging inflation reading and a positive session for several mega-cap stocks lifted the broad market Wednesday. A solid round of earnings reports also boosted sentiment, though gains were capped by a down day for chip stocks.

Ahead of the open, the Bureau of Labor Statistics (BLS) said the Producer Price Index (PPI), which measures what businesses pay suppliers for goods, fell 0.3% from May to June. Year over year, wholesale prices were up 5.5%.

"Nearly two-thirds of the June decline in the index for final demand goods can be traced to prices for gasoline, which dropped 12.0 percent," the BLS said.

Core PPI, which excludes volatile food and energy prices, rose 0.2% month over month and 5.1% year over year.

The inflation readings came in better than economists expected, while Wall Street also welcomed downward revisions to the PPI for both April and May.

"The PPI report's largest new piece of information is its downward revisions to inflation in the last few months," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

While Adams believes the cool inflation readings, also seen in the June CPI report, will keep the Federal Reserve on hold when it meets in two weeks, he notes that "it's hard to feel too excited about last month's drop in producer prices, which largely reflected lower energy prices — prices which rebounded in the first half of July as energy traffic through the Strait of Hormuz slowed."

Nevertheless, the blue-chip Dow Jones Industrial Average added 0.3% to 52,658 today, while the broader S&P 500 (+0.4% at 7,572) and tech-heavy Nasdaq Composite (+0.6% at 26,269) closed higher too.

Mega caps rise, but chip stocks struggle

Big gains in several mega-cap stocks helped buoy the main indexes today, with Amazon.com (AMZN, +3.0%), Apple (AAPL, +4.0%), Microsoft (MSFT, +2.8%) and Alphabet (GOOGL, +3.2%) all closing higher.

But the day's upside was contained by another negative session for several semiconductor stocks. Micron Technology (MU), for one, dropped 8.0% and is now down 22% since the start of July. Sandisk (SNDK) fell 8.1% today and is off 29% month to date.

BlackRock pops on earnings, Conagra falls on dividend cut

Over on the earnings calendar, BlackRock (BLK) jumped 6.6% after the asset management firm reported better-than-expected second-quarter earnings. Additionally, BLK became the first investment company to have assets under management top $15 trillion.

Conagra Brands (CAG), on the other hand, fell 0.4% after the Duncan Hines parent swung to a net loss in its second quarter. On an adjusted basis, CAG beat analysts' per-share earnings estimate, though revenue fell short.

The company also halved its dividend. "Resetting our dividend to an annualized rate of $0.70 per share proactively realigns our capital allocation, accelerates progress toward our leverage target, supports critical investments, and strengthens our financial flexibility, including the ability to shape the portfolio over time," said CEO John Brase, who stepped into the position in early June.

Today's decline is only more of the same for the struggling consumer staples stock, which is down 30% since mid-February.

PayPal has its best day ever

PayPal Holdings (PYPL) was also in focus Wednesday, with shares jumping 17.2% — their biggest one-day gain since the payments processor was spun off from eBay (EBAY, +0.2%) in 2015.

Boosting the financial stock were reports that financial services platform Stripe and private equity firm Advent International offered to buy PayPal for $53 billion, or $60.50 per PYPL share — a nearly 28% premium to its July 14 close.

PYPL has struggled in recent years and is down more than 80% from its all-time high near $310 in 2021.

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

For many retirees, those benefits are real.

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

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

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

1. You don't have a pension

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

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

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

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

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

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

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

However, smaller account balances produce smaller RMDs.

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

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

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

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

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

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

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

4. You're planning to retire early

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

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

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

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

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

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

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

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

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

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

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

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

6. You're single today but expect to marry

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

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

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

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

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

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

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

The bottom line

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

Related Content

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

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

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

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

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

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

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

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

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

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

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

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

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

The Gen X retirement squeeze is real and getting worse

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

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

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

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

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

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

One question before we run the numbers

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

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

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

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

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

What the numbers show

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

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

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

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

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

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

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

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

The catch-up window: Use it or lose it

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

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

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

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

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

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

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

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

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

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

This alignment conversation covers three questions:

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

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

Step 2: Audit the real numbers.

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

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

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

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

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

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

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

Step 4: Redirect with intention.

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

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

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

Step 5: Have a compassionate, adult conversation.

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

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

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

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

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

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

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

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

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

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

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

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• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth

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

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

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

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

What long-term care policies cover

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

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

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

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

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

Here are some strategies to consider.

Long-term care insurance

Hybrid insurance products

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

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

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

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

Annuities with long-term care riders

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

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

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

Health savings accounts (HSAs)

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

HSAs come with a rare triple-tax advantage:

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

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

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

Alternative investment strategies

Self-funding and portfolio diversification

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

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

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

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

Real estate investment

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

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

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

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

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

Government programs and community resources

Medicare and Medicaid

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

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

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

Local and community resources

Don't overlook your local support network:

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

There are more choices than there used to be

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

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

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

Related Content

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

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

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

Then they turned 18.

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

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

The American Dream has changed

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

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

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

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

Things aren't rosy for any generation

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

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

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

Silence is not golden

Silence is expensive.

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

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

Start with your own story

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

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

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

Money stories teach lessons that spreadsheets never can.

Be honest about your retirement

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

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

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

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

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

What are the expectations? Clarity prevents conflict.

Discuss inheritance before it's necessary

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

Adult children should know:

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

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

Set boundaries without guilt

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

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

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

Respect your kids' financial choices

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

Instead of criticizing, ask questions:

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

Curiosity builds trust. Judgment shuts conversations down.

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

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

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

Make money as normal to discuss as your vacation plans.

The greatest inheritance

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

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

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

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

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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.

President Donald Trump rolled back his 20% toll on Strait of Hormuz shipping, though an off-and-on ceasefire in the Middle East continues to roil energy markets and interest rates. But consumer inflation was a lot cooler than expected in June, big banks beat Wall Street forecasts and even conflicting headlines suggest interest in the AI trade remains high.

The West Texas Intermediate crude oil futures contract traded above $80 per barrel for the first time since June 17 and was higher by 2.0% at $79.68 on Tuesday. The 2-year Treasury yield ticked down to 4.189% after reaching a new 52-week high and closing at 4.263% on Monday.

The Bureau of Labor Statistics (BLS) said before the opening bell that the Consumer Price Index (CPI) showed its biggest month-over-month decline since 2020 last month. The June CPI report attributed the move to the steepest slide for gasoline prices since 2022.

Bloomberg, relying on "people familiar with the matter," said South Korea-based Samsung Electronics plans to seek some of the same fortune SK Hynix (SKHY, -9.3%) found last Friday when it completed one of the biggest IPOs in U.S. history.

But Reuters quoted a company spokesperson: "Samsung Electronics is not reviewing ​the possibility of issuing American Depositary ​Receipts." Samsung was up 3.4% on its local exchange, and the Korea Composite Stock Price Index was up 0.7% on Tuesday.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

Meanwhile, facing an array of challenges to his authority, new Fed Chair Kevin Warsh is testifying to Congress for the first time since taking his oath of office in May.

Warsh appeared before the House Financial Services Committee today and will testify to the Senate Banking Committee tomorrow about inflation and interest rates.

As Louis Navellier of Navellier & Associates notes, the BLS will release the Producer Price Index (PPI) before the opening bell on Wednesday. "Economists are expecting the overall PPI to decline 0.2% in June," Navellier writes, "so it is widely expected that inflation will also be cooling on the wholesale level."

At the closing bell on Tuesday, the tech-heavy Nasdaq Composite was up 0.9% to 26,107, the broad-based S&P 500 had climbed 0.4% to 7,543, and the blue-chip Dow Jones Industrial Average was higher by 0.02% to 52,508.

GS gets the biggest earnings bounce

Goldman Sachs (GS, +9.1%) was the top-performing Dow Jones stock on Tuesday after management of the heaviest component in the price-weighted index reported expectations-beating second-quarter revenue and earnings.

JPMorgan Chase (JPM, +2.5%) and Bank of America (BAC, +1.9%) also beat Wall Street forecasts and rose.

But Citigroup (C, -5.3%) and Wells Fargo (WFC, -2.5%) exceeded estimates and fell.

C opened higher, but CEO Jane Fraser said during the company's intraday conference call that management is planning additional investments, as well as accelerated job cuts, that could lead to higher costs in the short term.

Wells Fargo, meanwhile, continues to recover after the removal of regulatory restrictions on its asset growth.

Another Black Tuesday for Big Blue

International Business Machines (IBM, -25.2%), which was founded in June 1911 and completed its initial public offering (IPO) in January 1962, had its worst trading day since at least 1968 on Tuesday.

IBM closed with its biggest single-day loss on record, exceeding the 23.7% decline on Black Tuesday, October 19, 1987, after CEO Arvind Krishna said in a letter to shareholders that Big Blue would miss its second-quarter revenue and earnings guidance.

Susquehanna analyst Jamie Friedman reiterated his Neutral (Hold) rating and his $303 12-month target price, citing IBM's quantum computing option. "At the same time," the analyst added, "the other dimensions of the business that comprise the vast majority of revenue are meeting headwinds."

IBM is scheduled to report earnings on July 23.

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

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

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

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

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

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

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

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

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

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

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

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

1. Warsh v. Greenspan

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

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

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

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

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

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

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

See what I mean?

2. Warsh v. Powell

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

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

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

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

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

3. Warsh v. Waller

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

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

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

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

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

4. U.S. v. Iran

Fiscal policymakers make choices, too.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

All of that planning matters.

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

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

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

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

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

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

And that is where many families fall short.

The most ignored inheritance

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

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

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

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

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

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

1. Turn family time into wisdom time

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

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

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

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

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

2. Share the stories behind the money

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

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

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

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

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

3. Create a family investment conversation

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

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

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

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

4. Help them build real-life capability

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

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

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

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

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

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

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

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

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

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

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

The best legacy is more than money

A good estate plan can transfer assets efficiently. A good family legacy can transfer values, judgment and purpose. Both matter.

But if we leave our children money without wisdom, we may leave them resources without direction.

Financial wealth can change a child's balance sheet. Wisdom wealth can help guide them toward a joyful, meaningful life supported by financial security.

Your children may inherit your financial wealth. The deeper question is whether they will also inherit your wisdom wealth.

To learn more about legacy, personal transformation and other related topics, you can order my new book (out today!), The Wisdom and Wealth Solution.

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

I picked up Strangers: A Memoir of Marriage by Belle Burden expecting a juicy divorce memoir. What I got was a thoughtful, sometimes uncomfortable look at how a marriage can unravel so gradually that, by the end, the person you've shared your life with feels almost unrecognizable.

Burden's memoir has all the ingredients of a page-turner: Wealth, privilege, beautiful homes, family dynamics, betrayal and a divorce that becomes increasingly contentious.

More than once, I found myself staying up later than I should have, telling myself I'd read just one more chapter.

As a financial adviser, however, I found myself reacting to different parts of the story than most readers probably would.

At one point, I wanted to reach through the pages and yell, "No! Do not take your money out of your separate property trust and put it into a jointly owned home!"

That's what made the book so compelling to me. Beneath the story of a marriage ending was another story unfolding quietly in the background: The financial decisions being made along the way.

The danger of disengaging with your finances

Burden's story reminded me how easy it is for intelligent, capable people to become passive participants in their financial lives. Not because they lack the ability to understand money, but because life is busy.

Careers demand attention. Children need to be raised. Marriages operate on trust. One spouse naturally takes the lead in certain areas, and before long, financial decisions become something that simply happens in the background — often brushed aside with a comment like, "This is all too complicated for you to understand, anyway."

Most of the time, that arrangement works just fine … until circumstances change.

The reality is that many of the financial pitfalls people encounter aren't obvious. Few people wake up worrying about how property is titled, whether inherited assets have been properly protected, whether a prenuptial agreement still reflects their current situation, or whether beneficiary designations are consistent with their wishes.

Yet these are precisely the kinds of issues that can have life-changing consequences.

What makes Strangers particularly powerful is that Burden doesn't portray herself as a victim of circumstance. Near the end of the book, she reflects on a series of decisions involving her prenuptial agreement, property ownership and her level of involvement in the family's financial affairs.

Reading those reflections, I found myself thinking less about the divorce itself and more about the dozens of moments along the way when a different conversation, a second opinion or a deeper understanding of the financial implications might have altered the outcome.

That's a lesson I see play out frequently in my profession.

Many people assume the greatest financial risks they face involve the stock market. They worry about whether they should buy a particular fund, invest in international stocks or wait for a market correction.

In reality, some of the most consequential financial decisions have little to do with investing. They happen when we sign legal documents we don't fully understand, make changes to ownership structures, neglect to update estate plans or assume someone else is paying attention to details that affect our future.

The value of expert financial advice

This is one of the reasons I believe comprehensive financial planning is so valuable. A good financial adviser doesn't simply manage investments. They help clients identify risks they may not even realize exist.

Sometimes the most important question in a planning meeting isn't, "What should I do?" but rather, "What haven't I thought about?"

And yes, you can use AI chatbots to answer questions, but you need to know what to ask them.

An experienced adviser, however, can prompt the questions that haven't yet occurred to you:

• What happens if circumstances change?
• Does this legal agreement still reflect our intentions?
• Have we unintentionally exposed assets we meant to protect?
• Is the financial structure of our lives still aligned with the reality of our lives?

Those aren't questions most people ask regularly. They're certainly not questions people ask when they're in love. Yet they're often the questions that matter most.

The power of staying engaged

That's ultimately the financial lesson I took away from Strangers. Burden's story is deeply personal, and every marriage is different. But her reflections serve as a reminder that financial security isn't created by avoiding difficult conversations. It's created by having them early, revisiting them often and staying engaged in the decisions that shape your future.

By the end of the book, I wasn't thinking about the divorce anymore.

I was thinking about all the people sitting across from me every year who assume nothing will change.

Most of the time, they're right.

The problem is not planning for the possibility that they're wrong.

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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.

While anxious eyes watch oil prices and inflation indexes, the best news for savers and income investors is hiding in the bunker often called the belly of the yield curve. So far in 2026 through the start of June, two-year Treasury yields have leapt from 3.46% to 4.01%, and three-year yields from 3.53% to 4.06%.

At the same time, despite chatter about inflation pushing up interest rates at the long end, these show gentler climbs, with 30-year T-bonds crawling from 4.86% to 4.97%. This tells us traders anticipate the surge in inflation to persist through 2029, then recede toward the Federal Reserve’s 2% target.

It also means savers and short-term-bond collectors have it better than long-term-bond investors. If yields climb, risk to principal and likely lost opportunities do not justify locking in 5% or 5.25% for a decade or longer. (Prices and yields move in opposite directions.) No wonder inflows to short and ultra-short bond funds are soaring. Where to best position your money on the yield curve is rarely so clear-cut. Read on for tips on minimizing costs and to see opportunities for extra marginal yield.

The easiest path to higher yields

The simplest and least costly approach is to accumulate short notes and bonds directly, either using the Treasury Direct website or a brokerage account. This is a freebie if you have cash reposing in, say, a Fidelity brokerage money market account currently paying 3.33%.

Switching to two-year 4.0% T-notes means for every $10,000, you see an extra $67 a year — enough to notice — assuming you keep the principal until maturity. There are also my favorite full-faith-and-credit federal agency notes, such as the Federal National Mortgage Association’s 4.3% notes due in May 2028. Unless you will need the money before maturity, this is sweet.

Banks usually offer a tad more on certificates of deposit, and there is also no cost.

Shop at a bank-rate site, or see if your brokerage posts CD rates noticeably higher than the Treasury pays. Fidelity, with the 3.33% money fund, lists 3.90% for various 90-day CDs and slightly upward of 4% for a ladder of six-, 12-, 18- and 24-month bank deposits. I am not a fan of longer-dated CDs because they do not pay suitably higher rates.

You can also shop for and compare the best CD rates using this Bankrate tool:

Tactical ways to earn higher yields

To angle for still higher income with equally short maturities, you will bear some expenses, but they can be trivial. I generally endorse short-dated defined-maturity corporate bond funds; Vanguard’s new suite of these charges 0.08% in fees and includes Vanguard Target Maturity 2028 Corporate Bond (symbol VBCB), an exchange-traded fund whose portfolio is valued to yield 4.50% to maturity; the fund terminates in December 2028.

That is long enough for a defined-maturity fund. The yield to maturity on a similar Vanguard fund slated to end in 2035 is just 5.25%.

Another higher-yield idea in the belly is a high-yield bond fund with a pile of bonds due to mature in a couple of years. This is a face-off between the established PGIM Short Duration High Yield ETF (PSH) and newcomer Columbia Short Duration High Yield ETF (HYSD).

Both are actively managed (which matters in high yield), charge low enough expenses (between 0.4% and 0.5%) and distribute close to 6% — more than enough to absorb the cost. There is little to gain now entering a long-term high-yield fund, though if you hold any with embedded unrealized gains, leave it be. You have done extremely well.

Again, if I have written zero that you do not already know, at least accept my affirmation that when every half percentage point matters, you can get it safely and effortlessly and at minimal cost. Banks and fund companies are not always your friends, but in the area of inexpensive short-term cash alternatives, they are worthy partners.

A financial advisor can help you build a strategy for saving, investing and reaching your long-term goals. Use the tool below to find an adviser who can help.

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

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One of the most interesting — and truly dramatic — highways in Southern California lies due north of Los Angeles. Known as The Grapevine, it is a steep, winding, five-mile section of Interstate 5 that goes through the Tehachapi Mountains, rising more than 4,000 feet via the Tejon Pass.

While not apparent at first glance, there are several small communities along the route.

In one of them, two neighbors were locked in a struggle over the refusal of one to recognize that an "implied easement" had been established nearly 30 years ago. Similar legal issues go back — way back — to Ancient Rome and the English common law brought to America in which the basic principles of using a neighbor's property without a written deed were established.

A paradise … until he moved in

In the small mountain community, longtime readers "Jill" and her husband, "Ricky," live in a mobile home on Lot A, which they bought from "Sally" more than 20 years ago. Sally had owned that land and the adjacent parcel, Lot B, for many years. Initially, she rented out a mobile home on Lot B, but she recently sold the lot to "Matthew."

A driveway is located between Lots A and B, with a portion of it on Lot B. For more than 30 years, Sally and all her tenants, including Jill and Ricky, either walked or drove across that Lot B portion to reach the nearest road.

Aside from a forested, 45-degree downward slope that is impossible to safely walk down or drive over, there is no other practical way to reach the nearest road. In other words, without access to that portion of the driveway on Lot B, Lot A would be landlocked.

"This wonderful place was a little paradise for everyone in the area until six months ago, when Matthew became our next-door neighbor," Jill said. "Overnight, our lives became a living nightmare with his behavior."

'You are using my property without permission'

Matthew became the neighbor from hell. He'd pound on their door and send them nasty texts, demanding to be paid $16,000 for their use of his driveway.

In addition to other assorted threats that I read in his texts, he threatened to lock a gate between the two lots, which would prevent the couple from leaving their property.

I had several telephone conversations with him, and the expression "as stubborn as a mule" fit Matthew, though I would say he was as stubborn as an entire barn of mules.

Given the facts and history of usage of that driveway, in my legal opinion, he didn't have a chance of collecting 1 cent from them.

Of course, the legal question boils down to this: Could he charge them anything for walking or driving over that small section of driveway that is, indeed, located on his property?

I referred my readers to Bakersfield, California, real estate attorney Fawn Dessy, who answered that question with two words: "Absolutely not!"

Creation of an implied easement

"This common situation in rural areas gives rise to what we call an implied easement," Dessy said.

She cited a classic definition that law students never forget: An implied easement is found when a property owner was previously using one part of their land to benefit another part and then divides and sells the parcels. Its use legally continues. It is usually not written in a deed but is recognized since it is based on prior use of the land.

Dessy listed the specific legal requirements to establish an implied easement:

• Common ownership. Both the parcels must have originally been owned by a single person or entity.
• Severance. The parcels must have been separated through, typically, a sale.
• Apparent and continuous use. Before the parcels were split, the use was visible, obvious and ongoing.
• Reasonable necessity. The easement must be reasonably necessary for the occupants on the parcel that is benefited by its use, such as getting to and from a highway.

Dessy's letter to Matthew

Dessy sent a polite, yet no-nonsense, letter to Matthew, citing controlling cases and urging him to take no actions that would in any way harm my readers.

Over the next few days, Matthew and I had reasonably pleasant telephone conversations in which I tried to reason with someone whose mind was made up, regardless of the facts. Then a question occurred to me: Had he been aware of that easement before buying Lot B? Did the information appear in the listing and sale agreements?

If it wasn't obvious to him or in the sales documentation — or he simply did not know of it — he would likely have a claim against the real estate agent who handled the transaction.

While it would require an appraiser to determine how much he overpaid, if any amount at all, for a lot subject to the implied easement, if he really wanted to pursue the matter, that would be his best bet.

So, I called him and asked, "Was the easement mentioned in the real estate sales agreements?"

At first, he did not directly reply, and then he said, "Beaver, I got Attorney Dessy's letter. Tell them they can continue using the driveway, as before. I'm done fighting. And, no, the easement was not disclosed in the actual sales documents. But the seller told me about it."

So he'd known about it all along. He'd been after a cash grab, punctuated by threats, bullying and name-calling.

I gave the good news to my readers that he was dropping his claim. The couple emailed me, "Mr. Beaver, Paradise has returned to our little corner of the world."

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

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

President Donald Trump re-imposed a U.S. blockade on Iran and introduced a 20% toll on all cargo transiting the Strait of Hormuz, adding to uncertainty at the key passage to and from the Persian Gulf. At the same time, another steep sell-off for South Korea-based semiconductor stocks undermined "risk on" sentiment stateside.

"All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as 'THE GUARDIAN OF THE HORMUZ STRAIT,'” the president posted on Truth Social, "but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."

The front-month West Texas Intermediate crude oil futures contract was up 8.8% to $77.72 per barrel. The 2-year Treasury yield ticked up to 4.269% from 4.208% on Friday and reached a new 52-week high.

Meanwhile, the Korea Composite Stock Price Index dropped 9.0% on Monday. The KOSPI recently traded into "bear market" territory by declining 20.5% from its record closing high on June 22 through last Wednesday's close.

"The stock market's attempt to break out of its six-week consolidation faces a couple of familiar challenges—tech volatility and geopolitics," E*TRADE from Morgan Stanley managing director Chris Larkin observes. "The ongoing swings in semiconductors has made it difficult for tech to mount a sustained push to the upside, and while the market has so far taken the breakdown of the US-Iran ceasefire in stride, escalating hostilities and rising oil prices won't help the bullish cause."

Larkin notes that investors, traders and speculators expect incoming consumer and producer inflation data to show some cooling. "But," he adds, "the market may not get as much of a boost from good news if traders think oil is headed higher again."

Big Tuesday

Indeed, this week's economic calendar, Tuesday morning in particular, is all about inflation and interest rates.

The Bureau of Labor Statistics (BLS) will release the June Consumer Price Index (CPI) report at 8:30 a.m. Eastern Standard Time. That's less than two hours before new Federal Reserve Chair Kevin Warsh makes his first appearance before Congress as mandated by the Federal Reserve Act.

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The act requires the Fed chair to appear twice a year to talk about the central bank's Semiannual Monetary Policy Report. Warsh is scheduled to testify before the House Financial Services Committee on Tuesday and at the Senate Banking Committee on Wednesday.

Tuesday is also a big day on the earnings calendar, with Bank of America (BAC, -0.2%), Citigroup (C, -0.1%), Goldman Sachs (GS, -0.8%), JPMorgan Chase (JPM, -0.6%) and Wells Fargo (WFC, +0.6%) scheduled to report second-quarter results and offer forward-looking guidance before the opening bell.

SKHY vs AAPL

SK Hynix (SKHY, -9.3%) was down 15.4% during the first trading session on its local exchange after it completed one of the biggest IPOs in U.S. history on Friday. SK Hynix and fellow chipmaker Samsung Electronics, which was down 10.7% on Monday, make up about 51% to 53% of the KOSPI.

The iShares Semiconductor ETF (SOXX, -4.8%) posted a more modest loss, though Nvidia (NVDA, -3.5%) was the worst-performing Dow Jones stock.

Apple (AAPL, +0.6%) traded against Monday's trend for both the Magnificent 7 stocks and tech generally, touching a new all-time high even as the Roundhill Magnificent 7 ETF (MAGS, -1.0%) was well in the red.

Citi Research analyst Asiya Merchant reiterated her Buy rating and raised her 12-month target price for AAPL from $315 to $365, citing the September release of the iPhone 18 as "an important catalyst that could further strengthen investor sentiment." The iPhone 18 is expected to include Siri AI.

At the closing bell on Monday, the tech-heavy Nasdaq Composite was down 1.6% at 25,873 the broad-based S&P 500 had shed 0.8% at 7,515, and the blue-chip Dow Jones Industrial Average was off 0.3% at 52,498.

When FAST is also safe

If there is such a thing as a safe stock, Fastenal (FAST, +1.2%) qualifies according to Kiplinger's Personal Finance Magazine contributing columnist James Glassman. As Glassman notes, the wholesale nuts and bolts distributor has boosted its dividend for 26 straight years, and it has a beta of 0.88. So it's a "Dividend Aristocrat," and it's less volatile than the broader market.

FAST, which is also scheduled to report earnings before the opening bell on Tuesday, generated a year-to-date total return of 17.1% through July 10 vs 11.4% for the S&P 500. The industrial stock is also up 94.1% and 451.8% over the trailing five- and 10-year periods vs 85.7% and 316.3% for the index.

The Wall Street analyst community is split on FAST: Five Buy, seven Hold and five Sell ratings. But Rothschild & Co. Redburn sees something different here, too.

"An investor who committed $9,000 to purchase 1,000 shares at Fastenal’s IPO in 1987 would today hold shares worth approximately $15.5 million," analyst William Blunt writes in the March 2026 Redburn Review (pdf), "equating to a compounded annual return of 21.6%, or 22.2% after reinvesting dividends."

Blunt says the culture established by founder Bob Kierlin, who was CEO for 35 years, is built on frugality. "This disciplined approach to costs has enabled sustained reinvestment," he adds, "reinforcing a virtuous cycle of profitability and expansion."

On Monday, Rothschild Redburn initiated coverage of FAST with a Buy rating and a $55 12-month target price.

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To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

Memory chips traditionally see booms and busts. Strong demand causes prices to rise, then new supply hits the market and prices fall. Rinse and repeat.

That cycle has been upended, at least for now. Massive demand from the artificial intelligence frenzy has created severe shortages and prolonged price hikes. Top memory makers Micron, Samsung and SK Hynix have seen revenue, profits and stock prices explode.

Is the memory market different this time?

Many analysts and investors are betting that the market has fundamentally changed. In a recent investing presentation, Micron seemed to reflect the sentiment, saying that "the memory industry has been structurally transformed by the proliferation of AI."

But it’s not likely the AI boom will end memory’s cyclical nature. "The core tenet of cycles is still very much part of the story," says William Kerwin, an analyst at Morningstar. "The key question for investors is when this cycle peaks and how far it falls thereafter," Kerwin wrote in a recent Micron research note.

Kerwin says that memory makers still don’t want to overbuild because when you have oversupply, pricing crashes. Companies also don’t want idle capacity at hugely expensive chip plants. "Demand can change on a dime," he says.

Chipmakers have big expansion plans underway, but new factories take a long time to build, and "no major greenfield additions across the industry are expected to matter before 2028," according to a recent report by market research firm Omdia.

"Major memory manufacturers have internalized the lessons of previous cycles," said Soo Kyoum Kim, an analyst at IDC, in a recent article. "They are exercising deliberate capacity discipline" by prioritizing advanced AI products and not rushing to fill every order.

However, this unprecedented upswing will last years. A downturn is expected in 2029, according to Kerwin, when more supply becomes available from major new manufacturing plants.

Memory chip sales have absolutely skyrocketed

Global memory chip revenue is forecast to hit about $803 billion this year, according to World Semiconductor Trade Statistics. For perspective, that’s about the same as the entire semiconductor market in 2025, which was $796 billion.

This year, memory revenue will nearly double the value of all logic chips, a category that includes chips from Nvidia, Intel, Broadcom, Qualcomm, Apple and many others. Memory chip revenue is a driving force behind overall semiconductor revenue being set to reach an astronomical $1.5 trillion this year and nearly $2 trillion in 2027.

Micron’s recent third-quarter results highlight the trend. The company saw quarterly revenue explode 346% year-over-year to $41.5 billion. In 2026, revenue will be nearly $140 billion, with sales set to hit $340 billion in 2027, according to a Morningstar forecast. Back in in 2023, the U.S. memory chipmaker had $16 billion in revenue.

Chipmakers still want to avoid a painful crash and will continue to exercise discipline over supply, ready to respond if memory prices sink. Another recent tactic is using long-term contracts to smooth the ups and downs of demand. Micron inked 16 multi-year deals worth $22 billion to start, for example.

Even in a downturn, global memory revenue will remain at a far higher level because of AI demand. Prices will be higher than the pre-AI boom, too. "We're not making a call that AI demand is going to slow down," says Kerwin. Rather, the bearish call is that a glut of supply brings prices back down.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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