Stocks struggled to get off the ground Wednesday as volume thinned out ahead of the long holiday weekend. As a reminder, the bond markets will close early tomorrow for the Fourth of July, and both the stock and bond markets will be closed on Friday.

At the close, the Dow Jones Industrial Average was down 0.03% at 52,305, and the S&P 500 was 0.2% lower at 7,483.

The Nasdaq Composite, meanwhile, slumped 0.7% to 26,040 as investors continued to take profits on several red-hot memory chip stocks. Micron Technology (MU), for one, slumped 10.6% but remains up nearly fourfold for the year to date. And Sandisk (SNDK) — the best S&P 500 stock of 2026 so far with its 760% year-to-date return — plunged 10.6%.

Meta soars 9% on surprising cloud shift

While sharp losses in semiconductor stocks dragged on the Nasdaq, a big rally in Meta Platforms (META) shares helped limit losses for the tech-heavy index.

META jumped 8.8% — its best day since January — after a Bloomberg report indicated the Facebook parent is building out a new cloud business and will sell its excess artificial intelligence (AI) computing power to external customers. This will allow Meta to earn revenue on the computing capacity it is not using.

"Meta building a cloud business is the single most powerful near-term rebuttal to the 'hyperscalers are overbuilding without clear ROI' bear narrative," says Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace. "Every dollar of Meta cloud revenue that flows from an external customer is a dollar that justifies another dollar of Meta infrastructure spending."

Salesforce jumps on Guggenheim upgrade

Over on the Dow, Salesforce (CRM) emerged as one of the best performers of the day, adding 4.2% after Guggenheim analyst John DiFucci upgraded the enterprise software stock to Buy from Neutral (Hold).

CRM is down more than 38% for the year to date, making it the worst Dow Jones stock of 2026 so far, on concerns that AI will create an existential crisis for software-as-a-service (SaaS) firms.

While DiFucci admits that AI creates "a significant risk" to SaaS business models, "the Armageddon scenario currently priced into the stock is misaligned with reality."

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The analyst set a $228 price target on CRM, which he says is trading at "an attractive entry point," representing implied upside of 40% to current levels.

Caterpillar sinks after Burry unveils new short position

At the other end of the Dow was Caterpillar (CAT), which plunged 6.9% after "Big Short" investor Michael Burry said he is betting against the high-flying industrial stock.

Shares are up 73% for the year to date due in part to strong demand for its power energy segment, which supplies AI data centers. Its construction unit has also seen impressive growth.

"I have never shorted Caterpillar," Burry wrote in a Substack post. "It has always done great for me on the long side." But the stock "jumped out" at him due to its stretched valuation, he said.

According to Morningstar, CAT is now trading at a price-to-sales ratio of 7.07, well above its five-year average of 2.54.

ADP jobs data comes up short

In economic news, data from ADP showed the U.S. added 98,000 private payrolls in June, below the 122,000 from May and the 110,000 new jobs economists expected.

While private job growth slowed in June, "nine of 10 industries gained workers," says Elizabeth Renter, senior economist at NerdWallet. "This dispersion is a good sign, even if education and health services continue to pull more than their share of the weight."

The ADP report was released ahead of tomorrow's June jobs report, which is expected to show the addition of 115,000 new nonfarm payrolls. This data will give us "a better understanding of the June labor market," says Renter. "It's likely to illustrate steady stability — both nothing alarming and nothing to get too optimistic over."

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Warren Buffett famously quipped that diversification is for people who don't know what they're doing. Judging by the explosive growth of S&P 500 ETFs over the past few decades, millions of investors are perfectly fine playing dumb — and their retirement accounts are thanking them for it.

After all, beating the market year after year is incredibly hard. Even Warren Buffett couldn't do it consistently. He's considered the GOAT of long-term investing for good reason. Between 1964 and 2024, Berkshire Hathaway (BRK.B) delivered an overall gain of more than 5,500,000%, or a compound annual gain of nearly 20%. By comparison, the S&P 500, the main benchmark for U.S. stocks, gained 39,000% and 10%, respectively.

Doubling the performance of the broader market over a six-decade span is an investing feat that may never be repeated. And yet, Berkshire stock still trailed the S&P 500 in 20 of those years, once by as much as 40 percentage points.

Needless to say, most professionals come nowhere close to Buffett's run. Actively managed mutual funds have a poor track record when it comes to beating their benchmarks. Over the past 20 years, 93% of U.S. large-cap stock funds lagged the performance of the S&P 500, according to S&P Global.

There are a lot of reasons that most portfolio managers can't beat the market, but perhaps the most important is that most stocks can't beat the market.

Between 1990 and 2020, more than 55% of all U.S. stocks underperformed risk-free, one-month U.S. Treasury bills, according to Hendrik Bessembinder, professor of finance at Arizona State University's W.P. Carey School of Business. These stocks didn't just lag the S&P 500; they failed to beat cash.

Even more distressing, the entirety of the $76 trillion in net global stock market wealth created over that three-decade period was generated solely by the top-performing 2.4% of stocks.

As Vanguard founder Jack Bogle liked to say: "Don't look for the needle in the haystack. Just buy the haystack!"

It took a while for the investing masses to embrace Bogle's advice, but passive investing finally came into its own. In 2006, S&P 500 ETFs collectively held about $80 billion in assets under management. Today, that figure stands at about $2.7 trillion.

Thanks to their low fees — and a remarkably resilient secular bull market — investors who've settled for "merely" market-matching returns have had a strong run these past 20 years.

The bottom line on S&P 500 ETFs?

Although the Vanguard S&P 500 ETF (VOO) is the largest S&P 500 ETF by assets under management, it didn't begin trading until 2010. Therefore, we're going to go with the granddaddy of them all — the SPDR S&P 500 ETF Trust (SPY) — to see what broad exposure to U.S. equities has done for buy-and-hold types these past two decades.

Have a look at the above chart and you'll see that if you'd put $1,000 into the SPY 20 years ago, it would today be worth more than $8,500. That's good for an annualized return of 11.2%. (The S&P 500's total return — price change plus reinvested dividends — came to 11.3% over the same span. S&P 500 ETFs trail their benchmark because of fees and cash drag from unpaid dividends.)

Since 1928, the market's rolling 20-year compounded annual returns have been as high as 17.7% (1980-1999) and as low as 2.6% (1929-1948), according to Nicholas Colas, co-founder of DataTrek Research.

"The fate of the next 20 years for the S&P 500 is largely reliant on the development of artificial intelligence and whatever innovations come after it, and the ability for U.S. companies to generate substantial profit from these technologies," he notes. "We remain optimistic and are long-term bulls on U.S. large-cap stocks."

More Stocks of the Past 20 Years

• If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today
• If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
• If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have Today

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…

If you find a deal on a PC or tablet, you may want to act fast. Prices will only go up from here.

The memory crunch we warned about in March, which was hammering the smartphone and PC market, has only gotten worse.

Apple’s recent price hikes are the biggest shift in the consumer electronics market so far, with the massively popular brand raising prices 17% to 30% on laptops and tablets. Apple is likely to raise iPhone prices later this year, too. CEO Tim Cook blamed skyrocketing memory chip costs, saying he’s never seen anything like it in 40 years.

"Tight memory supply, due to immense AI infrastructure demand, has pushed prices 3-4 times higher than they were at the end of 2024, with further rises likely," says William Kerwin, an analyst at Morningstar, in a recent research note. “Memory has accounted for about 10% of an iPhone's cost, but inflation threatens to raise the cost of building an iPhone by 20% or more.”

AI infrastructure is hogging the manufacturing capacity of memory chip makers such as Micron, SK Hynix and Samsung. That leaves far less capacity for consumer electronics, causing vendors to scramble and swallow extremely high prices. Any new manufacturing capacity coming online in the near term will be prioritized for AI, not consumer gadgets.

New Apple pricing (Source: Associated Press ):

• MacBook Neo: Now $699, up from $599
• 512-gigabyte MacBook Air: Now $1,299, up from $1,099
• 1-terabyte MacBook Pro: Now $1,999, up from $1,699
• 128-gigabyte iPad Air: Now $749, up from $599
• 256-gigabyte iPad Pro WiFi: Now $1,299, up from $999

It’s hard to predict when the memory price hikes will cool off. "The supply-demand imbalance is expected to persist beyond 2027 in key segments," according to a recent article by Soo Kyoum Kim, an analyst at IDC. "We expect memory inflation to continue through 2028, but for prices to come back down thereafter as new supply comes online,” says Kerwin.

Sellers besides Apple had already been raising prices, and there’s more to come. "We also expect other PC and tablet brands to follow Apple’s example," said David Naranjo, an analyst at CounterPoint Research, in an online post. "They may raise prices on select products, cut discounts on entry-level models, or adjust their product lines to focus more on premium devices."

Consumers and businesses don’t have many options. One strategy is to hold on to PCs and phones longer. Many businesses will do this, extending hardware lifecycles beyond the traditional three to five years, at least for some work devices. That’s not easy to do, since newer models come with more-powerful processors and other improvements, which are often necessary to harness in-demand AI tools.

Used smartphones are another way to save. Refurbished phones are closely inspected and are a great option if you don’t mind a device that is two or three years old. When buying new, trade in your old phone to knock off at least some of the net cost.

Apple’s low-cost laptop, which uses an older iPhone chip, is still a good deal. The Neo’s new price is $700, up from $600. Premium smartphone vendors have low-cost lineups, too, such as the Apple iPhone 17e, Google Pixel 10a and Samsung Galaxy A37 5G. They cost around $450 to $600 (for now).

Shoppers should closely vet the tech specs of devices. Make sure an item that looks like a deal doesn’t come with hidden tradeoffs. A PC priced about the same as last year may come with far less storage, for example. Check new configurations of memory storage and random-access memory (RAM).

For consumers, soaring memory prices may sting the most for external hard drives, used to back up files, photos and videos. Be prepared to do a double-take at how much prices have skyrocketed compared with a year or two ago.

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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When should you take Social Security if you have a pension?

It's one of the most common questions we hear from the retirees we work with at Peak Retirement Planning, where I am the founder and CEO.

The answer is often very different for people in what we call the 2% Club: Retirees who have both a pension and $1 million-plus saved (I wrote a bestselling book on this group — you can request a free copy).

About 20% of Americans have or will have a pension in retirement, and fewer than 10% have saved $1 million or more for their retirement. If you have both, you're in a unique financial position that requires a more customized strategy.

Many retirees without pensions feel pressured to take Social Security as early as possible because they need the income.

However, if you already have a guaranteed income from a pension, your decision may be less about survival and more about optimization, specifically taxes, legacy planning and maximizing lifetime income.

Of course, there's one joke I always make when this topic comes up: "Tell me when you're going to die, and I'll tell you exactly when to take Social Security."

That's ultimately what much of this decision comes down to. Since none of us knows the answer, there are several other key factors pension holders should carefully consider before claiming benefits.

Your health matters more than the math

The first major consideration is your health and life expectancy. If you expect to live into your 80s, 90s or beyond, delaying Social Security will often make sense in the long run. Every year you wait from age 62 to 70 gradually increases your monthly benefit, and in many cases, your age-70 benefit could be nearly double what you would have received at age 62.

The typical "break-even" point, when delaying benefits starts paying off, usually falls between ages 80 and 83.

If your health is poor, your family history suggests a shorter lifespan, or you simply want to maximize the number of checks you receive, claiming earlier may make more sense for your situation.

This is why there's no one-size-fits-all answer. Two retirees with identical retirement balances and pensions could make completely different Social Security decisions based solely on health and longevity expectations.

If you're still working, be careful

Many pension holders retire early, but not everyone does. If you claim Social Security before your full retirement age while still working, your benefits could be temporarily reduced if your earned income exceeds Social Security's annual limits.

That can surprise people who planned to "turn it on" at 62 while continuing to work.

For retirees who stop working earlier, though, this often creates more flexibility and potentially more tax-planning opportunities.

Married couples need to think strategically

Social Security planning is even more important for married couples, and it's crucial to understand how the two benefits work together.

One of the biggest factors is the survivor benefit. When one spouse passes away, the surviving spouse keeps the higher of the two Social Security benefits. That means delaying benefits can sometimes function as a form of longevity insurance for your spouse.

For example, if one spouse waits until age 70 and locks in a significantly larger benefit, that higher amount could continue for the surviving spouse's lifetime.

This matters because of what many advisers call the "widow's penalty." When one spouse dies, the household often loses one Social Security check, but the surviving spouse will also move from married filing jointly tax brackets into single-filer brackets, potentially increasing taxes dramatically. Delaying Social Security can help soften that financial blow.

There's also the spousal benefit to consider. A spouse may be eligible to receive up to half of the other spouse's full retirement age benefit, even if they don't have their own benefit to claim.

One thing to consider is that this benefit maxes out at full retirement age (66 or 67), and delaying past that will only increase your own benefit, not the spousal benefit.

Your pension changes the equation

For retirees with pensions, Social Security decisions often become more flexible because the pension already covers a large portion of living expenses. We see many clients whose pensions replace 70% to 80% of their working income.

Add Social Security and investment withdrawals on top, and they may actually earn as much, if not more, in retirement than while they were working.

This is why many pension holders choose to delay Social Security. Their pension can provide enough income to bridge the gap, allowing Social Security to grow larger in the background.

In some cases, retirees may temporarily withdraw from investment accounts between retirement and age 70, then rely less on those investments once larger Social Security benefits begin.

This can create more flexibility for future healthcare costs, travel, gifting or legacy planning later in retirement.

Taxes are often the biggest factor

For many high-net-worth retirees with pensions, taxes are the biggest consideration in Social Security timing. Many people assume they'll automatically be in a lower tax bracket during retirement, but for pension holders, that's often not true.

A pension creates a steady stream of taxable income, and because of this, we often see their Social Security benefits being the full 85% taxable.

You also have to consider any required minimum distributions (RMDs) from your tax-deferred accounts, which can push your taxable income even higher in retirement.

That's why delaying Social Security can sometimes create a valuable "tax-planning window."

For example, retirees who delay benefits until age 67 or 70 may have several years where income is temporarily lower before Social Security begins. During those years, they may have opportunities to:

• Withdraw money from traditional IRAs at lower tax brackets
• Perform Roth conversions strategically
• Reduce future RMDs
• Lower future tax exposure for surviving spouses

Roth conversions have become increasingly popular among retirees with pensions and large 401(k) balances.

Many retirees have spent decades deferring taxes into their 401(k)s and 403(b)s under the assumption that they'd be in a lower tax bracket in retirement. But pension income changes that equation.

Today's tax rates are historically low by many standards, and a lot of retirees worry that tax rates could rise in the future. This has led some retirees to voluntarily pay taxes now through Roth conversions in exchange for more tax-free income later.

And if those Roth assets eventually pass to children or heirs, distributions can be received income-tax free, potentially reducing the tax burden on the next generation as well.

There is no perfect age

Retirees often want a simple answer: "Should I take Social Security at 62, 67 or 70?"

But the reality is that Social Security planning is deeply personal. The right answer depends on your:

• Health
• Pension income
• Marital status
• Tax situation
• Investment balances
• Legacy goals
• Employment status
• Overall retirement lifestyle

This is why effective retirement planning should never rely on one-size-fits-all rules.

The good news is that retirees with pensions are often in a very strong position financially, and these are all good problems to have.

For many retirees in the 2% Club, retirement becomes less about whether they can retire and more about how to optimize the life savings they've worked so hard for — which is a great place to be.

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

I've chosen to defer my tax payments until I die.

That's not a loophole. It's not evasion. It's a sequence of decisions built on top of existing tax code, executed over decades.

Depreciation is just half the story. The real game is chaining deferrals across a lifetime so you never pay the recapture — and neither do your heirs.

Here's how the sequence works.

The recapture problem

When you sell a depreciated asset, the IRS collects recapture tax at 25%. If you've spent years zeroing out your income through depreciation, the accumulated liability can be enormous.

Sell a $10 million property with $3 million of depreciation taken, and you owe $750,000 in recapture alone, plus capital gains tax on any appreciation.

Every investor eventually asks: Is there a way to avoid triggering recapture?

Yes. Don't sell.

The 1031 exchange: Selling without selling

Section 1031 of the tax code lets you exchange one piece of real estate for another of "like kind" without triggering a taxable event. You use a qualified intermediary who holds the proceeds and transfers them into the replacement property. You never touch the money, so the IRS doesn't treat it as a sale.

"Like kind" is broad for real estate. Apartments for industrial. Retail for ranch land. A duplex for a 50-unit complex. Real estate for real estate.

One critical limitation: Since 2017, you can no longer exchange equipment, vehicles, aircraft or boats. You used to be able to swap your yacht for another yacht, your plane for another plane. That's gone. Real estate is the last category standing.

The growth sequence

The 1031 exchange isn't a one-time move. It's a repeatable mechanism for scaling.

Buy a 10-unit apartment. Operate it, take depreciation, build equity through appreciation and debt paydown. Exchange into a 20-unit. Then 50. Then 100. Each exchange resets depreciation — you get a new cost segregation study on the replacement property — while deferring all prior gains and recapture.

Over a lifetime, this compounds into a large portfolio built substantially with deferred tax dollars.

But bear in mind that these properties aren't mailbox money. Apartments are active businesses with tenants, maintenance, management and capital calls. The tax benefit doesn't change the fact that you're running a business.

The mineral rights exit

At some point, you get tired of being a landlord.

The final 1031 exchange converts real estate holdings into deeded mineral rights. Mineral rights are real property — deeded interests in land — so they qualify for exchange. And unlike apartments, minerals are truly passive: No capital calls, no expenses, no management obligations. Operators drill on your mineral rights and pay you a royalty, typically 10% to 25% of gross revenue. Not profit. Revenue.

That's the endgame. You've gone from active apartment operations to passive mineral royalties without ever triggering a taxable event. Maybe you started when you were 30. Now you're 70. You've deferred all of your income and all of your taxes through your entire investing career.

And then you die.

The generational reset

When assets pass through your estate — not a trust, and that distinction matters — your heirs receive what's called a stepped-up cost basis. The IRS revalues the asset at its current fair market value on the date of death, not the original purchase price.

Here's what that looks like. You bought properties over your lifetime for a combined $1 million. Through decades of 1031 exchanges, appreciation and reinvestment, your portfolio is now worth $30 million. You've deferred millions in recapture and capital gains.

When you die, you and your spouse's heirs inherit the portfolio at a $30 million basis. The prior $1 million basis is gone. The deferred recapture is gone. The capital gains are gone. Your heirs could sell the entire portfolio the next day and owe zero in capital gains tax.

Under the One Big Beautiful Bill Act, the estate tax exemption is now $15 million for individuals and $30 million for married couples, permanently. As long as the total estate is under that threshold, the assets pass to heirs with no estate tax and a full stepped-up basis.

Fair warning: Never place 1031 exchange assets into a trust. Assets must remain in the estate to receive the step-up. If they're in a trust, heirs will inherit the original low basis, and all that deferred recapture comes due. That's the kind of mistake that undoes decades of planning. Coordinate with your estate attorney and CPA.

What could change

It's worth remembering that none of these provisions is guaranteed forever. Bonus depreciation has survived every administration for 25-plus years, across both parties, but it has changed form repeatedly — 50% versus 100%, new-only versus used, permanent versus temporary.

1031 exchange rules already narrowed in 2017 when equipment exchanges were eliminated. The $30 million estate exemption for married couples is new. The stepped-up basis provision has been a target for reform in multiple past legislative proposals.

The strategy works under current law. Build the plan, but keep a pulse on the tax code and be quick to adapt when you must.

The full arc

The sequence is straightforward: Earn income, offset with depreciation, 1031 exchange into larger properties, exchange into minerals, hold until death.

At no point in this chain does a taxable sale occur. Tax deferral, executed correctly across a lifetime, starts to look a lot like tax elimination.

Legally. Across generations.

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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.

Raising financially responsible children means integrating financial education as early as possible.

From helping them save money in their piggy bank in the early years to budgeting larger purchases as they grow older, parents are integral to their children's financial success.

Still, saving for them continues to prove challenging. The cost to raise a child in the United States from birth to age 18 now averages more than $300,000 and is expected to increase.

As prices rise, it is more important to understand the savings options available to support your child's future.

In December 2025, a new form of savings account, 530A Accounts, more commonly known as Trump Accounts, was announced to help parents save for their children's future in a tax-advantaged way.

I'm a CFP® professional, and as more information has emerged about these accounts, my clients have asked questions about the specifics of this investment vehicle and how it fits within their current planning strategies. Here's what I am telling them.

What is a Trump Account?

It's important to understand that these new accounts aren't a replacement for other savings or retirement accounts, such as IRAs and 529 plans, but an additional strategy to complement your current financial plan.

Historically, helping a minor save for retirement has been accomplished in a Uniform Transfer to Minor Act (UTMA) account or a 529 college savings account. Each has benefits and drawbacks.

An UTMA account can help you save for a child's future, but the funds don't become available until the age of majority, which is determined by state law

A 529 is a great vehicle to save for college, but it's limited to that need — otherwise, taxes and penalties apply

While these accounts address the needs of children in their adolescence, there's been little discussion about starting early on their retirement savings. The introduction of the Trump Account addresses this gap but also comes with its own benefits and drawbacks.

What are the benefits and drawbacks of a Trump Account?

Let's start with the good news. Anyone can contribute to a Trump Account on behalf of a beneficiary under 18, including the beneficiary themselves. These contributions are made with after-tax dollars and grow tax-deferred until withdrawn.

Employers can also make tax-free contributions to a Trump Account, up to $2,500 per year.

Contributions are limited to $5,000 per year, per beneficiary and are indexed for inflation. The government might elect to issue a $1,000 grant to help kickstart the account.

Assets in a Trump Account are considered the beneficiary's funds and aren't available to creditors, and the Treasury Department has selected Bank of New York to hold these accounts with the help of broker-dealer Robinhood to develop the new Trump Account app.

There are, however, two distinct limitations to Trump Accounts:

Applicants must have a current U.S.-based address, so parents who live abroad aren't eligible to apply

The seed-money program is limited to children born from January 1, 2025, to December 31, 2028, who are U.S. citizens and have a Social Security number. Money in a Trump Account must be invested in a high-risk U.S. equity index, as opposed to a mix of equities and bonds or a lifecycle fund.

How are Trump Accounts used?

These accounts have strict parameters, chiefly that no withdrawals are permitted before the beneficiary reaches age 18.

Once the beneficiary reaches age 18, their Trump Account is converted to a traditional IRA account and is subject to the same withdrawal rules: Tax-free contributions, appreciation and earnings are taxed as ordinary income.

Withdrawals before age 59½ are subject to a 10% penalty unless one of the following exceptions applies:

• First-time home purchase
• Birth or adoption expenses
• Qualified higher education expense
• Death
• Disability
• Terminal illness
• Health insurance expenses if unemployed
• Some medical expenses

These accounts are also subject to future tax law changes; it might be possible to convert the traditional IRA to a Roth IRA at little to no tax at age 18. If the beneficiary dies during the growth period before turning 18, the account terminates. The income is taxable to "the recipient or to the deceased beneficiary's estate."

Wealthy families might consider these accounts an "extra bucket" after their core planning. Given contribution caps and restrictions, the accounts are best positioned as a supplemental planning tool alongside 529 plans, trusts and retirement vehicles.

Additional questions and answers

How do you get started with a Trump Account? Getting started appears straightforward. You can submit an application at www.trumpaccounts.gov and complete IRS Form 4547. You'll be contacted when it's time to activate your account after the program goes live.

Will Trump Accounts supercharge your children's retirement planning? No. They're simply another long-term savings vehicle that you can set and forget that provides more for your child when they're ready.

Will Trump Accounts work for all families? No, the small pilot program and geographic considerations will initially exclude a large portion of the population, although the overall approach could serve as a smart model that kickstarts retirement planning from birth and shifts the investing landscape for decades to come.

Only time will tell.

Related Content

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• Trump Account App Is Live: How to Claim Your Kid’s $1,000 in 3 Easy Steps
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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.

Investors, traders and speculators observed the end of the second quarter and the first half of the year on Tuesday by extending a holiday-week risk-on rally. Technology took the lead, as chipmakers celebrated their best-ever three-month gain, and another survey suggested consumers are feeling better about the broader economy.

The Philadelphia Semiconductor Index rose more than 80% from April through June on demand for chips, hardware and memory to sustain a revolutionary buildout for artificial intelligence (AI) infrastructure.

The index of semiconductor stocks is up more than 90% so far in 2026, putting it on track for its best performance since the peak of the dot-com boom in the late 1990s and early 2000s.

At the closing bell, the Nasdaq Composite was up 1.5% at 26,213. The tech-heavy index shed 2.8% in June, but it was higher by 21.4% for the second quarter and has added 12.8% so far in 2026.

The S&P 500 added 0.8% to 7,499, leaving the broad-based index down 1.1% for the month, but up 14.9% for the quarter and 9.5% for the year.

The Dow Jones Industrial Average inched up 0.3% to 52,317, a second straight all-time closing high. The blue-chip index was higher by 2.5% in June, also notching a new all-time monthly closing high.

Papa Dow, 130 years old as of May 26, added 12.9% in the second quarter and 8.9% during the first six months of the year.

Friday, July 3, is a stock market holiday, with the stock and bond markets closed to observe the Fourth of July.

An update on the confidence game

The front-month West Texas Intermediate crude oil futures contract was down 0.9% to $70.09 per barrel on Tuesday, as the U.S. and Iran continue to negotiate a durable truce that will unclog the Strait of Hormuz.

WTI traded at $67.02 on February 27, the day before the war in the Middle East began, and $101.38 on March 31. The North American oil benchmark has now declined by more than 40% from its wartime peak of $119.48 on March 9.

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In a related development, The Conference Board Consumer Confidence Index printed at 91.2 this month vs 90.6 in May. The survey was conducted between June 1 and June 23.

According to The Conference Board Chief Economist Dana Peterson, "Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears."

Good defense was the best way to play offense today

AeroVironment (AVAV, +18.8%) showed why it's one of the best defense stocks to buy right now when the dronemaker reported better-than-expected quarterly results but lighter-than-forecast annual guidance after the closing bell on Monday.

AVAV retraced much of a year-to-date decline of more than 40%, as markets recognized solid numbers in the aggregate amid management's efforts to recover from the loss of a government contract and fix the impact of an accounting error that resulted in a goodwill-related impairment charge.

AeroVironment posted fiscal fourth-quarter earnings of $1.84 per share on revenue of $642 million vs a Wall Street forecast for EPS of $1.46 on revenue of $556 million. Management guided to EPS of $3.02 to $3.34 on revenue of $2.1 billion to $2.2 billion for fiscal 2027, while analysts see EPS of $3.84 on revenue of $2.2 billion.

“Fiscal 2026 marked a transformational year for AV," CEO Wahid Nawabi said in a statement, noting that his company is "well-positioned to capture the rising global demand across lethal and non-lethal drones, counter-UAS, space and advanced technologies."

CNXC adjusts its targets

Concentrix (CNXC, -11.2%) seemed to confirm market concerns about the effects of AI-based tools on companies that provide software-based customer experience and business outsourcing services, as management cut its top- and bottom-line guidance for the coming quarter and the full fiscal year.

Concentrix, an industrial stock that actually includes "scaling secure AI technologies" among its professional services capabilities, reported a narrow second-quarter miss: EPS of $2.63 on revenue of $2.46 billion against a consensus estimate of $2.64 on $2.47 billion.

But markets, all forward-looking here, focused on third-quarter EPS guidance of $2.65 to $2.77 on revenue of $2.465 billion to $2.490 billion against a consensus EPS estimate of $3.08 on revenue of $2.53 billion.

That's short almost 14% at the midpoint for the bottom line, 2% at the top. And full-year EPS guidance is short about 7% at the midpoint vs Wall Street's forecast, while revenue guidance shows a 1% expectations deficit.

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Jobs data has "been moving in a good direction," said Federal Reserve Chair Kevin Warsh in his June 17 press conference, his first as head of the central bank. Indeed, the U.S. has added 569,000 new jobs so far in 2026, or 113,800 per month on average.

However, job growth "continues to be narrow," notes David Payne, staff economist and reporter for The Kiplinger Letter, in the Kiplinger jobs outlook, as "100,000 of the total gain in May occurred in just two sectors: food service and local government."

Still, Payne believes the strength we've seen since March "should dispel concerns at the Federal Reserve that the economy might be weakening."

We'll get the latest nonfarm payrolls report this Thursday, when the Labor Department releases the June jobs figures. The data are usually reported on Friday, but July 3 is a federal and stock market holiday in 2026 as Independence Day falls on a Saturday this year.

When is the next jobs report?

The Bureau of Labor Statistics will release the next jobs report at 8:30 am Eastern Standard Time on Thursday, July 2. Economists expect the U.S. to have added 115,000 new jobs in June and the unemployment rate to have remained 4.3%.

Ahead of the June jobs report, we looked at what economists, strategists and other experts on Wall Street expect the data to show and what the results could mean for the Fed and investors going forward. You'll find these outlooks, edited at times for brevity, below.

What to expect from the June jobs report

"Investors should expect an unchanged unemployment rate at 4.3% and nonfarm payroll growth in the range of 87k for June. Although a step down from May's 172k, this would be a strong result for a 'low-hire, low-fire' labor market. While labor conditions remain broadly intact, the Fed's focus has shifted toward inflation, meaning the timing of any future easing will likely depend more on inflation pressures than payroll growth." - Jason Pride, Chief of Investment Strategy & Research, and Michael Reynolds, Vice President of Investment Strategy, at Glenmede

"After three solid months, we expect June payrolls to also rise by a robust 110k (private: 120k), supported by benign claims and strong ADP data. That said, we see downside risks: May's surge in leisure & hospitality may have been driven by the World Cup or Memorial Day timing, and if it was the latter, June could see payback. We could also see a large reversal in local government jobs after May's outsized gain. We expect the unemployment rate to remain at 4.3%, though continued strength in household employment could push it down to 4.2%. A strong report would likely move markets closer to our call for three hikes in 2026." - Shruti Mishra, U.S. economist at BofA Securities

"The U.S. non-farm payrolls report is the week's key event, with markets looking for confirmation that the labor market remains resilient. Following Kevin Warsh's first Federal Reserve meeting, investors are likely to have become more sensitive to incoming data, particularly any signs that inflationary pressures remain embedded in the economy. A stronger labor market would reinforce expectations that the Fed can afford to keep policy restrictive for longer, while a softer reading could prompt markets to reassess the likelihood of further tightening." - Daniela Hathorn, senior market analyst at Capital.com

"During this shortened Fourth of July holiday week, we look forward to the June employment report, which once again looks to be solid with market expectations for a 113,000 increase in jobs. If the breakeven level of payrolls really now is closer to zero, as many at the Fed now believe, such strength should result in a dip in the unemployment rate to 4.2%. We also continue to look for answers to what is causing the sharp fall in wages for healthcare workers. The index weight is significant and pulling down the aggregate index." - Richard de Chazal, macro analyst, and Louis Mukama, equity research associate at William Blair

"The labor market continues to stabilize after its swoon in 2025. Initial jobless claims are low and regional Fed employment PMIs point to some modest firming in hiring in June. That said, other indicators have softened recently. Indeed job postings and ADP's weekly hiring measure have both turned down since the spring, while small business hiring plans fell to a fresh cycle low in May. Taken together, the data suggest labor demand is holding roughly steady rather than re-accelerating in a meaningful way." - Wells Fargo economists

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You've built a retirement nest egg and are ready to retire.

Congratulations! You've done the hard work. But now it's time for the nitty-gritty details that can make a major difference in how much of your retirement income you actually get to spend on yourself … and how much you have to share with Uncle Sam.

Most retirement planning conversations focus on what to invest in — or asset allocation. Far fewer address something equally important: where to hold those investments, or asset location.

In your working years, asset location is mostly about building wealth efficiently and avoiding realized capital gains. In retirement, it shifts to a different priority: generating income with the least possible tax friction.

Different income-generating investments are taxed at very different rates. Some, for instance, are taxed as ordinary income at marginal rates as high as 37%. Other investment income qualifies for preferential treatment and are taxed at rates of 0%, 15%, or 20%.

If you're like most investors, your wealth is spread across a variety of sources, including IRAs, Roth IRAs, corporate 401(k) plans and regular taxable brokerage accounts.

Today, we're going to cover how to distribute your investments across these accounts to make the most of the tax code. Getting this right might make the difference between retiring in style and just getting by.

What is "investment income" exactly?

We should start with a fundamental question. What is investment income?

Traditionally, this has referred to dividends from stocks and interest from bonds. But over the past quarter century, most of which saw yields on traditional income investments at historic lows, many investors and financial advisers have taken a broader view that includes sales of appreciated investments.

Your Nvidia (NVDA) or Microsoft (MSFT) shares aren't likely to ever pay you meaningful dividends, but you can always sell shares to generate cash.

Short-term capital gains — along with interest on bonds, certificates of deposit (CDs) or savings accounts — are taxed at your marginal tax rate. Depending on your income tax bracket, that could be as high as 37%.

Long-term capital gains — along with qualified dividends — are taxed at preferential rates of 0%, 15%, or 20% depending on your income bracket.

Married couples filing jointly who make up to $98,900 pay zero on their qualified dividends and long-term capital gains. Couples with taxable income between $98,900 and $613,700 pay 15%. And couples with taxable income over $613,700 pay 20%.

What goes where?

Now for the details.

There are three buckets: taxable accounts, traditional IRAs and 401(k) plans, and Roth IRAs and Roth 401(k) plans.

The Roth accounts, which allow you to make after-tax contributions to your retirement account, are clearly the cleanest. You pay no taxes on any income as it is earned — dividends, interest, capital gains, etc. — and your distributions are also tax-free. In a perfect world, your entire nest egg would be invested in a Roth account.

Unfortunately, that's not going to be the case for most investors. Due to income limitations in your earnings years, Roth accounts tend to be relatively small for most retirees.

Regardless, this is where you should put your most tax-efficient investments. Bonds, stocks that pay non-qualified dividends such as real estate investment trusts (REITs), and strategies that throw off a lot of short-term capital gains should all be prioritized for your Roth accounts.

The math gets a little more complicated for traditional IRAs or 401(k) plans. You owe no taxes on investment gains, but your distributions are taxable as ordinary income.

Here's where the math comes in. Let's say you make about $90,000 with your spouse. You'd qualify for the 0% qualified dividend rate, but you'd be in the 12% bracket for ordinary income. The last thing you'd want to do is "convert" your tax-free dividends into taxable ordinary income, but that's exactly what would happen for qualified dividend income that you distributed from your IRA.

It gets even more extreme at higher brackets. Those dividends you might normally owe 15% to 20% on could get taxed at 35% or more.

So, to the extent possible, try to keep your qualified dividend stocks and investments that you're planning to sell at long-term capital gains in your taxable account and use your traditional retirement accounts to hold any tax-inefficient investments you didn't have room for in your Roth accounts.

As for your taxable account, this is a great place to hold positions you plan to sell for long-term capital gains (or never sell at all) or qualified dividend stocks.

Of course, the "ideal" asset location may not always be possible. Perhaps a disproportionately large share of your portfolio is in an IRA account, and you simply don't have anywhere else to hold your core dividend payers or the stocks you plan to sell for long-term capital gains.

If so, don't worry. You should remind yourself that you already received a tax break when you contributed to the IRA, and that all of your earnings over the years have also been tax-free. If you pay a little more tax than ideal on your distributions, those other benefits almost certainly made you come out ahead.

You also shouldn't let taxes alone drive your investment decisions. Taxes are a factor. A big factor, in fact. But overall asset allocation is clearly more important than asset location in managing risk and avoiding potentially catastrophic losses.

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We've all seen and heard ads for assisted living facilities in newspapers and online and on the radio and television.

But until a family member has a stroke or some other physical or cognitive impairment, most of us don't know very much about how assisted living, senior living or memory care facilities work. Or, to be specific, how they are supposed to work and what red flags look like.

I sure didn't either, until "Julie," a close family friend, became the victim of medical malpractice. Following a "simple" operation, the 62-year-old retired teacher's electrolyte chemistry wasn't properly monitored, resulting in dangerously low blood calcium levels that triggered muscle spasms, convulsions, seizures, a coma and brain damage.

She now can't walk or use the bathroom without assistance, needs someone to help her eat and has significant cognitive impairment. For the past three years, she has been living in a studio room at an assisted living facility that is part of a nationwide operation.

The facility claims to provide, among other things, 24-hour care and support, food prepared by a chef, an on-site restaurant where families are welcome to dine as well and much more.

These amenities are common in the industry. But in Julie's case, the reality appears far different. Each time we visit, we see a care facility for older people and the infirm racing downhill while monthly charges are increasing.

How cost-cutting harms residents

"It is more than a reduction in the services for people like Julie, who is effectively bedridden. They are putting residents' lives at risk," said "Suzanne," who works at Julie's facility. With my assurance that she could speak freely and confidentially, she described what happens when profits and cost-cutting come first.

I learned from Suzanne that what is happening here is not a rarity in this business and that red flags are everywhere — if you know where to look and ask questions.

'They stopped caring'

"I have been in this field for over 25 years, and this is the third assisted living facility I've worked at, some from opening day," Suzanne said. "Most start out in full compliance with all the promises listed in their contract and then gradually limit services.

"When Julie first came here, things were top-notch. But over the past year, the lack of contractually promised care has fallen dangerously."

Suzanne told me about:

• Residents who push the emergency call button they wear around their necks and wait over an hour for someone to respond: "Some have fallen, can't get up, and it is so sad to see this."
• A failure to conduct frequent, daily checks on patients: "Recently, one gentleman had been dead in his bed for hours."
• While contracts and brochures described chef-prepared meals, some meals were actually cooked by a handyman. The menu, which offered a variety of meals catering to all sorts of residents, has been slashed by over half, and people are upset. Portion size has been reduced because of cost-cutting, leaving many residents hungry.
• Most of the servers have been fired from the restaurant where families could have meals with residents. People are told to immediately leave the premises after eating, and tips left on the table are being taken by managers.
• Managers routinely take cash donations from families that are intended for holiday and other staff parties. One spouse became furious when they asked a staff member, "So how was the party we all paid for?" and heard, "What party?"

Before you sign a contract

When an assisted living facility's sales department gives you the opportunity to visit, make sure you look closely at three primary areas:

• Residents' well-being
• Staff interactions
• Cleanliness

Red flags include:

• High staff turnover
• Residents who appear unkempt
• Management who will not give you a straight answer

After speaking with Suzanne and seeing the situation for ourselves, it's clear you should also try to make unannounced visits by yourself and with other family members, at different times of the day, observing how staff interact with residents.

Speak with residents and their families if possible. Ask them what they like — and what they dislike.

There is a massive amount of highly useful information available online. You should print out the AARP Assisted Living Checklist and go through it with the sales staff at every facility you visit.

Each time we visit Julie, many of the other residents of the facility seem to be longing for human contact. Yes, science and medicine keep them all alive. But are they?

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.

Among affluent investors, few words are more powerful than "exclusive."

The appeal is not simply the exclusive investment itself, but the feeling that comes with access to something unavailable to most people.

That emotional pull is understandable. Scarcity creates perceived value in nearly every area of life, and investing is no exception. But investors should recognize that exclusivity itself can carry costs — what some advisers think of as an "exclusivity premium."

In wealth management, exclusivity can take many forms — private credit funds, invitation-only investment opportunities, private real estate deals, hedge funds, venture capital allocations and other alternatives available primarily to high-net-worth investors.

The exclusivity premium can appear in the form of higher fees, reduced liquidity, delayed tax reporting, complex partnership structures or capital locked up for years at a time.

In some cases, after accounting for those tradeoffs, investors might discover they've accepted more complexity without meaningfully improving long-term outcomes.

Understand your motivations

Some private investments can play a valuable role in a diversified portfolio, particularly for investors with significant assets, long time horizons or specialized goals. But too often, investors evaluate these opportunities through the lens of access and sophistication before evaluating whether the investment improves their financial plan.

It's a distinction that matters.

In the past decade, the growth of private markets has coincided with increasing demand from wealthy investors seeking opportunities outside traditional stocks and bonds. The pitch is often framed around exclusivity — limited capacity, restricted access, institutional-quality investments and opportunities not available to ordinary investors.

Sometimes those opportunities are worthwhile. Sometimes they're ordinary financial activities wrapped in elite branding.

Private credit offers a useful example. At its core, private credit is fundamentally the business of lending money against collateral. That can generate attractive yields under the right circumstances.

But investors should remember that lending itself is one of the oldest and most established activities in finance. There's nothing inherently superior about an investment simply because it's less accessible or less transparent.

Consider investing alternatives

Meanwhile, many investors overlook what might be the most extraordinary long-term wealth-building vehicle already available to them: Ownership in the world's great public companies.

The companies in the S&P 500 became dominant not because they were marketed as exclusive, but because they successfully competed in global markets over long periods of time. They generate real earnings, serve billions of customers, invest heavily in innovation and operate under constant public scrutiny.

Through low-cost index funds and increasingly sophisticated strategies such as direct indexing, investors can own highly diversified portfolios that are liquid, transparent and tax efficient.

Direct indexing offers an interesting contrast to many private investments. Rather than adding complexity through lockups and opaque structures, it allows investors to harvest tax losses at the individual security level while maintaining broad market exposure.

It's a sophisticated strategy, but one built around efficiency and flexibility rather than exclusivity.

Yet, simplicity often struggles to compete psychologically with exclusivity.

Many investors assume that if an opportunity is harder to access, it must offer higher rewards. Wealth managers aren't immune to these incentives. Complex investments can sometimes create the perception of greater customization or expertise, even when a simpler approach might better serve a client's long-term objectives.

Understand the entire picture

Investors should pause before committing capital to "exclusive" opportunities and ask a more foundational question: Does this investment genuinely improve the long-term plan, or does it primarily satisfy the emotional appeal of access, scarcity and sophistication?

Investment decisions are rarely driven by numbers alone. Status signaling, scarcity bias and the desire for insider access can all influence judgment, particularly among affluent investors accustomed to exclusive experiences in other areas of life.

The goal is not to eliminate emotion from investing, but rather to recognize when emotional appeal begins substituting for disciplined decision-making.

For many wealthy families, the most effective long-term strategy might involve owning productive businesses, minimizing unnecessary costs, maintaining tax efficiency and remaining invested over long periods of time.

That approach might sound boring compared with the latest private-market opportunity, but over decades, boring has historically compounded remarkably well.

The next exclusive investment opportunity will always arrive. The more important question is whether it truly advances the investor's financial goals — or merely offers the feeling of being invited into the room.

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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.

AI has already affected how we learn, work and govern ourselves much faster than research, regulation or nonprofits can keep pace.

While businesses and governments scramble to respond, philanthropists hold a distinct and underutilized advantage: The flexibility to fund what others won't, invest where we still need evidence and work across sectors without commercial pressure.

Here is how to leverage your advantages as a donor.

1. Sharpen your nonprofit due diligence

AI-generated misinformation makes vetting organizations harder than ever. Donors can raise their standards by:

• Identifying ratings from Charity Navigator, the BBB Wise Giving Alliance and GuideStar's Seals of Transparency before committing funds
• Visiting local organizations in person — no rating system replaces direct observation of a program in action
• Asking nonprofits you regularly support how they manage AI-related data risks before your next significant gift conversation

2. Fund nonprofit AI capacity — not just programs

Most nonprofits use AI primarily for basic productivity: Drafting emails, summarizing meetings, writing grant applications. The real leverage lies in mission-critical AI deployment — but getting there requires infrastructure most nonprofits lack, and the risks of moving forward without it remain severe.

Unlike corporations, nonprofits face the same cybersecurity vulnerabilities with far fewer resources. They routinely manage donor financial data, personally identifiable information, health records and confidential beneficiary files.

Large language models like ChatGPT and Claude collect and store user data indefinitely — meaning a nonprofit that uploads sensitive files to an AI platform may lose ownership of that data entirely.

Cybercriminals also actively use AI to make attacks harder to detect. A single breach can devastate fundraising, damage community trust and trigger regulatory consequences under state, federal or international privacy law.

To empower nonprofits to function effectively with AI, you may:

• Fund general technology budgets. IT infrastructure upgrades remain chronically underfunded, yet are essential for safe and effective AI use. Consider directing unrestricted gifts specifically toward this gap.
• Sponsor AI education and policy development. Nonprofit leaders identify four priorities: Staff training on AI fundamentals, dedicated software funding, technical development opportunities and guidance on how AI affects the communities they serve.

As a result, you can free up charities to make truly transformational changes. For instance, the MacArthur Foundation's recent $100 million award funded an AI-driven global infectious disease surveillance system, a model for what becomes possible with the right infrastructure in place.

3. Support publicly available AI research

It has become clear that AI will affect jobs across every sector — augmenting some roles, restructuring others and eliminating others. Yet workforce impact data remains fragmented, with no uniform standards for measuring AI exposure, adoption or economic effect across sectors.

Educators and employers commonly agree that student preparation for an AI-embedded future entails independent decision-making, problem-solving and media literacy, rather than task completion. In essence, students need to be taught how to think, not what to think.

However, educators have had to make high-stakes technology adoption decisions with insufficient evidence.

As labor markets shift, demand will rise for portable access to healthcare, education and job retraining.

For instance, potential ideas such as portable benefits, decoupling health insurance and retirement savings from traditional employment, require rigorous, publicly available research to move from concept to viable policy.

As a result, AI research remains "in the first inning."

Donors can accelerate the learning curve to keep up with industrial changes by:

• Funding research based on multiple perspectives, including those of teachers, parents and students, on AI's impact on learning
• Prioritize studies that remain open to the public, so other researchers can replicate and build on findings
• Support workforce transition research, particularly around portable benefits and safety-net access for workers in AI-disrupted industries

4. Strengthen civic voices in developing AI policy

Most workers and communities recognize the efficiencies offered by AI, understand their benefits and don't want to eliminate them.

Instead, they simply want a seat at the table in deciding how AI applies to them. In fact, more than half of U.S. adults (55%) say they want greater control over AI in their lives.

That demand extends to transparency about AI's environmental footprint and corporate accountability on data privacy.

Philanthropy has a direct role in amplifying a community's civic voice by:

• Funding local and independent journalism to ensure communities receive accurate, accessible information about AI's local implications
• Supporting civic participation initiatives that bring residents, not just industries, into community-level AI policy and land-use decisions

5. Align your financial investments with your philanthropic goals

Ideally, your investment portfolio and your philanthropic priorities would reinforce, and not negate, each other. Accounting for environmental, social and governance factors may improve long-term returns by unlocking value and achieving resilient, long-term investment success.

You can adjust your investment and philanthropy alignment by:

• Reviewing your current AI-related holdings and their impacts in the areas that you care about most as a philanthropist
• Consulting with your investment adviser on frameworks for considering environmental, social and corporate governance factors

6. Team up with other donors

AI's societal scale exceeds what any single donor can address. Philanthropists who coordinate with peers can multiply their impact, reduce duplication and gain access to shared due diligence.

In collaborating with other donors, you may:

• Explore foundation coalitions like Humanity AI to review their vetted grantee list and potentially identify organizations aligned with your priorities
• Join or convene a donor working group focused on AI's impact in your areas of giving — education, workforce, health or civic participation

The philanthropists who move now can help influence AI for good. In funding research, nonprofit capacity and broad civic engagement and working with other donors, you can advance the positive impact of AI and mitigate its challenges for decades ahead.

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

The main equity indexes gapped up, slumped briefly, then surged again to start a holiday-shortened week on a positive note. The Nasdaq Composite and the S&P 500 ended their respective five-session losing streaks during a risk-on rally that also lifted the Dow Jones Industrial Average to its first-ever close above 52,000.

"We typically rally into holiday weekends," Louis Navellier of Navellier & Associates observes, "and it would be downright un-American not to be optimistic heading into the Fourth of July, especially considering it is the 250-year anniversary celebration."

Friday, July 3, is a stock market holiday, with the stock and bond markets closed to observe the Fourth of July.

As Navellier explains, the market is also benefiting from a realignment of the Russell 2000 Index and resulting demand for small-cap stocks and mid-cap stocks. "Additionally," he writes, "SpaceX (SPCX, +7.2%) was added to the Russell 1000 at the start of the week."

Navellier expects "fundamentally superior stocks" to enjoy a collective bounce "from institutional investors making their portfolios 'extra pretty' before they do their quarter-end reviews."

Comcast breaks up

Communication services stocks paced the rally at a sector level after Comcast (CMCSA, +4.5%) announced a plan to spin off NBCUniversal and Sky into a separate publicly traded company.

"Comcast will continue to build on its leadership in connectivity," co-CEO Mike Cavanaugh said in a statement announcing the split, "while NBCUniversal, together with Sky, will have the scale, brands, content and financial resources to compete as a premier global media and entertainment company."

Charter Communications (CHTR, +9.4%), a rumored acquisition target for Comcast's connectivity business amid a merger market that's heating up, was among the top-performing S&P 500 stocks on Monday.

Another sector stalwart, Alphabet (GOOGL, +4.8%), was among the top-performing Dow Jones stocks during its first trading day as a member of that price-weighted index. Verizon Communications (VZ, -5.3%), removed from the Dow to make room for GOOGL, fell sharply.

At the closing bell, the tech-heavy Nasdaq Composite was up 2.1% to 25,820, the broad-based S&P 500 had added 1.2% at 7,440, and the blue-chip Dow Jones Industrial Average was higher by 0.6% to 52,182.

Will a World Cup stock score this week?

It's a mostly quiet week on the earnings calendar, except for Nike (NKE, +1.8%). Down 35% year to date through Friday, one of Wall Street's top World Cup stock picks will report fiscal fourth-quarter results after the closing bell on Tuesday.

Stifel analyst Peter McGoldrick is "not ready to call a bottom" for NKE stock. "Our thesis states dominant market position is unlikely to translate to value creation absent 1) a favorable change in consumer preference, or 2) a reinvigoration of the innovation pipeline at scale," McGoldrick writes.

The analyst reiterated his Hold rating on the consumer discretionary stock but cut his 12-month target price from $56 to $50, citing lackluster performance and erosion of its share of the athletic market.

According to McGoldrick, "Investors will focus on FY27 guidance, capacity for topline growth, and EBIT margin rebound from trough levels in FY26." At the same time, he notes, management has little incentive to raise expectations before its traditional investor day in the fall.

Supreme Court says the Fed might be exceptional

The Supreme Court ruled on Monday that President Donald Trump can fire Federal Trade Commissioner Rebecca Slaughter. But can President Trump fire Fed Governor Lisa Cook? Well, no, at least not yet.

Writing for a 5-4 majority in Trump v. Cook (pdf), Chief Justice John Roberts said the Trump administration's interpretation of the law "would in effect transform the Federal Reserve's for-cause protection into at-will employment — 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.

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.

"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. In this opinion, we have not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards."

In a separate 6-3 decision, the Court abandoned a 91-year-old precedent and expanded President Trump's authority over (most) of the executive branch.

"If anything more is left of Humphrey's," Roberts wrote for the majority, referring to the 1935 decision in Humphrey's Executor v. United States that established a principle of independence for federal agencies, "we overrule it."

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In 1889, German Chancellor Otto von Bismarck introduced the world's first state pension system and set the retirement age at 70. Life expectancy in Germany at the time was about 45 years. The math was no coincidence.

Bismarck was not building a reward for a life well lived. He was building a political instrument to neutralize the rising socialist movement, calibrated so that most workers would die before collecting a single mark.

The pension was designed to be a promise rarely kept. From its very first institutional expression, retirement was a financial mechanism dressed as a social good.

Forty-six years later, Franklin Roosevelt signed the Social Security Act into law. The eligibility age was 65. Male life expectancy in 1935 was about 60. The architecture was identical to Bismarck's: A safety net mathematically designed to catch relatively few.

Social Security was not a life plan. It was a financial stabilizer for an economy in collapse, and the age of eligibility was set with actuarial precision, not with any concept of what a person might do with 20 or 30 years of post-work life.

Then came the turn that changed everything.

In 1978, Congress added a modest provision to the Internal Revenue Code. Section 401(k) was 11 lines of tax language that almost no one noticed. Ted Benna, a benefits consultant in Pennsylvania, noticed. In 1980, he proposed the first employer-matched savings plan based on that provision, and the modern retirement savings industry was born.

The shift was seismic: Retirement funding moved from employer obligation, the pension, to individual accumulation. The worker was now responsible for building the number.

That transfer of responsibility did something the pension system never did. It put the individual in a direct, daily, emotionally charged relationship with a portfolio balance. It gave the financial services industry its central organizing principle: Retirement success is a number, and that number is never quite large enough.

It created an entire professional class, from insurance agents to financial planners to retirement specialists, each iteration more sophisticated in its tools, each iteration asking the same foundational question: How much money do you have, and is it enough?

What none of these three moments asked, not Bismarck in 1889, not Roosevelt in 1935, not Benna in 1978, was the question that actually governs the quality of a retirement: When you stop working, what does a meaningful life require?

That question has never had a commission. It has never generated a tax provision. It has never had a lobby in Washington or a continuing education requirement for financial planning certification.

And so, 135 years after Bismarck set the retirement age above the average life expectancy, the industry built to serve retirees remains, at its structural core, a financial instrument trying to answer a human question it was never designed to address.

The inherited blind spot

The financial planning industry did not choose this blind spot; it inherited it.

Every professional designation that followed Bismarck's pension, including the insurance agent, the financial planner and the retirement specialist, was built on the same foundational assumption — that retirement is primarily a financial problem.

The tools grew more sophisticated with each generation. Actuarial tables gave way to mutual funds, which in turn gave way to Monte Carlo simulations and dynamic withdrawal strategies. The vocabulary grew more precise. The question at the center never changed.

That question is: Do you have enough money?

It is not a bad question. It is, in fact, an important one. But it is not the question that determines the quality of a retirement. A Monte Carlo simulation will tell you the probability that your portfolio survives 30 years of withdrawals. It will not tell you whether those 30 years will be worth living.

The industry has spent 135 years building extraordinarily precise tools to answer the first question, leaving the second entirely to chance.

The research does not support this prioritization.

The Harvard Study of Adult Development, the longest longitudinal study of human flourishing, followed participants for more than 80 years and reached a conclusion that no financial model has yet incorporated: The quality of your relationships, not the size of your portfolio, is the strongest predictor of health and happiness in later life.

The U.S. Surgeon General's 2023 advisory on loneliness found that social isolation carries health consequences equivalent to smoking 15 cigarettes a day.

Neither finding appears on a retirement planning checklist.

This is the imbalance: The industry measures what is measurable and optimizes for what it can quantify. Purpose is not quantifiable. Connection is not quantifiable.

Identity, meaning and the sense of contributing to something larger than yourself — none of these appears on a balance sheet. As a result, they are treated as secondary concerns, the soft variables that retirees will presumably sort out on their own once the financial plan is secured.

They do not sort themselves out. That is precisely the problem.

Here is the distinction the industry has never institutionalized, though the evidence demands it: Money is a subset of wealth, not the other way around. A portfolio is a tool. Wealth is the life the tool is designed to support. When the tool becomes the goal, the plan is already upside down.

When a retiree's sense of security lives in a balance that shifts every trading day, when market volatility becomes emotional weather, when a 2% drop on a Tuesday ruins the week, the financial plan has not failed. It has simply filled a vacuum that a life plan was supposed to occupy.

The sequence matters. Define the life first. Fund it second. Most retirees receive the reverse: A detailed financial plan and a life plan left as an afterthought, assembled from whatever is left after the spreadsheet is finished.

Money builds the structure of retirement. It does not fill that structure with anything worth waking up for. That work belongs to a different kind of planning, one that the industry, by design, has never been equipped to provide.

The same couple, two retirements

Meet Paul and Sandra. Paul retired at 65 after 32 years in corporate operations. Sandra spent most of those years raising their three children and working part-time as a bookkeeper. They have $1.4 million in retirement savings, a paid-off home in the suburbs, and Social Security that covers their fixed expenses. Their financial adviser has told them, with confidence, that they are in good shape.

By every metric the industry uses, they are. The question is what "fine" feels like from the inside.

Take one
Paul checks the portfolio before coffee. Not because anything requires him to, but because the number has become his first point of reference for how the day will go. On a Monday in early October, the market opens 2.3% lower. Paul watches it for 40 minutes before Sandra comes downstairs. She asks about their trip to Portugal, which they have been planning for two years. Paul says they should wait and see how the fourth quarter looks.

They have been waiting to see how the quarter looks for eight months.

The evening news runs a segment on recession indicators. Paul records it to watch again. He brings it up at dinner, at breakfast the next morning, and on a Saturday phone call with his brother. Sandra has stopped asking about Portugal.

Their financial adviser calls to discuss sequence-of-returns risk. Paul cannot stop thinking about it. He lies awake, calculating whether they should move a portion of the portfolio to cash. He has run that calculation 14 times. The answer has been the same each time. He runs it again.

Paul and Sandra are not struggling financially. They are struggling with something the financial plan never addressed: What the money is for.

Without an answer to that question, the money becomes the answer. The balance becomes the scoreboard. A scoreboard that moves every trading day is a very poor place to anchor a life.

Take two
Same Paul. Same Sandra. Same $1.4 million.

Six months before Paul's retirement date, their financial adviser introduced a different kind of conversation. Not what the portfolio would look like in retirement, but what their life would look like.

• What would Tuesday look like?
• What did October mean to them?
• What did Sandra want that the working years had never allowed?
• What did Paul need that a paycheck had been substituting for?

They spent three sessions designing the answer.

By the time Paul retired, Portugal was already booked for September. He had already committed to mentoring two young men from their church on Wednesday mornings. Sandra had enrolled in a watercolor class at the community center and arranged to spend Fridays with their grandchildren. Their calendar had shape before it had any vacancies.

When the market fell 2.3% in early October, Paul's adviser called to check in. Paul asked two questions, listened, then returned to the project he was building in the garage. He did not check the balance that evening. He did not need to. The balance was not the point.

The money in this scenario did not change. The relationship to the money changed entirely. Paul and Sandra's sense of security does not live in a number that moves every trading day. It lives in a life designed before the market opened.

Their financial plan is a foundation, not a scoreboard. It answers to something larger than itself. That distinction, between a portfolio that governs a retirement and one that funds it, is the difference the industry has never been structurally equipped to provide.

The question worth asking first

The remedy is not to abandon financial planning but to assign it the right role.

A financial plan is an instrument. Like any instrument, it is only as useful as the purpose it serves. A hammer in a house with no blueprint is not a building tool; it is a very expensive paperweight. The 401(k), the withdrawal strategy and the Monte Carlo simulation — these are precision instruments. They deserve a life plan to serve.

That life plan begins with questions the industry was never trained to ask:

• What does a meaningful Tuesday look like at 70?
• Who depends on you, and for what?
• What did the working years crowd out that is still waiting?
• What structure will replace the one work provided automatically for 30 or 40 years?

These are not soft questions. They are the load-bearing questions of a successful retirement, and they belong at the front of the planning conversation, not appended to the end of a spreadsheet.

The areas that research consistently identifies as essential to retirement well-being — physical health, meaningful engagement, intellectual challenge, emotional connection and a sense of purpose larger than oneself — do not appear in a financial plan because they cannot be quantified.

That is not a reason to leave them unplanned. It is the strongest reason to plan them deliberately, in writing, before the financial adviser runs the first projection.

Paul and Sandra in take two did not have more money than Paul and Sandra in take one. They had a better question. Because they answered it before retirement began, the market's daily movements became information rather than identity.

Bismarck built a system to manage a financial liability. Roosevelt built a system to stabilize a collapsing economy. Benna built a system to fund individual accumulation. None of them built a system for the life that accumulation was meant to support. That gap has persisted for 135 years and will not close on its own.

In the encore years, the most consequential decision you make is not which funds to hold or when to claim Social Security. It is whether you allow a financial plan to substitute for a life plan, or insist that the financial plan answer to one.

Money builds the structure of retirement. You are responsible for everything inside it.

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

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

Gray divorce refers to couples splitting after age 50, and it's more common than people think.

Pew Research Center found that the divorce rate for Americans 50 and older has roughly doubled since 1990. And it's even higher for those 65 and up.

The stakes are different when you divorce later in life. There's less time to rebuild savings and more healthcare costs to plan for. Doing your homework before you file for a gray divorce can mean the difference between a secure retirement and scrambling to make ends meet.

Here's how to prepare.

1. Review your finances

To start with, have a clear picture of what you own and what you owe. Having clean records makes everything else easier.

Gather your financial documents:

• Tax returns for the past three years
• Pay stubs or income statements
• Bank and brokerage statements
• Retirement plan summaries
• Insurance policies
• Mortgage and HELOC statements
• Deeds and titles
• Credit card and loan statements
• Business records, if applicable

Build a net worth statement. List individual and joint assets and debts, with current balances and who's on each account. Identify separate vs marital property.

Separate property might include inheritances or pre-marital assets. However, growth and commingling can blur the lines. So, keep supporting documents handy.

Gregor Emmian, deputy chief digital growth officer at Rise, recommends reviewing key financial aspects before filing for a gray divorce. "Build a net worth statement. List individual and joint assets and debts, with current balances and who's on each account. Identify separate vs marital property."

He adds, "Separate property might include inheritances or pre-marital assets. However, growth and commingling can blur the lines. So, keep supporting documents handy."

2. Understand how divorce affects retirement

Retirement accounts are often the largest assets on the table. And the rules matter:

To split employer plans (401(k)s) and pensions without triggering taxes or penalties, you'll need a court order known as a qualified domestic relations order (QDRO).

Individual retirement accounts (IRAs) don't use QDROs. However, transfers must be structured carefully under a divorce decree to avoid taxes. See IRS Publication 504.

Social Security adds another layer of complexity. If your marriage lasted at least 10 years, and you're 62 or older, you may be eligible for a divorced-spouse benefit. If your ex-spouse dies, survivor benefits can also apply.

3. Consider what you'll do with real estate

Your home is often both a financial and emotional anchor in divorce. Selling and splitting proceeds is one path. However, it's not always the smartest option for older couples who value location or community ties.

When the time comes, there may be alternatives to selling, such as:

• Temporary co-ownership agreements
• Structured buyouts

If one spouse buys out the other, they'll be responsible for the mortgage and taxes. Transfers of property incident to divorce are generally non-taxable under IRS rules. But the cost basis and future capital gains still matter.

If you do sell a primary residence, you may be able to exclude up to $250,000 of gain per person if you meet the ownership and use tests (check IRS Publication 523 Selling Your Home). Check the numbers before you sign anything.

4. Review health insurance options

Health coverage after divorce isn't optional, and the cost can surprise people who've been on a spouse's plan for decades.

According to Fidelity, a 65-year-old may need $172,500 in after-tax savings to cover healthcare expenses in retirement.

You'll need to start researching your options at least six months before the divorce finalizes.

Continuation of health coverage (COBRA) typically provides up to 18 months of coverage after a qualifying event, such as divorce, and sometimes longer in special cases.

The special enrollment period on the Affordable Care Act marketplace can also be triggered by divorce. You can shop for plans outside the usual open enrollment window on HealthCare.gov.

If you're nearing 65, consider timing decisions around the start dates for Medicare Parts A and B. Note: HSA contribution rules change once you enroll in Medicare.

5. Know the tax impact of divorce

Taxes weave through almost every decision in a divorce, and asset division creates tax events that can persist for years.

Consider the tax basis of investments before dividing them. A stock portfolio worth the same as a retirement account today might have very different tax implications when you need to access those funds.

If you have minor children, note that alimony rules have changed since 2019. Alimony is generally not deductible for the payer or taxable to the recipient for divorces finalized after 2018. Review the current treatment in Topic No 452 Alimony and Separate Maintenance.

6. Update your estate plan

When your life changes, your estate plan should change, too. You'll need to update the following:

• Will
• Trusts
• Beneficiary designations
• Titling

Note: Retirement accounts and life insurance pass by beneficiary designation (not your will). So check those forms promptly.

Couples going through a divorce often focus on dividing current assets but forget about future contingencies.

Update your power of attorney (POA) and healthcare directives immediately, rather than waiting for the divorce to finalize.

If support payments are part of your agreement, consider life insurance to secure those obligations, and set ownership and beneficiary structures so that they protect both sides.

7. Research your financial and legal experts

Having the right team can save you from expensive mistakes. You'll need the following:

• A divorce attorney who understands later-life issues
• A Certified Divorce Financial Analyst (CDFA) to model settlements and retirement income
• A tax professional to map out near- and long-term tax effects

Before you hire a professional, ask the following:

• How many gray divorces have you handled?
• How do you structure QDROs?
• What software do you use to model cash flow and taxes?
• What's your approach to Social Security claims after divorce?

The answers will show whether they can really guide you through the financial side of gray divorce, including taxes, insurance, retirement income, housing and everyday costs, as well as healthcare and long-term medical needs.

Planning for a new chapter

Gray divorce is a major financial pivot, and preparation makes all the difference. The more groundwork you do before filing, the more control you'll have as things unfold.

Build your documents, run the numbers and lean on professionals who know the terrain.

You're building a new financial plan for the next phase of your life. Careful preparation now will lay a stronger foundation for the years ahead.

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

Many retirement savers hold a meaningful portion of their wealth in annuities.

Americans hold $2.6 trillion in non-qualified annuities alone. These accounts grow tax-deferred over the years, which means that, without a strategic plan, the increased value can turn into a painful tax bill.

Unless you leave that annuity to charity, you or your heirs will have to pay ordinary income tax on the gains over time.

With Annuity Awareness Month in focus, here are two questions to consider if you have an annuity that has seen significant gains.

How will your annuity be taxed?

An annuity's tax efficiency can depend on whether it's going to be a legacy asset or used as retirement income. How you withdraw money from an annuity also has a tax impact.

If you periodically take money from a non-qualified annuity — to purchase a car, for example — the tax treatment you'll receive is last-in, first-out (LIFO). LIFO treatment means every dollar of gain in the annuity comes out first and is therefore 100% taxable.

What comes out last is your basis — what you put into the annuity — which would be 100% tax-free when you or your heirs eventually get to it.

Not all annuities carry LIFO treatment, however, which is why you have options.

One consideration with older annuities is to turn them into a predictable stream of income by transferring your existing funds from one contract to another, tax-free. Some guaranteed income annuities carry the LIFO treatment, while single premium immediate annuities (SPIAs) work differently, tax-wise. They give you a portion of your basis with each income payment you receive. As a result, you accelerate capture of your tax-free basis by years, possibly decades.

If your existing annuity has an income rider, make sure you price out alternatives before you activate it because a newer annuity contract may offer you a higher amount of guaranteed income, or offer you more favorable tax treatment of that income. You can achieve these outcomes by executing an exchange of your cash value from one annuity company/product to another.

If long-term growth is the objective, periodically review older contracts to ensure fees, riders and investment allocations remain aligned with that goal.

It could be something as simple as adjusting the underlying allocation you have or removing costly riders you don't plan on using.

Or you could look at alternative annuities that allow for more flexibility in what you can buy within the tax-deferred wrapper.

Could long-term care insurance benefit you and your portfolio?

Long-term care (LTC) planning might also be an option for that old annuity, which could mean never having to pay income tax on the embedded gain.

LTC annuities, one of many forms of LTC insurance, typically ask you to forgo most (if not all) future growth in your cash value. In return, they guarantee a multiple of the account value will be available for LTC — tax-free — over time as you need it to pay for help with certain activities of daily living (bathing, eating, toileting, dressing, continence, transferring) or supervision if you have a cognitive condition such as Alzheimer's disease.

Hidden costs to funding long-term care

Most people consider LTC insurance as protection against the cost of care itself. The thinking is that if there are sufficient assets, you can simply self-insure the risk by relying on your portfolio.

While that's true, what is rarely discussed is what LTC insurance does for your portfolio as well as your retirement and estate planning — not as a needed form of coverage but as a tactical allocation within a well-funded retirement plan.

Consider the cost of LTC. The typical home health aide averages $40 an hour or more in higher-cost-of-living areas. A six-hour shift, every day, would run about $7,000 a month and more than $85,000 a year. Nursing costs can be as much as double that, on average, in those same affluent areas.

If you need significant care and don't have a dedicated source of funding, liquidating assets to pay those bills may be the only solution.

However, paying for care from investment assets can create unintended tax consequences, including higher taxable income, increased Medicare premiums and the loss of valuable step-up-in-basis opportunities for heirs.

LTC coverage changes this picture entirely. It insulates the portfolio of assets from quicker liquidation, if not avoiding liquidation altogether, allowing your portfolio to continue to grow tax efficiently.

There's also a compelling financial case for LTC coverage as a complement to your fixed income portfolio, especially if we focus on guaranteed LTC policies where the insurance company cannot raise your premium rates. Those policies contain a death benefit, which guarantees that a family will get their money back if no care is needed.

LTC coverage can provide a level of tax-free income that, depending on how long care is needed, could be difficult to replicate through traditional fixed-income investments.

LTC insurance is by no means a replacement for bonds, nor is it an investment. LTC insurance is an alternative to having more money invested. Its value comes from using a portion of your wealth to create a tax-free pool of funds that insulate the rest of your portfolio from expenses incurred in those less healthy years we all hope never come, but see happening to our older friends and family.

How is this relevant to you?

If you own an annuity with significant embedded gains, are approaching retirement, or have concerns about future long-term care costs, it may be worth reviewing these strategies with your adviser as part of your broader tax and estate plan.

With the right advising team, these are straightforward conversations that can make a meaningful difference in your wealth, long term.

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

You've done everything right. You saved diligently for decades, worked with a financial planner and built a retirement nest egg that should, by any measure, fund the life you've been dreaming about.

So a few months in, why do so many new retirees find themselves feeling vaguely … restless?

There's a concept in psychology called the hedonic treadmill, and it may be the most important retirement planning topic no one is talking about. The idea is deceptively simple: Human beings have a powerful tendency to return to a stable baseline of happiness regardless of what happens to them, positive or negative. We adapt. Quickly.

That new-car smell fades. The lake house becomes just "the house." The golf game you couldn't wait to play every day starts feeling like obligation by the third month. The dopamine hit is real, but it's short-lived. And then the treadmill catches back up.

The treadmill is already running in your retirement plan

Here's where it gets personal. In my years as a financial planner, I've worked with many clients to build what we call an "intentional financial life" — defining what an ideal retirement looks like, then building the plan to get there. We reach the milestone, we celebrate. Then, almost without fail, the goal posts move.

It's not ingratitude. It's biology. The hedonic treadmill doesn't care how hard you worked or how carefully you saved. It just keeps running. And the retirement transition is one of the moments in life where this phenomenon hits hardest, because so much of your identity, your schedule, your relationships, your sense of purpose, changes all at once.

The research backs this up. Studies consistently show that retirees who anticipate a dramatic, lasting boost in happiness from leaving work are often disappointed. The first year frequently brings a genuine honeymoon phase.

But by year two or three, life satisfaction tends to drift back toward pre-retirement levels, unless something more intentional is put in its place.

Moving the goal posts isn't always a bad thing

I want to be careful here, because ambition in retirement isn't the enemy. Plenty of retirees channel the hedonic treadmill productively; they launch a second act, mentor the next generation, or build something new precisely because sitting still didn't suit them. The treadmill, in that case, becomes fuel.

The problem comes when the goal posts keep moving without intentionality behind them. Or, to put it another way, when "enough" never arrives because it's always defined by something just out of reach — a bigger portfolio number, a better house in a warmer state, one more year of work "just to be safe." That's not ambition. That's the treadmill running you.

I've seen the other side of this, too, and it's worth holding up as a model. Occasionally, a client will look at what they've built, look at their life and make a deliberate choice to step off. Not because they've given up, but because they've genuinely recalibrated what they're chasing and realized that "more" isn't the answer.

Their happiness doesn't come from the outside. It comes from an internal sense of enough. Those are the clients I learn the most from.

What the research says actually works

The good news is that the hedonic treadmill can be managed — not defeated, but worked with. Behavioral economists and positive psychologists have identified a handful of things that produce durable life satisfaction rather than a quick spike and fade.

Experiences over things. Spending on experiences, travel, time with grandchildren or learning something new produces longer-lasting happiness than material purchases. Possessions adapt into the background of your life. Memories don't.

Purpose and structure. Retirees who maintain a sense of meaning, through volunteering, part-time work, creative pursuits or community involvement, consistently report higher life satisfaction than those who treat retirement as a permanent vacation. Structure matters more than most people expect.

Social connection. Loneliness in retirement is a documented health risk. The relationships you invest in, with friends, family and community, are among the most reliable predictors of well-being in later life. No portfolio allocation compares.

Savoring and gratitude. Actively noticing and appreciating what's already good — rather than focusing on what's next, is one of the most well-documented ways to raise a personal happiness baseline. It sounds simple because it is. It's also genuinely hard to do consistently.

What this means for your retirement plan

Here's the honest truth: Most retirement plans are built around a number. Hit the number, stop working, be happy. That's the implicit promise. But if the hedonic treadmill has taught us anything, it's that the number alone won't get you there.

The financial piece matters enormously. Security is foundational, and I'm not minimizing it. But the clients I've seen thrive in retirement didn't just plan for what they'd stop doing. They planned for what they'd start. They defined what a good day looked like at 68, and then built a life — not just a portfolio — that could support it.

The treadmill keeps running. That's not a tragedy — it's just how we're wired. The question is whether you're running toward something that genuinely matters to you, or just running.

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

When people step out of their working years and into retirement, they could still have a long journey ahead — perhaps longer than they ever imagined.

Consider how much longer healthy individuals are living today compared with a century ago. For many people, retirement is far more than a brief chapter. It can stretch for decades, which means your planning needs to account for all those years if you want a fulfilling retirement rather than one weighed down by financial stress.

One key to navigating this successfully is having a healthy perspective on accepting longevity. Rather than viewing a long retirement as an obstacle to overcome, think of it as your greatest lever, a powerful tool you can use to your advantage.

Don't eliminate all risk

One way to leverage longevity is by understanding how your investments can complement a longer time period. Many people are tempted to strip nearly all risk from their portfolios as retirement approaches because they worry they won't have time to recover from a market downturn.

While it's true that significant volatility early in retirement can do serious damage to a portfolio (especially when you're simultaneously withdrawing money to cover living expenses while the market is falling), that doesn't mean a conservative approach is your only option.

Protecting every dollar isn't always as efficient as it seems. A portion of your portfolio still needs to be positioned for growth, and that requires accepting some level of risk.

It might feel uncomfortable in this stage of life, but the risks you take should be driven by your needs, not your fears. If you hold on too tightly and suffocate your dollars from growing, they might run out before your retirement does.

This is exactly where longevity becomes your ally. A retirement that lasts 20 or 30 years gives your invested assets real time to recover from market setbacks and continue growing.

That doesn't mean going all in on equities. You absolutely want to shield a portion of your money from market volatility. But keeping your entire portfolio in CDs or similar instruments that can't keep pace with inflation isn't safety — it's a slow erosion of purchasing power.

A balanced investment plan helps give your money a fighting chance over the two or three decades ahead.

An important subject often left unmentioned

When planning for a retirement that could last 20 years or more, one topic deserves a prominent place in the conversation: The potential need for long-term care.

Unfortunately, too many people push this topic aside — which is understandable, but not wise. The prospect of needing a nursing home or round-the-clock in-home care isn't a pleasant topic on which to dwell.

However, these costs can have an incredibly detrimental impact on your retirement savings if you don't plan for them.

The fear of the cost is the other reason people disengage. When they see the numbers involved, planning can feel futile, so avoidance becomes the path of least resistance.

That fear isn't misplaced: Long-term care is genuinely expensive. According to CareScout's yearly Cost of Care survey, the median annual cost of a semiprivate room in a nursing home is $114,975. In-home care can run close to $80,000 annually.

These costs are precisely why planning needs to begin early. Putting it off means that when the need arises, you could find yourself scrambling to address a situation for which you never prepared, and by then, your options might be far more limited.

Those with significant wealth have more flexibility here — not because they're less likely to need care, but because they can afford to pay for it out of pocket. For them, the plan is straightforward: Write a check when needed. Most people don't have that option.

To start, it's worth taking the time to review your options for covering long-term care costs. These might include a dedicated long-term care insurance plan, a life insurance policy with a long-term care rider or setting aside a portion of your savings specifically for that purpose.

This is where the right financial adviser makes a genuine difference, one who is an empowering steward rather than a cautionary money manager. The goal is to build a plan that will help navigate the uncertainties ahead by capitalizing on longevity.

A long retirement can feel like a risk — but it doesn't have to. With the right mindset and planning, longevity becomes an opportunity, not a burden.

Ronnie Blair 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 decades, the 60/40 portfolio — allocating 60% to equities and 40% to fixed income — stood as the gold standard of wealth management.

Its appeal was rooted in a simple and elegant idea: When stocks decline, bonds typically rise, creating a natural hedge that allows investors to "buy and hold" their way to long-term growth.

However, for accredited investors — those with at least $1 million in investable assets — the financial landscape of 2026 has exposed the limitations of this static approach.

In a world shaped by rapid technological disruption, geopolitical shifts and persistently higher interest rates, the traditional 60/40 portfolio is no longer a reliable safety net.

In many cases, it has become a source of unintended risk.

To preserve and grow capital in this environment, the conversation must evolve from static risk management to tactical risk management.

The failure of the static model

Static risk management is, by design, reactive. It depends heavily on historical correlations, assuming that past relationships between asset classes will continue into the future. Its primary mechanism is periodic rebalancing — adjusting holdings to maintain a fixed allocation like 60/40.

Recent inflationary cycles have highlighted a critical flaw in this approach. During periods of rising inflation, the traditional inverse relationship between stocks and bonds can break down. Instead of offsetting each other, both asset classes may decline simultaneously.

For investors with substantial portfolios, this creates a meaningful risk. A simultaneous 15% drop across both equities and fixed income can significantly erode purchasing power — and recovering from that kind of drawdown can take years.

Defining tactical risk management

Tactical risk management takes a proactive, regime-based approach. Rather than adhering to a static allocation, it dynamically adjusts portfolio exposures based on current economic conditions, market trends and volatility signals.

For accredited investors, this approach offers three key advantages:

1. Volatility budgeting

Instead of targeting a specific asset mix, tactical strategies aim for a defined level of portfolio volatility.

When market turbulence increases, cap exposure to higher-risk assets is reduced, with capital shifting into "dry powder," such as cash or short-term Treasuries.

This helps mitigate sequence of returns risk, which can be especially damaging near retirement or liquidity events.

2. Regime-based allocation

Today's market is characterized by rolling recessions and rapid sector rotations. A static 60/40 allocation may leave investors overexposed to declining sectors or underexposed to emerging opportunities.

Tactical management uses macroeconomic indicators to tilt portfolios toward areas of relative strength — such as energy, commodities, private credit or infrastructure — while reducing exposure to weakening trends.

3. Asymmetric preservation

Tactical strategies often incorporate elements of convexity — seeking to capture a meaningful portion of market upside while limiting downside exposure.

For high-net-worth investors, the objective isn't simply to outperform a benchmark, but to ensure that major market corrections result in more controlled portfolio drawdowns.

The behavioral edge

One of the most overlooked advantages of tactical risk management is its psychological benefit. A static "buy, hold and hope" strategy may feel comfortable during bull markets, but it becomes increasingly difficult to maintain during prolonged downturns.

Many investors abandon their strategy at precisely the wrong moment — near market bottoms.

Tactical management introduces a structured, rules-based framework for decision-making. With predefined signals guiding when to reduce risk, investors can rely on data rather than emotion.

This transforms risk from something unpredictable into something actively managed.

Summary: Preserving the next million

Building wealth is not just about identifying the next high-growth opportunity — it's equally about avoiding significant losses. For accredited investors, access to more sophisticated strategies is often the defining advantage.

The 60/40 portfolio was well suited to a different era — one defined by low inflation and steady growth. Today's environment demands a more adaptive approach. Tactical risk management offers a way to stay aligned with current market realities, helping investors move from a passive position to one of active control.

In a volatile world, it's no longer enough to ride along. Investors need to take the wheel.

Dan Dunkin 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.

The aphorism "If you fail to plan, you're planning to fail" is commonly attributed to Benjamin Franklin.

Even if the words are his, he wouldn't have been thinking about income taxes when he wrote them. Those were introduced in 1862 to temporarily fund the Civil War. The 16^th Amendment made them permanent in 1913.

Today's income taxes are quite complex compared to the type of taxation people would have known in the days of the Founding Fathers. And you'll need to take an active, strategic approach to managing them if you want to optimize your financial position.

In general, for income of $150,000 or under, there are specific concerns and ways to approach the planning. For those with $500,000 and more in income, there are different concerns and approaches.

There is no doubt that proper tax planning helps at any level, but in the "messy middle," between $150,000 and $500,000, there is more complexity than necessary.

The challenges of active tax management

One of the biggest challenges in active tax management is synthesizing all the information to uncover what can reduce your tax burden as much as possible in the future, and not just in the current year.

You might be unaware of various deductions, state-specific rules and thresholds that can kick you into a higher bracket, eliminate or phase out a deduction, or cause other unforeseen expenses now or later.

It is a balancing act that is based on and informed by income sources, assets, ways assets are owned, taxation attributes of types of assets, financial goals, expectations about the future of taxes and sometimes even legacy intentions.

For many, the complexity requires a professional to dig into the details, ask the right questions and help devise the best strategy or mixture of strategies. An expert can provide objective analysis that identifies missed deductions and potential opportunities, ensures regulatory compliance, mitigates risks and increases net after-tax long-term wealth.

Whether you do your own tax planning or hire a tax professional, the important point is being intentional — making tax planning a priority in your financial plan (at the very least giving it equal importance to investment, income, legacy and protection planning) and making choices to ensure you are protecting as much of your savings and assets as possible for the long term for the best possible taxation.

Learning the tax implications of your income range

The starting point in active tax management is figuring out your likely income range and optimal tax strategies for now and for retirement. Tax rates can change in the future, but the important approach now is to identify an income range where you think you could settle tax liability at reasonable rates, avoid paying unnecessary taxes and set up a future where you have some flexibility to manage brackets later.

Let's focus on the tricky messy middle — those with between $150,000 and $500,000 in income. For the 2026 tax year, that range of income spans three tax brackets (22%, 24%, 32%) for married couples filing jointly and three for single/married filing single (24%, 32%, 35%).

That range points out the importance of active tax management not only because of the various tax rates, but also because there are numerous deduction phase-outs and additional tax triggers.

Here are just some of those (based on the 2026 tax year).

Net investment income tax (NIIT). This is an additional 3.8% federal tax on certain types of investment income. It applies to individuals with modified adjusted gross income (MAGI) exceeding $200,000 (for single filer/head of household) and $250,000 (married filing jointly/surviving spouse).

Once you cross into these ranges, every dollar of investment income becomes less efficient, making proactive tax planning significantly more valuable. The NIIT applies to income such as interest and dividends, capital gains (stocks, real estate, funds), rental and passive income and certain annuity income.

Long-term capital gains rates. Another negative impact of the NIIT: It effectively raises long-term capital gains rates to 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%), depending on your filing status and income level.

Qualified business income (QBI) deduction. The QBI deduction is a tax break allowing eligible self-employed individuals and pass-through business owners (partnerships, LLCs, S corps) to deduct up to 20% of their qualified business income from their personal taxes.

In 2026, the phase-out range (for some in specified trades or businesses) is $403,500 to $553,500 for married joint filers, $201,775 to $276,775 for single filers.

Child tax credit. The phase-out starts at $200,000 for single/head-of-household filers and $400,000 for married couples filing jointly. The credit amount is reduced by $50 for every $1,000 of income above these thresholds.

Deduction for those who are 65-plus. A new $6,000 deduction for individuals aged 65-plus phases out between a MAGI of $75,000 to $175,000 for singles and $150,000 to $250,000 for married joint filers. The deduction reduces by six cents for every dollar over the limits.

State and local tax deduction (SALT). With MAGI just over $505,000, you begin to lose the increased SALT deduction, but for now, for many with income under $500,000, a higher deduction may mean itemizing for the first time in a while.

Charitable contributions. Donations are only deductible to the extent they exceed 0.5% of your adjusted gross income (AGI). For example, with an AGI of $300,000, only donations over $1,500 are deductible as an itemized deduction, and then only if you itemize. There is now a small "above the line" deduction for those not itemizing. (A note for those in the top tax bracket: A limitation on itemized deductions comes into play for you.)

Increased Medicare premium surcharges. The income-related monthly adjustment amount (IRMAA) is a surcharge added to Medicare Part B and Part D. It is based on your MAGI from two years prior. Single filers with income ranges from $109,000 to $500,000+ pay progressively higher surcharges, as do those filing married jointly from $218,000 to $750,000+.

For example, a married couple filing jointly with a MAGI of $280,000 would pay approximately double for Medicare premiums relative to those who make $215,000.

This is an especially tricky one to navigate and is not felt until two calendar years later, based on how Medicare premiums are determined. You go over a threshold by just a dollar, and it could cost you hundreds, if not thousands.

The widow's tax penalty. This is a surge in federal income tax liability and Medicare premiums that occurs when a surviving spouse shifts from married filing jointly to single status, typically one year after their spouse passes away.

For higher-income individuals, the penalty can be severe because they often have income sources (pensions, IRAs, investments) that do not decrease when a spouse dies.

Most often, the surviving spouse spends about the same money and needs the same amount of funds to accomplish that, which means the same amount of income while the brackets have been cut in half. The IRMAA charges are higher at lower income levels, too, for the surviving spouse.

Take control and reap the rewards

Active tax management is no longer beneficial for just the ultra-wealthy; it is a necessity for anyone and beneficial for those navigating the increasingly complex $150,000 to $500,000 income range.

This bracket is filled with hidden triggers, phase-outs and surtaxes that can quietly erode wealth if left unaddressed. The difference between reactive and proactive planning can mean thousands of dollars kept or lost each year and over a lifetime.

Understand what you have, what you can do now and what you can do later, so you can either defer income or settle tax liability when it makes sense. That approach allows you to optimize your current and future tax situation.

By understanding how the various ingredients and thresholds interact — and by making intentional, forward-looking decisions around income, investments and timing — you can take greater control of your financial outcomes and your net after-tax dollars.

Remember, you do not get to spend pre-tax dollars — it is only the after-tax dollars you get to spend. As the great Yogi Berra once said, "If you don't know where you are going, you'll end up someplace else."

Dan Dunkin contributed to this article.

Appearances on Kiplinger.com were obtained through a paid public relations program. The author received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

The information contained herein is for educational purposes only. It is not intended to provide, and should not be relied on for, any tax, legal or investment advice. You are advised to seek the advice of a qualified professional prior to making any decision based on any specific information contained herein. The specific tax consequences of any investment or strategy will depend on your specific tax situation.

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

More Americans are growing concerned about their ability to afford retirement.

A recent survey from Northwestern Mutual found that 48% of Americans believe they'll outlive their savings.

Many also believe they'll need at least $1.46 million in savings to retire comfortably in 2026, a $200,000 increase from 2025.

It can be easy to hyper-focus on having a certain amount saved before retirement, but without a strategy to turn those savings into reliable income, even the most substantial nest egg may not last.

Whenever surveys like these come out, people shut down after hearing they'll need to have a million dollars in retirement savings. What's often missing from the conversation is how that number is actually calculated.

Many pre-retirees start by estimating how much monthly income they would need to live comfortably. Others use the income replacement ratio (IRR) method, which is calculated by estimating the pre-retiree's average gross salary during their final three years of employment and assuming they'll need about 60% to 80% of that amount each year.

Pre-retirees can also use the 4% withdrawal rule, which suggests they may be able to withdrawal about 4% of their retirement portfolio in the first year of retirement, adjusting that amount for inflation each year thereafter.

Some may choose to take a more detailed approach by building a retirement budget that includes both essential expenses and discretionary spending.

It's important to note that these methods are great starting points, yet they may not take into account market downturns, long-term care needs, reduced Social Security benefits, higher taxes or taking care of adult children.

While it can give you a ballpark range to aim for, setting a target savings number doesn't account for unexpected life events, such as a medical emergency, job loss or a sudden drop in the value of investments.

Oftentimes, these estimates are based on assumptions that do not reflect real-life conditions.

The transition from earning income to living off of savings brings uncertainty regardless of how much money is sitting in retirement accounts. Instead of receiving a consistent paycheck, retirees must rely on their savings to generate income.

This introduces a new set of challenges to navigate, such as withdrawal strategies, healthcare expenses and tax management. Rather than building savings, the focus shifts to sustaining them.

When it comes to creating a withdrawal strategy that works for you, start by developing an expense and budget plan.

• Make a list of your expected annual or monthly expenses, including mortgage or rent payments, property taxes, insurance premiums, utilities, healthcare expenses as well as credit card and loan payments
• Calculate your guaranteed income from sources such as Social Security or pensions.
• Subtract that amount from your annual expenses to determine how much money you'll need from retirement savings or investments to fill that gap.

Once you know how much income your portfolio needs to generate, you can utilize investment strategies. Depending on your goals, risk tolerance and timeline, this may include a combination of income annuities, bonds, certificates of deposit (CDs), dividend-paying stocks, alternative investments, reverse mortgages or other investment vehicles.

After establishing an asset allocation strategy, you can implement a withdrawal approach that aligns with your spending needs.

A strategy that could work for you

For some, the bucket withdrawal strategy might be the best approach. This method puts your savings into short-term, intermediate and long-term spending buckets.

Others may follow the guardrails strategy, which allows retirees to increase withdrawals when portfolio values are rising and reduce them when the market is down.

The "go-go, slow-go, no-go" spending framework may also be worth considering. This method acknowledges that spending patterns often change throughout retirement, with higher spending in the earlier, more active years, followed by slower spending in the later years as one ages.

An important part of retirement planning is preparing for the unknown. Whether it's accounting for inflation, market downturns or longer life expectancies, a comprehensive retirement plan is built to withstand various outcomes.

Even with a solid retirement plan, mistakes can still happen. What's important is being flexible.

Refusing to modify withdrawal rates or adjust investment strategy as life changes can have long-term consequences that can be difficult to recover from.

Market fluctuations can also have a significant impact on retirement income, particularly in the first few years of retirement. When markets decline, many retirees panic and sell off their investments, which can lock in losses that can be difficult to recover from, especially if a withdrawal strategy is already in place.

And, as history has shown, those who leave the market when it's down often miss out on the rebound.

Building a sustainable income strategy starts with understanding monthly expenses.

Once a budget is in place, retirement income can be generated through a combination of Social Security benefits and investments, structured to provide day-to-day sustainability and future growth.

Chris Cohan is a registered representative of and conducts securities transactions through CoreCap Investments, LLC. Chris Cohan is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. RJP Estate Planning is a separate entity and not affiliated with CoreCap Investments or CoreCap Advisors.

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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.

Stocks opened lower Friday as tech stocks slumped on reports that artificial intelligence (AI) giant OpenAI is considering delaying its initial public offering (IPO). And while the main equity indexes were in positive territory by lunchtime thanks to strength in defensive sectors, including healthcare and consumer staples, momentum faded into the close.

Late Thursday, The New York Times reported that advisers to OpenAI are encouraging CEO Sam Altman to delay the ChatGPT parent's offering until 2027. This comes amid recent volatility in SpaceX (SPCX, +0.2%), which went public earlier this month in the biggest IPO ever.

OpenAI confidentially filed its IPO paperwork with the Securities and Exchange Commission in early June, with some suggesting it could go public as soon as Q3 2026.

But a potential delay "is a rational, strategically sound decision by one of the most sophisticated management teams and advisory networks in the technology industry," says Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace.

Lango believes OpenAI would be going public "in a competitive environment where Anthropic's rapid progress has created legitimate uncertainty about long-term market share dynamics" and "in a market that just watched SPCX's $1.75 trillion IPO produce more volatility than anyone wanted."

The news sent the Nasdaq Composite down more than 1% at Friday's open, though the tech-heavy index closed with a more modest loss of 0.2% to 25,297. Memory chip stocks created some of the biggest headwinds for the Nasdaq, with Micron Technology (MU, -6.7%) and Sandisk (SNDK, -10.5%) both posting notable losses on Friday.

Elsewhere, the broader S&P 500 slipped 0.05% to 7,354, while the blue-chip Dow Jones Industrial Average — which will add Google parent Alphabet (GOOGL, -2.2%) to its 30-stock roster on Monday — fell 0.09% to 51,876.

ON Semiconductor sinks 24% on deal drama

ON Semiconductor (ON) was another notable tech loser on Friday, sinking 23.7% to make it the worst S&P 500 stock of the day, after the chip manufacturer said it will buy Synaptics (SYNA, -3.7%) in an all-stock deal valued at roughly $7 billion. This also marks ON's largest single-day drop since October 2023.

"By adding Synaptics' differentiated Edge AI compute franchise and strong portfolio of human-machine interface and wireless connectivity solutions, onsemi is expected to extend its capabilities beyond power and sensing to intelligent systems, delivering greater value to a broad range of end markets," ON Semi explained in the press release.

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The reaction from market participants is likely "an investor preference for a data center rather than edge enhancement," says B. Riley Securities analyst Craig Ellis. But Ellis believes it's "a logical product line extension play from data center AI toward the edge for significant SAM expansion into a $100 billion CY30 AI opportunity now including more humanoids and robotics."

Ellis reiterated his Buy rating on ON and lifted his price target to $135 from $118.

Moderna stock soars on sector rotation, drug news

On the plus side of Friday's ledger was Moderna (MRNA), which rose 12.6% to put it at the top of the S&P 500. In addition to a broader rotation into defensive stocks, the drugmaker got a boost after unveiling its first in vivo CAR-T autoimmune therapy program during Thursday's investor day.

"We do think there is investor interest more broadly in the oncology pipeline and new sources of future growth and diversification beyond infectious disease and COVID/Flu, etc.," says UBS Global Research analyst Michael Yee.

But the new programs discussed on Thursday won't be potential growth drivers until at least 2030, Yee says. As such, focus for now is on the company's INT cancer vaccine, with Phase III data expected later this year, and lowering operational expenditures to reach breakeven.

Yee has a cautious Neutral (Hold) rating on the healthcare stock and a $45 price target — more than 30% below its current 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…

Artificial intelligence has a growing list of productive business uses. But it’s also leaving companies and individuals more vulnerable to cyberattacks.

The speed and volume of threats are the biggest shift. AI is “accelerating attacks from months to hours,” according to a Verizon data breach report from May. And recent AI advances have sparked new panic over critical digital infrastructure used by big banks, governments and other organizations.

Cutting-edge AI models stoke new fears

AI cyber fears hit a boiling point this year. It started with Anthropic’s Mythos AI model, which rapidly found and exploited security flaws in widely trusted software after its April launch. OpenAI has a similar capability. Both have partnered with security firms such as Cisco, Palo Alto Networks and CrowdStrike to help companies patch software. The U.S. government is very concerned and has recently banned foreign nationals from accessing Mythos.

Some advice for businesses:

• Don’t panic. The threat requires attention, but it’s not totally new.
• Focus on patching critical systems first and regularly push software updates.
• Make sure only approved people can use certain digital tools by having strong access controls.
• Use multifactor authentication — the process of combining a username with a password and a PIN or a biometric for logins.
• Physical security keys, such as Yubico’s YubiKeys, are another way to protect against unauthorized access.
• Other essential cyber protections, such as firewalls and antivirus scanners, help fortify defenses.

Note that AI will help find and fix flaws faster, too. “Bad guys can use AI to find vulnerabilities and rapidly create attacks, and software developers should be able to use the same technology to more rapidly (as in before releasing bad code) create hardened versions of code,” noted John Pescatore, director of emerging security trends at the SANS Institute, in an April newsletter.

Other leading AI threats that require urgent attention

The risks of agentic AI
Agentic AI does complex multi-step tasks, from building an app to managing inventory. “AI agents aren’t coming, they are already here,” said Saira Mohammed, Microsoft’s chief security advisor, at a recent Gartner cybersecurity conference in Maryland. 80% of Fortune 500 companies are deploying AI agents, according to Microsoft.

Agents risk data leaks, unauthorized transactions, compliance violations and other harms. “Agents can expose more data in five minutes than a careless employee could in a month,” said Mohammed. Companies can implement guardrails and a set of permissions to limit what’s allowed. Tools can track AI usage, risky actions, stolen credentials, off-hours use, data access and more. These include Microsoft Agent 365, which tracks agents from both Microsoft and third parties, and ReliaQuest, which has a tool to track Anthropic’s Claude.

Threats from AI chatbots
Chatbots such as OpenAI’s ChatGPT and Google’s Gemini have security risks that are hard to mitigate. These include users crafting prompts to bypass guardrails; the chatbots divulging company secrets or data; or AI systems being corrupted by data they’re trained on. Firms can start by blocking or restricting certain prompts (the text workers type into the chatbot). Specific AI tools can be blocked on company devices and networks, and sensitive company data can be blocked from public AI tools.

Also have an approval process for new uses of AI to ensure security, privacy and regulatory compliance, said John Murphy, a Gartner analyst, at the conference.

Fears about deepfakes
AI makes it easy to fabricate videos and photos of real or fake people. Deepfakes can infiltrate video conferences, place phone calls or side-step biometric authentication. One example is attackers impersonating an executive to request money transfers from an unsuspecting employee. Detection tools from vendors such as iProov, Pindrop and Reality Defender scan audio and video for fakes, but they’re not foolproof.

Studies show AI deepfake detection working better in the lab than in the real world, said Christine Lee, a Gartner analyst, at the conference. Companies should educate employees about the attacks, along with using strong login security. Low-tech approaches should be combined with high-tech ones, such as asking personal questions to verify someone’s identity.

Employees misusing AI
Company guardrails need to be built into chatbots and agents, as well as clear guidance for employee use. Specify what data and files workers are allowed to upload into AI tools, for example. Shadow AI, the use of unapproved AI at work, has surged over the past year and is one of the top ways company data is unintentionally leaked, according to the Verizon report.

Education helps, such as AI literacy training about possible attacks, data risks and how AI works. Even AI power users need training, as they may not realize all the cyber risks. Also track AI tools to uncover suspicious activity, ranging from data leakage to shadow AI.

Cyber best practices are still the best line of defense

In addition to these AI threats, there’s still ransomware, phishing attacks, software supply chain risks and much more.

Security experts say to focus on the basics. Inventory your data and devices. Encrypt data and keep backups. Discard unused data and IT. Use automated patching. Use e-mail filters to fight phishing. Change default credentials on IT systems and apps. Keep an updated incident response plan for data breaches. Have regular cyber training.

Trustworthy resources for AI threats include MITRE Atlas and NIST’s AI Risk Management Framework.

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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Google parent Alphabet (GOOGL) will replace Verizon Communications (VZ) in the Dow Jones Industrial Average (DJIA) at the opening of trading on Monday, June 29, making the 30-stock bastion of blue chip companies increasingly exposed to all things digital.

Alphabet is best known to consumers as the operator of Google and YouTube, but as S&P Global notes, GOOGL's diversified portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, self-driving cars and healthcare technology.

"Adding Alphabet will broaden and strengthen the DJIA's exposure to these dynamic areas of the U.S. economy," S&P Global said in a press release. "Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA."

The move refers to Alphabet's Class A shares. The Class C shares (GOOG) will not be in the Dow.

Telecom giant Verizon, which has been in the Dow since 1984, sounds like a pretty poky business by comparison. Apple (AAPL) replaced AT&T (T) in the Dow in 2015. You might notice a pattern here.

S&P Global notes that Verizon represents only one-half of one percentage point of the DJIA due to its low share price. The Dow is a price-weighted index, and "persistently lower-priced stocks have an immaterial impact on the index," S&P Global said.

As much interest as such events generate, being tapped for the Dow is more symbolic than material. The S&P 500 is the main benchmark for U.S. equity performance. That's why the total amount of money passively tracking the index comes to around $12 trillion.

For example, the largest exchange-traded fund (ETF) in the world, the Vanguard S&P 500 ETF (VOO), has more than $1.7 trillion in assets under management alone. A comparable product for the DJIA, the State Street SPDR Dow Jones Industrial Average ETF Trust (DIA), holds just $43 billion in assets under management.

Lastly, the Dow is weighted by price rather than by market cap. Although GOOGL has an outsize influence on the movements of cap-weighted benchmarks, such as the S&P 500, Nasdaq Composite and Nasdaq-100, at current prices, GOOGL will be as material to the DJIA as, roughly, Sherwin-Williams (SHW).

Nevertheless, the blue-chip average will now include many of the biggest names among tech and communication services stocks: Apple, Amazon.com (AMZN), Nvidia (NVDA) and Microsoft (MSFT), as well as Salesforce (CRM), Cisco Systems (CSCO) and International Business Machines (IBM).

Is GOOGL stock a Buy?

GOOGL joining the Dow is not in and of itself a reason to buy the Magnificent 7 stock. Nothing about its fundamentals has changed. While shares are currently in a 15% drawdown from their May peak, Wall Street remains bullish.

Of the 63 analysts covering GOOGL surveyed by S&P Global Market Intelligence, 42 rate it at Strong Buy, 14 say Buy and seven call it a Hold. That works out to a consensus recommendation of Strong Buy.

The Street's investment case for GOOGL comes down to AI. (Duh.)

"Alphabet remains, at a minimum, competitive, if not a leader, in the development of generative AI, the rapidly developing and perhaps disruptive new computing paradigm," writes Argus Research analyst Joseph Bonner, who rates shares at Buy. "We continue to like Alphabet's underlying businesses and believe that GOOGL shares are attractively valued given the company's growth runway."

The bottom line: If you liked GOOGL before its accession to the bluest of blue-chip clubs, there's no reason to change your mind. But don't buy it just because it's a better fit for the Dow Industrials than Verizon.

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Financial experts recommend setting your asset allocation and sticking to it until your life circumstances change.

You should typically split your investments among equities and fixed-income investments and perhaps a pinch of commodities.

For example, you might decide on 49% in stocks, 49% in fixed income and 2% in commodities. If stocks have a big run-up and become, say, 60% of your portfolio, you should consider rebalancing to get back to your original allocation.

What's the best asset allocation for you is highly individual and depends on many factors, including age. Most people become more conservative as they enter retirement and cut back on stocks and increase fixed-income assets, which include bonds and bank certificates of deposit (CDs).

But they aren't the only choices. As the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and lifetime income annuities, I am a nationally recognized annuity expert and know all about those choices.

Fixed-rate deferred annuities — especially multi-year guarantee annuities, or MYGAs — provide safe, steady interest but without most of the drawbacks of bonds or bond funds. They also usually pay higher rates than CDs and are tax-advantaged.

These annuities can thus substitute for some of the bonds or CDs in your fixed-income allocation. But you need to be aware of liquidity and taxation matters before committing.

MYGAs avoid bond-market volatility

Issued by insurance companies in exchange for a single premium deposit, MYGAs share some similarities with bonds and even more with CDs. Like CDs, they earn a guaranteed rate of interest for a set period, usually two to 10 years.

But there are some key differences between bonds and fixed annuities, which have more guarantees and lower risk.

First, you can lose money in bonds. Both CDs and MYGAs guarantee interest and principal. But the market value of a bond fluctuates with changes in interest rates. If rates go up and you sell a bond prior to maturity, it will be worth less than its original cost. With an individual bond, you can avoid this problem by holding it to maturity.

Bond-fund investors don't have that option. If rates spike up after you buy a bond fund, the value will decline. Especially with a long-term bond fund, it may take many years to recover your full principal, if ever.

Second, owners of individual bonds (except Treasuries and U.S. agency bonds) also face default risk. A company or municipality may run into financial problems and fail to make timely interest or principal payments. A default means you could lose part or all of your investment.

In contrast, an annuity is guaranteed by the issuing insurance company. There is no federal deposit insurance, so buyers need to choose carefully. Insurers with strong financial ratings are considered very safe. Rating agencies like AM Best provide a letter grade to insurers.

With fixed annuities, the insurance company bears the underlying investment risk, shielding annuity owners from both bond market volatility and default risk.

Most corporate, municipal and government bonds pay out interest every six months. Normally, there's no ability to reinvest interest so that it can grow and compound at a high rate.

Bond funds let you reinvest your dividends automatically, but the price per share varies as interest rates change. You may have a gain or loss on reinvested dividends when you cash in the fund shares.

More advantages

MYGAs let you compound interest earnings. Reinvested interest gets the same rate as the base annuity, so the yield is guaranteed. Depending on the annuity, owners who need income can usually choose to receive interest earnings monthly, quarterly or annually.

Interest from corporate bonds and Treasuries is taxable in the year it's received. Annuities in nonqualified accounts (not in an IRA, a 401(k) or a similar plan) are tax-deferred.

All interest earnings left inside the annuity grow and compound tax-deferred until withdrawn, a significant tax-planning benefit. You can wait until retirement, when your tax bracket is likely to be lower, to start receiving payments. Without taxes taking a cut, your money compounds faster.

Many corporate and municipal bonds are callable. When rates are high, it may look like you nailed down a great deal. However, a few years later, when rates are lower, the issuer may call the bond back, and you'll have to reinvest the proceeds at a lower rate.

Fixed-rate annuities, like CDs, can't be called. The interest rate is set for the duration of the guarantee period.

Annuities also offer the ability to create a guaranteed lifetime income stream via annuitization. It's the only financial product that offers this option.

Liquidity and taxes

MYGAs have less unpenalized liquidity than bonds and bond funds. You can always cash them in, but you'll pay a penalty for early surrender. Second, interest earnings withdrawn from nonqualified annuities before age 59½, with a few exceptions, are subject to a 10% IRS penalty, plus ordinary income tax.

By the way, MYGAs can work very well as a fixed-income allocation in IRAs, providing "ballast" that counteracts the swings of the stock market while earning a high guaranteed rate of interest.

Because they have less liquidity than bonds, you probably wouldn't want to put all of your fixed-income investments in MYGAs. Among other things, it might limit your ability to rebalance.

But there is some liquidity. Many fixed-rate annuities let you withdraw up to 10% a year penalty-free. They're thus usually more liquid than CDs, which have stiff penalties for any early withdrawals.

Furthermore, you can stagger multiple MYGAs with different terms so that you'll have new ones coming up for renewal every year or two.

Not for everyone but maybe for you

MYGAs aren't right for everyone, but many people can benefit from their unique features. They provide steady, reliable interest that you can usually receive monthly, quarterly, semiannually or annually if you need the income. Or you can let interest accumulate in the annuity and grow tax-deferred.

MYGAs can also work very well in both IRAs and Roth IRAs.

There's nothing wrong with bonds and CDs. But take a look at MYGAs. One or more may be a good fit for you.

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

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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.

Employees at companies that offer equity compensation have the opportunity to grow significant wealth, but it also comes with considerable risk.

Having too much of your net worth tied up in a single company makes you vulnerable to volatility and both short- and long-term losses, depending on the firm's success.

I've seen many employees with concentrated stock positions at tech companies and in other industries who feel conflicted about selling their shares. They may have an emotional attachment to the company or even feel disloyal selling off their shares.

Not to mention that selling all your shares at once can leave you with a large tax bill.

With a thoughtful approach, investors may be able to address the risks associated with a concentrated stock position over time, seek tax efficiency, and remain invested in their company and industry while managing potential downside exposure.

Stock concentration isn't always bad, but it needs a plan

Having a concentrated stock position isn't inherently bad. For many clients, that stock concentration is exactly how they built their wealth in the first place. The goal is simply to make sure your exposure is intentional and appropriate for your situation.

There's no set rule of thumb for how much of your portfolio your company stock should make up. I generally prefer people to keep their single stock concentration to less than 40% of their portfolio, but many advisers take an even more conservative approach, recommending closer to 10% or 20%. The younger you are, the higher percentage of your portfolio it can make up.

It also depends on your other assets. If you have substantial liquid assets, that 40% may be appropriate. But if you have real estate and other illiquid assets, a lower percentage is likely better.

Here are five strategies to manage your concentrated stock position:

1. Understand what you're working with

Stock compensation comes in several forms, including incentive stock options (ISOs), non-qualified stock options (NQSOs) and restricted stock units (RSUs). Each type comes with a different tax treatment, which affects your strategy.

Before you plan your next steps, you need a clear understanding of what you own, when it vests and how you'll be taxed on it.

2. If your company is still private, build your tax-loss bucket now

If your company is heading toward an IPO, you could have several years to start preparing for the large tax bill. Start creating a tax loss bucket in advance.

You can start harvesting your tax losses by selling losing positions in your investment account, capturing those losses, and reinvesting in a comparable security.

You'll slowly build up a reserve of losses you can use to offset the gains you'll earn when you eventually sell your IPO shares.

High earners with sufficient investable assets can also explore specialized investment strategies, such as direct indexing vehicles, to give you more control and help you create tax losses to offset your future gains.

3. You don't have to unwind everything at once

Many employees take one of two extremes when their company IPOs: They either sell everything right away, or they don't sell anything at all. Neither is necessarily the right option.

First, you'll typically be subject to some sort of lockup period, usually 180 days, during which you won't be allowed to sell any of your shares. But you can still use this time to prepare.

Once the lockup period ends, consider a staged selling strategy rather than selling everything all at once. You can spread your sales across multiple tax years to lower your tax bill, reduce the impact of net investment income taxes and, ideally, avoid bumping yourself into the next tax bracket.

By staging your selling over several years, you can significantly lower your tax burden and remove some of the emotional pressure that comes with trying to perfectly time your sale.

4. Consider an exchange fund for long-held stock positions

If you have a highly appreciated stock position worth at least $500,000 to $1 million, an exchange fund can help you diversify it without a large tax consequence. You exchange your concentrated stock position for a private diversified portfolio of securities contributed by other investors.

This strategy isn't appropriate for everyone, as it requires a large investment and a seven-year holding period before you can exit the fund with your holdings — an earlier exit puts you at risk of financial penalties and taxes.

However, if you're a candidate for this strategy, it can be a powerful tool to save a significant amount in taxes.

5. You can diversify without abandoning your industry

A common sentiment among employees with highly concentrated stock positions, especially in the tech industry, is a desire to remain heavily invested in the sector.

Depending on your risk tolerance, you don't have to abandon your tech holdings, but instead spread them out across more companies. You can preserve the potential upside without a single bad earnings report causing a major hit to your net worth.

The bottom line: There's no one-size-fits-all plan, but early planning is key

Stock concentration is common among employees at post-IPO firms or companies that offer equity compensation packages.

There's no one right strategy to address this situation, as it depends on your age, liquidity, risk tolerance and other key factors.

If your company is still pre-IPO, time is on your side, as you have plenty of time to plan your strategy. And if you work for a public company, you have options to exit your concentrated position with less of a tax impact.

Concentrated stock can create life-changing wealth; it's just important to have the right strategy in place to manage it.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. #2026-12426

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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.

Stocks were volatile Thursday as market participants weighed mixed signals from the tech sector. Wall Street also sifted through the latest inflation data, which came in better than expected, but is unlikely to change the trajectory for interest rates this year.

At the close, the blue-chip Dow Jones Industrial Average was up 0.1% at 51,920, while the broader S&P 500 was fractionally lower at 7,357 and the tech-heavy Nasdaq Composite was down 0.5% at 25,358.

Caterpillar (CAT) was the best Dow Jones stock today, adding 6.3% to bring its daily win streak to seven. The industrial stock is also the best-performing Dow component of the year, up nearly 85% so far, on expectations that the heavy equipment maker will capitalize on demand for the artificial intelligence/data center buildout.

UBS Global Research analyst Steven Fisher thinks power generation opportunities will remain strong in the U.S. "until either grid investment ramps up materially or large turbine production capacity ramps up."

And this should support Caterpillar's "earnings growth, along with continued dealer inventory build in construction, a pickup in the mining cycle, and more oil & gas customer investments."

However, Fisher has a Neutral (Hold) rating on the blue chip stock and a $900 price target — below its current price — noting that its upside potential is likely limited from here given CAT's strong run up the price chart.

Apple sinks on MacBook, iPad price hikes

Apple (AAPL), on the other hand, was the worst-performing Dow stock on Thursday, sinking 6.2% on news the company will be hiking prices on several of its products, including the MacBook and iPad.

Earlier this month, outgoing CEO Tim Cook warned that "price increases are unavoidable" given higher costs for components such as memory chips. And the company implemented the hikes today, raising prices for most of its products by $100 to $200.

For instance, as Tech Radar reports, the new MacBook NEO is now priced at $699, up from $599. And the 12-inch MacBook Air costs $1,299 to start, up from $1,099 previously.

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.

Passing these "increased costs onto consumers is emblematic of the substantial expenses associated with AI technologies, which have raised concerns about the capital-return prospects of the initiatives," says José Torres, senior economist at Interactive Brokers. "Also, the need to increase prices is undermining hopes that related projects will offer deflationary relief."

Micron soars 16% on memory chip demand

One company that is benefiting from higher semiconductor costs is Micron Technology (MU), which soared 15.8% — and gained $186 billion in market value — after the memory chipmaker reported its fiscal third-quarter results.

For the three months ending May 28, Micron said earnings rose to $25.11 per share from $1.91 per share in the year-ago period. Revenue surged nearly 350% to $41.5 billion. Analysts expected earnings of $20.05 per share on $35 billion in revenue.

"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," said Micron CEO Sanjay Mehrotra in the earnings release.

For fiscal Q4, the company guided for earnings of $31 per share at the midpoint and revenue of $50 billion.

"MU delivered another strong quarter, reinforcing our constructive view on memory's role in AI and the increasing supply-side discipline supporting a more durable cycle," says BofA Securities analyst Vivek Arya.

Even with the tech stock up more than fourfold for the year to date, Arya believes its "valuation remains compelling," and raised his price target to $1,550 from $1,500 — representing implied upside of 27% from current levels.

PCE comes in better than expected, but keeps rate cuts out of reach

In economic news, the Bureau of Economic Analysis (BEA) this morning said the Personal Consumption Expenditures Price Index (PCE) — the Federal Reserve's preferred measure of inflation — rose 0.4% from April to May and was 4.1% higher from the year prior.

Core PCE, which excludes volatile food and energy prices, was 0.3% higher month over month and up 3.4% year over year.

"Oil prices are heading lower but the inflation problem remains, as core PCE is up 3.4% since last year and showing no signs of abating," says Sonu Varghese, chief macro strategist at Carson Group. "This isn't about energy and tariffs either, as AI-related bottlenecks are also pushing inflation higher."

Varghese believes that the Fed's job only gets harder from here, especially as the labor market continues to improve. "But we think the committee will avoid rate hikes this year as a majority wait for inflation to pass, allowing the economy (and markets) to run hot."

Futures traders, however, expect the next move to be a rate hike. According to CME Group FedWatch, betting odds are for the Fed to raise the federal funds rate by a quarter percentage point by year's end.

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Is your wealth manager invested in your goals or the next commission? It's an essential question every investor should ask.

Finding the right fit amid the crowded landscape of options can feel overwhelming, especially when choosing the right partner to grow your wealth. Thankfully, some of our readers have already done the heavy lifting for you.

For the Kiplinger Readers' Choice Awards, over 4,000 readers ranked the best wealth managers based on overall satisfaction, quality of advice, retirement planning services and more categories in an online survey conducted this past winter on Kiplinger.com.

Among the standouts this year, UBS Wealth Management was the overall winner for wealth managers. Here are the reasons why our readers chose UBS as the best wealth manager.

1. A personalized approach to financial planning

Some wealth managers like to employ a one-size-fits-all strategy, tailoring solutions around higher commissions than taking your needs into account.

However, UBS takes a much more personalized approach to getting to know you. It aims to learn what wealth really means to you by asking you these five questions:

1. What do you want to accomplish in life?
2. What do you want your legacy to be?
3. How do you plan to achieve your life's vision?
4. Who are the people that matter most to you?
5. What are your main concerns?

This begins the UBS Wealth Way conversation. Once you answer these questions, UBS works with you to establish direct goals that align with your answers. Doing this gives you confidence that you have a trusted partner who not only takes the time to listen to you but who also tailors solutions that match your goals and values.

2. Expert service and advice at every life stage

Some wealth managers help you set goals, and that's where their work stops unless you contact them. UBS, on the other hand, is there to take a proactive approach in helping you reach your goals, even as your life changes. The main theme among readers' comments was how exceptional the service was, and the advice they received was excellent.

Their team of wealth experts can help you craft a full suite of goals and adjust them as your life changes. Whether you're a new investor, catching up on retirement savings or receiving a wealth transfer, their team can help you make sense of your finances and plan strategies to help you reach your goals, even after they change.

In turn, you gain a trusted partner who can scale strategies as you build your wealth.

3. Research and digital tools that empower your decisions

UBS invested in digital tools to make managing your wealth convenient. Once you become a client, you can access the online portal 24/7 to monitor your accounts.

This is essential if you're a hands-on investor who wants to review your portfolio regularly, access liquidity or pull up important tax documents. Use the UBS Advice Compass for portfolio assessments and actionable recommendations.

One way UBS excels is in its research offerings. To demonstrate, the UBS Evidence Lab is a sell-side team of research experts that collects data across more than 50 countries and 5,000 companies. In turn, their experts convert this data into actionable insights, providing you with the information you need to make informed investment decisions confidently.

While UBS took the top spot in overall satisfaction, these firms also earned high marks from our readers for their exceptional services and commitment to client success:

• Morgan Stanley Wealth Management
• Raymond James
• Fidelity Wealth Management
• Vanguard Personal Advisory Services
• Bank of America/Merrill Wealth Management Services
• Fisher Investments

Ultimately, not all wealth managers are the same. When it comes to planning for your future and maximizing wealth, lean on the experts our readers recommend the most. UBS offers the tools, resources and personalized guidance that help you feel confident about the road you're on and the direction you're heading.

Eager to see how our readers ranked your wealth manager? Visit our Kiplinger Readers' Choice best wealth managers to see the full ranking and what our readers liked about each one.

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For many people, estate planning starts with a will, a durable power of attorney and a healthcare proxy.

These documents are important. They help determine who receives your property, who can make decisions for you and how your wishes are carried out if you are no longer able to speak for yourself.

But in some situations, they may not be enough.

A trust can be an important part of an estate plan, but it is also one of the most commonly misunderstood estate planning tools. As an estate planning attorney with several years of experience, I have heard a number of assumptions.

Some people assume a trust is only for the very wealthy. Others think a trust is only about taxes. Some believe that if they have a will, they have already avoided probate.

None of those assumptions is necessarily true. My job is not only to ensure an efficient and orderly transition of assets for my clients, but also to ensure that they understand why I am recommending certain documents, including a trust, as part of their estate plan.

What is a trust?

At its most basic level, a trust is a legal arrangement. Think of it as a contract between the person creating the trust and the person responsible for administering it.

The person creating the trust may be called the grantor, settlor or donor. The person responsible for managing the trust is the trustee. The people who benefit from the trust are the beneficiaries.

The trust says, in effect:

• Here are the assets
• Here are the people I want to benefit
• Here is how I want the assets managed and distributed
• And here is the person I am trusting to carry out those instructions

That trustee has a fiduciary obligation to administer the trust according to its terms and in the best interest of the beneficiaries.

Trusts are not just about avoiding probate

One of the most common reasons people consider a trust is to avoid probate. That is a valid reason, but it is not the only one.

Probate is the court-supervised process for administering assets that are part of someone's probate estate.

In Massachusetts, for example, the probate process requires forms to be filed with the court, reviewed and approved. A personal representative must be appointed.

There is also a one-year creditor period during which creditors can file claims against the estate. If assets are distributed too early and a valid creditor claim later appears, the personal representative can be responsible for that claim.

Probate can add time, expense and administrative burden at a point when families are already dealing with a loss. A trust can help avoid that process for assets that are properly transferred into the trust.

For example, if a house is owned by the trust, the trustee can administer or distribute the property according to the terms of the trust, rather than requiring the family to go through probate for that asset.

But a trust is not the only way to avoid probate. Beneficiary designations can also do a significant amount of work. A checking account, savings account, retirement account or other financial account may be able to pass directly to a named beneficiary outside of probate and accomplish much of what is needed in some circumstances.

A will does not avoid probate

Another common misconception is that having a will means your family avoids probate.

A will is important, but it does not keep you out of probate. In many cases, the will is the document that gets filed with the probate court to begin the probate process.

What a will does is provide direction. It tells the court and the personal representative how you want your probate assets distributed. It can reduce uncertainty and clarify your wishes. But the will still has to be accepted by the court, and the personal representative still has to be appointed.

A trust works differently. A revocable trust, often called a living trust or inter vivos trust, is created during your lifetime. It can hold assets while you are alive and provide instructions for how those assets should be administered after your death.

A common estate plan may include a health care proxy, durable power of attorney, pour-over will and revocable trust. The pour-over will acts as a backup, directing any assets that end up in the probate estate into the trust. The trust itself typically contains the detailed instructions for administration and distribution.

When does a trust make sense?

A house is often one of the major reasons people create a trust, because transferring the house into the trust can allow it to be administered without probate. A trust may also make sense if you want to leave assets to a minor child, niece, nephew or grandchild. Most people would not want an eight-year-old to receive a large sum outright. They also may not want the child's parent or guardian to have unrestricted control over the money.

In that situation, the trust can provide that funds be used for the child's education, health, support or other needs. It allows the person creating the trust to provide for the beneficiary while putting guardrails around how the money is managed.

Trusts can also help when a beneficiary is not great with money, has creditor issues or struggles with dependency issues. The goal is to protect the assets and provide structure. A trust can also be amended during your lifetime, if it is revocable, to reflect changing circumstances.

What about blended families?

Trusts can be especially helpful for blended families.

A person in a second marriage may want to provide for a surviving spouse while also ensuring that children from a prior relationship ultimately receive an inheritance. If everything is left outright to the surviving spouse, the surviving spouse may later change their estate plan, remarry, spend the assets or leave the remaining property to different beneficiaries.

A trust can create more clarity and help avoid conflict. It can allow assets to be used for the surviving spouse during the spouse's lifetime, while preserving what remains for children or other beneficiaries after the spouse's death.

Are trusts only for people with more than $2 million?

No. Tax planning is one of the more common reasons to use a trust, but it is not the only reason.

In Massachusetts, the state estate tax threshold is $2 million. For married couples whose combined assets exceed that amount, trusts may be used to shelter assets and defer or reduce estate tax exposure. Assets can include cash, a home, retirement accounts, bank accounts, brokerage accounts and business interests.

But many people who are below the estate tax threshold may still benefit from a trust for non-tax reasons, including probate avoidance, privacy, real estate planning, minor beneficiaries, family complexity or beneficiary protection.

What does a trust cost?

The cost varies by region, law firm and complexity. Some firms charge a flat fee. Others charge hourly. A straightforward trust may cost a few thousand dollars, while more complex planning can cost more. While that upfront cost can feel significant, for many families, it is often less than the expense and delay of probate later.

The key is to start with your goals. What do you own? Who do you want to benefit? Are those beneficiaries ready to receive assets outright? Are there family dynamics that could create conflict? Are there tax, probate or creditor issues to consider?

A good estate plan should not be more complicated than it needs to be. But it should be thoughtful enough to accomplish what you actually want. A trust can provide that structure when a will or beneficiary designation alone does not go far enough.

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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.

Something is happening in advisory practices across the country. The clients who once fit neatly into a financial planning model have changed, and the gap between what they expect and what most firms deliver is getting harder to ignore.

This trend is showing up in client conversations and retention numbers. It's also recurring in conversations I'm having with advisers who sense the model that got them here may not be enough to carry them forward.

While this shift might be concerning to some, I see it as a real opportunity — at least for advisers who are willing to see it that way.

The client has changed

The wealth management industry is in the middle of what may be the most significant client reset in decades. Clients today are approaching wealth differently than they did even a few years ago, and their expectations of the advisory relationship are evolving just as quickly.

Clients are no longer solely focused on portfolio performance. Instead, they want advice that reflects their values, goals, time horizon and definition of success. Generic strategies and one-size-fits-all portfolios are becoming increasingly out of step with what today's clients expect from a financial relationship.

Many clients are also looking for what I call Return on Time Invested, or ROTI. They want advice that buys back hours and funds experiences, not just accumulation. They're less interested in being managed and more interested in being understood.

This shift creates a meaningful challenge for advisers whose practices were built around a model designed for a different type of client. It's also a great opportunity for a reset of the adviser-client relationship itself.

Firms that don't adapt risk losing those relationships as client expectations continue to rise.

Client expectations have outpaced what most firms deliver

For most of the industry's history, the advisory model has been transactional: Win clients, manage portfolios and compete on performance and service. That model no longer matches what clients expect.

Today's clients don't experience their financial lives in silos. They don't separate their investment portfolio from their insurance coverage, estate plan or tax situation. They want someone who can see the whole picture and advise accordingly. They're looking for a better client experience.

The most successful firms are consistently delivering that experience, starting when a client first says yes and lasting throughout the duration of the relationship. They're offering proactive communication rather than reactive. They're providing tax-aware portfolio construction rather than performance-first allocation.

These firms deliver advice that is tailored to the individual, even across a large and growing client base.

Until recently, that kind of capability required infrastructure that only the largest firms could afford. While that's no longer true, it does require the right partners and a willingness to build something more intentional than most advisory practices have been in the past.

From transactions to relationships

The advisers who will thrive over the next decade aren't necessarily the ones with the most clients or highest assets under management (AUM). They're the ones who have built a systematically personalized client experience and the infrastructure to deliver it consistently.

The defining opportunity for independent advisers right now is the shift from transactions to teamwork — and it's one that plays directly to the strengths that independent firms already possess.

Independent advisers aren't steered toward proprietary products. The advice they give is genuinely theirs, and the relationships they build belong to them. As consolidation continues to reshape the industry, that clarity of purpose becomes a differentiator clients notice and value.

The question is how to build the experience that clients are looking for without losing what makes the independent model work. At AE Wealth Management, here's how we're helping advisers understand and make the shift:

• Whole-picture planning is the new standard. Clients expect their adviser to understand the full picture, not just their investment portfolio. Tools that integrate market-correlated and non-market-correlated investments, life insurance and annuities into a single planning view give advisers the ability to deliver comprehensive advice without doing all the heavy lifting themselves.
• Personalization is within reach. Direct indexing, tax-aware portfolio construction and preference-based customization used to require resources most independent firms couldn't access. The right platform partner can change that, putting sophisticated personalization tools in the hands of advisers who want to compete on depth of service rather than just breadth of offering.
• Systematization must be personal. The firms that are growing consistently have one thing in common: A repeatable, disciplined approach to the client experience. However, that doesn't mean it's generic. These firms are building processes that deliver a high-quality, personalized experience to every client, not just the top tier.
• Succession and continuity are part of the experience. Clients who trust an adviser want to know the relationship is protected over time. Advisers who think proactively about succession and preemptively design internal equity tracks and leadership development programs send a signal about the kind of firm they're building.

Consolidation is changing the competitive landscape

As I previously wrote in the article You Don't Have to Sell Out to Grow: A Case for Staying Independent as an RIA on Your Terms, private equity is reshaping the RIA competitive landscape at a speed that was hard to predict even a few years ago. Consolidation is creating real pressure on independent firms, but it's also clarifying something.

Clients are beginning to understand the difference between an adviser who is independent and one who operates inside a structure built for someone else's exit timeline. As that distinction becomes more visible, independent advisers who can clearly articulate their value and back it up with a consistently excellent client experience are gaining an edge that is difficult to replicate.

The advisers who will benefit most from the current opportunities are the ones who stop treating independence as a default and start treating it as a strategy.

Start with the client in front of you

These changes in wealth management can feel abstract until you zoom in on a single client relationship.

• What does that client expect from you today that they didn't five years ago?
• What does their next chapter look like?
• Does your practice have the tools and infrastructure to support it?

The advisers who are asking those questions and acting on the answers are the ones building something that lasts.

The client has changed. The model is shifting. The opportunity is real. The only question is what you will do with it.

This content is for informational use only and not intended as financial advice or advice designed to meet the needs of any particular situation.

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

Another big rebound on the other side of the world suggested stocks would rise in the U.S., too, and that's what happened early on Wednesday. But investors, traders and speculators remain wary about the speed and scale of the artificial intelligence (AI) buildout.

South Korea's KOSPI Index bounced back in a big way after a sharp sell-off from new highs, just as it did in March and April, rising as much as 4.6% and finishing with a gain of 3.3%.

More than half of the KOSPI's value is tied to Samsung Electronics (SSNLF) and SK Hynix (HXSCL), which were up 9.8% and 1.0%, respectively, on their local exchange.

Fellow semiconductor stocks such as Nvidia (NVDA, -0.5%) enjoyed some stateside follow-through, as tech- and AI-related names attracted dip-buyers through midday. Selling pressure returned after lunch.

Industrials, utilities and consumer discretionary stocks — most notably big box retailer Home Depot (HD, +5.7%) — paced the rally over here at a sector level.

"The recent volatility in AI-related names — particularly chip stocks — has been widely described in terms of 'technical exhaustion'," observes Daniel Skelly, head of Morgan Stanley's wealth management market research and strategy team.

Skelly sees evidence of weakness in the fundamental story, too, "including possible AI-model pricing wars and increased sensitivity about spending among AI hyperscalers."

By the closing bell, the tech-heavy Nasdaq Composite had slipped 0.4% to 25,476, and the broad-based S&P 500 was down 0.1% at 7,358. But the blue-chip Dow Jones Industrial Average held on for a 0.4% gain to 51,848.

Warsh has a legendary act to follow

That the front-month West Texas Intermediate crude oil futures contract was down another 4.3% to $70.06 per barrel on Wednesday will relieve consumers and policymakers worried about inflation. That the 2-year Treasury yield backed off from 52-week highs today to 4.148% vs 4.200% on Tuesday will comfort anyone watching interest rates.

That they're calling what happened in South Korea yesterday "Black Tuesday" is a reminder that new Federal Reserve Chair Kevin Warsh has a tough act to follow. But so did Ben Bernanke, Janet Yellen and Jerome Powell.

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.

Indeed, Alan Greenspan, who passed away on Monday, is the model for the modern Fed chair.

Whether you need to know how to run a central bank (or you're forming a jazz band), the old Fed chair has answers for you.

Here are five lessons (we can all learn) from Alan Greenspan.

Papa Dow trades VZ for GOOGL

Alphabet (GOOGL, -0.2%) will be the latest Magnificent 7 stock to join the Dow Jones Industrial Average, S&P Global announced on Tuesday.

The Google parent will replace Verizon Communications (VZ, -2.1%) in the price-weighted index before the opening bell this Monday, June 29, with the swap reflecting a divergence among communication services stocks at a moment defined by AI.

As S&P Global notes, adding Alphabet will "broaden and strengthen" Papa Dow's exposure to AI, as well as advertising, cloud infrastructure, hardware, autonomous mobility, healthcare technology and media distribution.

"Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA," the data provider says.

S&P Global also said Honeywell (HON, +2.3%) will remain one of the 30 Dow Jones stocks after it completes the spinoff of Honeywell Aerospace on June 29.

Micron is reporting earnings right now

Micron Technology (MU, -0.4%) hit a new all-time high on Monday, but the tech stock put up red numbers during the two trading sessions ahead of its post-closing-bell turn on the earnings calendar today.

Of course, a year-to-date gain of 268.7% through Tuesday means expectations are still sky-high; indeed, Wall Street expects management to report earnings growth of 950% on revenue growth of 276%.

Those are big numbers. And they make sense, according to Wedbush analyst Matt Bryson.

"With numbers moving higher, demand for AI seemingly set to remain robust through CY2027 (if not 2028), limited likelihood of oversupply over the next 18 months, and finally a strong likelihood MU exceeds our estimates," the analyst argues, "we see no reason to shift our positive view on the name."

Bryson reiterated his Overweight (Buy) rating and raised his 12-month target price on MU stock from $550 to $1,300 in a preview of management's fiscal third-quarter report.

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New Federal Reserve Chair Kevin Warsh has a message for his fellow central bankers: You talk too much. Indeed, a change has already come to Federal Open Market Committee (FOMC) communications with the first monetary policy statement under his leadership.

But policymakers of that kind of prominence are public figures. That's just the way it is in the information age.

And Warsh knows as well as anyone that, as the 20th century bridged the 21st, Alan Greenspan established a model for the modern Fed chair, under chief executives of both parties, for better and for worse.

The new Fed chair wants "regime change." But he's confronting the work of an old Fed chair who remains an icon on Wall Street and whose legend trickles down even to Main Street.

Greenspan, who was the top policymaker at the world's most important central bank from 1987 until 2006, died on Monday at 100 years old.

Nominated by Ronald Reagan, he led the Federal Reserve under four presidents, through historic macroeconomic and geopolitical events, and was there longer than anyone but William McChesney Martin.

George H.W. Bush nominated him again in August 1991. Bill Clinton did it twice, in February 1996 for a third term and January 2000 for a fourth. George W. Bush nominated him for his fifth and final term in May 2004.

A lot has changed in the 20 years since Greenspan left the Fed. But Ben Bernanke, Janet Yellen and Jerome Powell stayed communicative throughout. And they stuck hard to the main objective: to stabilize the system.

Greenspan is survived by his wife of 29 years, the journalist Andrea Mitchell of MSNBC, with whom he formed one of the most prominent power couples of the era.

Here are five lessons we can learn from Fed Chair Alan Greenspan, a modern central banker of broad and deep experience.

1. Fedspeaking in tongues

Use your words… to the best of your ability… for the purpose you have defined.

"Since becoming a central banker," he testified to Congress in September 1987, "I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said."

It's a little bit ironic, but Greenspan instilled confidence, despite himself.

There's no question the guy was clever. And he certainly understood rhythm and timing. In his performance, Greenspan demonstrated a real grasp of where the science and the humanity of economics meet.

His actions during the dot-com era and the housing boom-bust cycle that followed suggest maybe he was a little too clever.

Something you may not know, however, is that Greenspan's Ph.D. thesis, which was compiled from some of his previously published articles and was withheld from the public at the author's request when he joined the Fed board, highlighted the impact of higher housing prices on consumer spending.

2. Black Monday

Be ready on Day One.

Little more than two months into his new order, shortly after taking his oath on August 11, 1987, Greenspan was forced to manage Black Monday, when the Dow Jones Industrial Average fell 22.6%.

That's still the biggest single-day decline in Papa Dow's 130-year history.

From October 19, Greenspan guided Washington, D.C., Wall Street and Main Street into a historic rally and an economic boom that lasted, almost uninterrupted, through the 1990s.

The Dow recovered 288 points and regained more than 57% of its Black Monday loss within two trading sessions. Papa Dow posted a 0.6% gain in 1987, and it got back to its pre-crash all-time high within 23 months, by September 1989.

3. Fed man in the bathtub

Take a bath.

Later, in December 1996, he wondered, "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions," as the dot-com era unfolded.

Now, here's the rest of the story, as told by the late Fed chair himself in his 2007 memoir "The Age of Turbulence: Adventures in a New World":

The concept of irrational exuberance came to me in the bathtub one morning as I was writing a speech. To this day, the bathtub is where I get many of my best ideas. My assistants have gotten used to typing from drafts scrawled on damp yellow pads–a chore that got much easier once we found a kind of pen whose ink doesn't run. Immersed in my bath, I'm as happy as Archimedes as I contemplate the world.

4. Everybody wants to rule the world (but few are chosen)

And you have to be flexible.

Greenspan, Treasury Secretary Robert Rubin and Treasury Deputy Secretary Larry Summers famously formed what Time magazine called the "committee to save the world" in February 1999.

Indeed, it was like they had the whole planet on their back, like the main character in the main work of Greenspan's favorite author, Ayn Rand, who celebrated Atlas and warned what would happen should he shrug.

Greenspan was an objectivist committed to hard-and-fast free market principles when he was tapped to chair the White House Council of Economic Advisors by President Gerald Ford in 1974.

By the time he was perhaps the key figure in the "age of turbulence," Greenspan was an activist focused on practical means to stabilize an ever-more complex global financial system.

5. The accountant from Ipanema

Know who you are.

Bob Woodward of The Washington Post titled his 2000 biography "Maestro: Greenspan's Fed and the American Boom."

Woodward's book was published well before Greenspan stepped away from the central bank in 2006. It also preceded the global financial crisis/Great Recession of 2007-09, a series of events that earned Greenspan another nickname, "Mr. Bubble," bestowed upon him when he no longer held any real power.

For a long time, though, Greenspan seemed to conduct financial markets and global economic activity.

"Maestro" was also a nod to Greenspan's career as a jazzman. Before he saved the world in the '90s, the future central banker played with Stan Getz and Woody Herman in the '40s. He even attended Juilliard in 1943-44.

Greenspan, who was actually from the Washington Heights neighborhood of New York City, realized he was a better bean-counter than sax-player, so he started keeping his band's books.

Held back from serving in the military during World War II because of a spot on his lung, the son of a single mother earned B.A. and M.A. degrees in economics from the New York University Stern School of Business in 1948 and 1950, respectively, and completed his Ph.D. in 1977.

As the global financial crisis devolved into the Great Recession, investors, traders, speculators and consumers started to wonder whether we need less "superhero" in our central bankers and more supervision from them.

Certainly, though, what Greenspan leaves is a worthy demonstration that a whole lot of competence and little likability can go a long way.

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A lot of investors use bonds for one simple reason: to generate income with lower volatility than stocks. One of the most common ways to structure this is through a bond ladder.

A basic Treasury bond ladder might look something like this: an investor splits capital evenly across Treasury securities maturing in one, two, three, four and five years. As each rung matures, the proceeds can either be spent or rolled into a new five-year Treasury.

Bond ladders can help match future liabilities or spending needs, such as retirement withdrawals or tuition payments. They can also improve cash-flow planning and liquidity management because investors know exactly when principal is scheduled to return.

The issue is that building a ladder yourself can be cumbersome. For Treasuries, many investors use TreasuryDirect.gov, the U.S. government's platform for buying bonds directly. The website, however, has developed a reputation for its dated interface, clunky navigation and poor user experience.

Some investors may instead seek higher yields through corporate bonds issued by companies rather than the U.S. Treasury Department. While these can be purchased through brokerages, individual bond trading comes with its own challenges.

Unlike stocks, bonds largely trade over the counter rather than on centralized exchanges. Pricing can be opaque, spreads can vary significantly, and retail investors are often dealing with institutional bond desks that have more information. There is also more complexity involved. Looking at the coupon and current market price alone is not enough because bonds can trade above or below their face value.

Investors also need to understand metrics such as yield to maturity, which estimates the annualized return if the bond is held until maturity. Duration is another key concept. It measures interest rate sensitivity. All else equal, rising interest rates hurt bond prices while falling rates help them.

To simplify things, asset managers packaged bonds into exchange-traded funds (ETFs), that benefits such as monthly distributions, diversification and stock-like liquidity with transparent bid and ask pricing throughout the trading day.

Traditional bond ETFs, however, come with one major limitation. Most hold evergreen portfolios designed to maintain a constant maturity profile. As holdings age and fall outside the desired maturity range, they are replaced. That means investors cannot simply hold the ETF to maturity and automatically receive principal back the way they would with an individual bond.

To bridge this gap, ETF issuers launched target maturity bond ETFs. These income-building funds are designed to mature in a specific calendar year, similar to an individual bond, while still retaining the diversification, transparency and liquidity advantages of ETFs.

What is a target maturity bond ETF?

Target maturity bond ETFs are usually easy to identify because the maturity year is included directly in the fund's name. You will commonly see labels such as 2026, 2027, 2030 or 2040.

Unlike traditional bond ETFs, which hold an evergreen portfolio spanning many maturities, target maturity bond ETFs hold bonds designed to mature in the same calendar year. That structure makes them behave more similarly to an individual bond ladder.

When you buy one of these, you still receive the standard benefits of a bond ETF. The fund pays periodic monthly distributions rather than semi-annual coupon payments, and the ETF itself trades throughout the day with a net asset value (NAV) that fluctuates based on the value of the underlying bonds.

The key difference appears as the ETF approaches its maturity year. Instead of continuously replacing bonds to maintain a constant duration profile, the portfolio gradually winds down. The bonds mature, proceeds shift into cash and cash equivalents, and eventually the ETF itself liquidates.

From there, investors receive a final distribution based on the fund's NAV after liabilities. This process is designed to mimic the principal repayment of an individual bond at maturity. For example, according to BlackRock and its iShares iBonds lineup, an investor's total return (represented by yield to maturity) comes from two components:

1. Periodic monthly income distributions; and
2. The final end-date distribution upon ETF's termination.

These two components interact with each other. All else equal, if the ETF distributes more income along the way, the final payout tends to be smaller. Conversely, if periodic distributions are lower, more value remains for the end-date distribution.

For iShares specifically, most iBonds ETFs terminate toward the end of the designated maturity year, typically around October through December. Once the underlying bonds mature and the portfolio transitions to cash, the ETF is liquidated and shareholders receive the remaining NAV.

Importantly, target maturity ETFs can still vary substantially depending on the underlying bonds they hold. Most providers offer lineups for U.S. Treasuries and investment-grade corporate bonds, but some also offer high-yield bonds, municipal bonds and Treasury Inflation-Protected Securities (TIPS).

These categories differ in terms of credit quality, yield and volatility, allowing investors to tailor a bond ladder around their own risk tolerance. Even so, target maturity bond ETFs are still exposed to duration risk. A fund maturing in 2040, for example, will have a higher duration than one maturing in 2027.

That means changes in interest rates can still significantly impact the ETF's price before maturity. Falling rates can boost prices, while rising rates can hurt them. Matching the ETF's maturity profile to your actual time horizon for income needs remains important.

Finally, unlike owning an individual bond directly, you will pay an ongoing expense ratio. This annual fee is deducted from the fund's returns and directly reduces yield and total return over time.

For example, a target maturity ETF charging a 0.50% expense ratio would create roughly $50 in annual fee drag on a $10,000 investment. Since the 30-day SEC yield is quoted after expenses, keeping fees low is especially important for income-focused investors.

How we picked the best target maturity bond ETFs

Bond ladders are composed of multiple bonds with staggered maturities. The same principle applies when building one with target maturity bond ETFs. Because investors will typically need several ETFs rather than just one, it was not really practical to crown a single "best" ETF in this category.

In many cases, the primary distinguishing feature between funds is simply the maturity year itself. Instead, we chose to profile four of the largest providers in the space and focus on the part of each lineup that stood out the most.

1. For iShares, we focused on the iBonds Treasury target maturity bond ETFs.
2. For Invesco, we focused on its BulletShares high-yield target maturity bond ETFs.
3. For State Street, we focused on its MyIncome municipal bond target maturity ETFs.
4. For Vanguard, we focused on its investment-grade corporate bond target maturity ETFs.

For every ETF discussed, we also highlighted key metrics such as the 30-day SEC yield, expense ratio, assets under management and liquidity. For each provider, we also selected a group of ETFs that could hypothetically be combined into a three-year bond ladder suitable for an investor starting today.

Remember, this is simply an illustrative example designed to demonstrate how these ladders can be structured in practice. Actual portfolio construction will vary depending on an investor's time horizon, risk tolerance, income needs and interest rate outlook.

One advantage of this category is that many providers now offer dedicated ladder-building tools. For example, iShares offers an iBonds ladder calculator that helps investors estimate metrics such as weighted average yield to maturity and acquisition yield, while also showing how factors like premium or discount pricing and expense ratios affect expected returns.

iShares iBonds Treasury ETF Ladder

• iShares iBonds Dec 2027 Term Treasury ETF (IBTH)
• iShares iBonds Dec 2028 Term Treasury ETF (IBTI)
• iShares iBonds Dec 2029 Term Treasury ETF (IBTJ)

The Treasury component of the iShares iBonds lineup is notable for its low costs and strong liquidity. All three ETFs charge a 0.07% expense ratio, or $7 per year for every $10,000 invested, and each currently trades with a relatively tight 30-day median bid-ask spread of roughly 0.04% to 0.05%.

The funds are also well capitalized. IBTH currently holds $2.2 billion in assets under management, IBTI about $1.8 billion, and IBTJ roughly $1.3 billion. That scale materially reduces concerns around premature closure due to lack of investor interest. In terms of income, as of June 23, IBTH offered a 3.8% 30-day SEC yield, IBTI 4.0%, and IBTJ 4.0%.

U.S. Treasury securities held by these ETFs remain among the safest fixed-income instruments globally. While U.S. government debt has been downgraded from AAA to AA by some ratings agencies, Treasuries are still generally treated as effectively risk-free in practice from a default perspective.

Treasury interest also receives favorable tax treatment. Income from Treasuries is generally exempt from state and local taxes, whereas corporate bond income is typically taxed as ordinary income at both the federal and state level.

Learn more about IBTH, IBTI and IBTJ at the iShares iBonds provider site.

Invesco BulletShares High-Yield ETF Ladder

• Invesco BulletShares 2027 High Yield Corporate Bond ETF (BSJR)
• Invesco BulletShares 2028 High Yield Corporate Bond ETF (BSJS)
• Invesco BulletShares 2029 High Yield Corporate Bond ETF (BSJT)

High-yield corporate bonds, also known as junk bonds or non-investment-grade bonds, are bonds carrying ratings below BBB. Credit ratings are assessed by the three major agencies: S&P Global, Moody's and Fitch Ratings. Within the high-yield market, the highest-rated segment starts at BB, followed by single-B and then CCC or CC-rated securities lower down the spectrum.

These bonds carry materially higher credit risk than investment-grade debt. There is a greater possibility that issuers may fail to make coupon payments or repay principal at maturity. One way to measure this risk is through cumulative default rates.

According to S&P Global, BBB-rated bonds, the lowest rung of investment grade, historically showed a three-year cumulative default rate of just 0.91%. Move down to BB-rated bonds and that figure rises to 4.17%. For single-B bonds, it climbs further to 12.41%. At the CCC/CC level, the three-year cumulative default rate reaches 35.67%.

Investors are compensated for accepting that higher risk through materially higher yields. Currently, the Invesco BulletShares lineup offers sizable 30-day SEC yields: BSJR at 5.6%, BSJS at 5.7%, and BSJT at 6.5%. The longer maturities generally contribute to the higher yields in the later-dated funds.

Investors using the BulletShares high-yield lineup should also pay attention to fees and taxes. These ETFs charge a 0.42% expense ratio, which is reasonable for riskier credit exposure, but notably higher than Treasury or investment-grade target maturity ETFs.

Tax efficiency is another consideration. Because these ETFs hold corporate bonds, distributions are generally taxed as ordinary income at both the federal and state levels. For investors in higher tax brackets, particularly in states such as California and New York, this can materially reduce after-tax yield.

Liquidity is also worth monitoring. Under normal market conditions, these ETFs trade efficiently, but during periods of stress, high-yield corporate bonds can become materially less liquid than Treasuries. Investors should expect wider bid-ask spreads during periods of market turmoil.

Learn more about BSJR, BSJS, and BSJT at the Invesco BulletShares provider site.

State Street MyIncome Municipal ETF Ladder

• SPDR My2027 Municipal Bond ETF (MYMG)
• SPDR My2028 Municipal Bond ETF (MYMH)
• SPDR My2029 Municipal Bond ETF (MYMI)

For some investors, particularly those in higher tax brackets, tax efficiency can matter more than headline yield. Investment-grade corporate bonds are generally the least tax-efficient option discussed so far because their distributions are taxed as ordinary income at both the federal and state levels. Treasury bonds offer some improvement because interest is typically exempt from state and local taxes.

If your goal is avoiding federal income taxes while building a bond ladder, municipal bond ETFs may be more appealing. One option is the State Street MyIncome municipal bond lineup. A simple three-year ladder could be built by allocating evenly across MYMG, MYMH and MYMI.

These ETFs charge a 0.20% expense ratio, placing them roughly midway between the lower-cost iShares Treasury iBonds lineup and the more expensive Invesco BulletShares high-yield ETFs. Liquidity remains reasonable, as all three ETFs currently trade with 30-day median bid-ask spreads of 0.08%.

The funds are relatively new and currently modest in size, with MYMG and MYMH each holding just under $10 million in assets under management, while MYMI sits closer to $14 million. Despite the lower AUM, the risk of liquidation appears limited given State Street's scale, distribution network and brand recognition, which should support future inflows.

Headline 30-day SEC yields currently stand near 3% for all three target maturity bond ETFs. On the surface, those yields may appear lower than taxable Treasury or corporate bond ETFs, but municipal bond investors should instead focus on the tax-equivalent yield.

The tax-equivalent yield estimates the yield a taxable bond ETF would need to generate to match the already tax-free income from a municipal bond ETF. Using the highest marginal federal tax bracket, State Street estimates tax-equivalent yields of 4.8% for MYMG, 4.8% for MYMH, and 4.9% for MYMI.

Learn more about MYMG, MYMH and MYMI at the State Street MyIncome provider site.

Vanguard Target Maturity Corporate ETF Ladder

• Vanguard Target Maturity 2027 Corporate Bond ETF (VBCA)
• Vanguard Target Maturity 2028 Corporate Bond ETF (VBCB)
• Vanguard Target Maturity 2029 Corporate Bond ETF (VBCC)

Vanguard is one of the newest entrants to the target maturity bond ETF space, and so far, its lineup has focused exclusively on investment-grade corporate bonds. These are loans issued by companies rated at least BBB by the major credit agencies.

In practice, however, Vanguard's portfolios also carry substantial allocations to higher-quality A-rated debt, along with smaller allocations to AA and even some AAA-rated securities. Notably, only two U.S. companies currently maintain AAA credit ratings: Microsoft (MSFT) and Johnson & Johnson (JNJ).

In terms of yield, Vanguard's target maturity corporate bond ETFs generally sit between Treasuries and high-yield bonds of similar maturity. Currently, VBCA offers a 4.2% 30-day SEC yield, VBCB yields 4.4%, and VBCC yields 4.6%. The increase in yield across the ladder reflects the additional maturity risk investors take on with the later-dated ETFs.

This segment tends to sit in a "Goldilocks zone" for many investors. Compared to Treasuries, investment-grade corporate bonds provide meaningfully higher income. Compared to high-yield bonds, they carry materially lower default risk. That combination makes them more of a balanced, jack-of-all-trades option for ladder construction.

The trade-off is tax efficiency. Like other corporate bond funds, distributions are generally taxed as ordinary income at both the federal and state levels. While the yields are lower than high-yield bonds, taxation can still meaningfully reduce after-tax income in taxable accounts.

In classic Vanguard fashion, however, the lineup remains very inexpensive. All three ETFs charge a 0.08% expense ratio.

Learn more about VBCA, VBCB and VBCC at the Vanguard Target Maturity provider site.

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Here at Kiplinger, we want to ensure that you have the best financial advice at your fingertips — and that you can understand the specialized terminology often used for complex topics such as investing.

That's why we put together this short quiz to test your knowledge on a handful of key investing terms. Knowing what these words and phrases mean will help you stay a step ahead in those big decisions you have to make about what's in your portfolio and why.

And don't worry if you miss an answer or two. You can follow the links below the quiz to review these investing terms and more.

More on investing from the Kiplinger team:

• Why ETFs Are One of the Easiest Ways to Start Investing
• Best Mutual Funds to Buy for 2026 and Beyond
• Is Dividend Investing Worth It? Pros, Cons and Rules to Follow
• What Is an Initial Public Offering (IPO)?
• What Is the Rule of 72 and How Can Investors Use It?
• Investing Jargon, Explained
• How Investors Can Use Cost Basis to Lower Their Tax Bill
• Dollar-Cost Averaging: How Does DCA Stock Investing Work?

"Do I have enough to retire?"

It's the question nearly every pre-retiree asks — and it's often answered with: "Do you have $1 million?"

Sometimes it is $1.3 million, and occasionally, it is even higher.

But if you have a pension, these benchmarks likely don't apply to you. In fact, retirees with pensions are in a stronger position than they realize and may not need anywhere near $1 million to retire comfortably.

Or, if they do, then they may need to find ways to spend more in retirement.

Here's why.

The $1 million rule leaves out a key piece

Most retirement guidelines are built for people without pensions. They assume your savings must generate income to replace your paycheck, which is where figures like $1 million or more can come from. These types of retirement plans are designed to produce enough annual income to support your retirement lifestyle.

A pension already does that, so when you apply the same savings target to someone with a pension, you're essentially double counting. (I wrote a book for those with pensions that you can request here.)

What is your pension really worth?

To understand how much you actually need to retire if you have a pension, you have to reframe your thinking — not in terms of account balances, but in terms of income.

Let's say you have a $70,000 annual pension. If you took $1 million and tried to replicate that same guaranteed income stream through an immediate income annuity, you may end up in a similar place: Roughly $70,000 per year for life.

A pension can be thought of as an equivalent to having a $1 million investment portfolio dedicated to producing income.

If your pension includes a cost-of-living adjustment (COLA), it may be even more valuable.

How does Social Security affect the math?

Now, let's layer in Social Security with a simple example:

• Pension: $70,000 per year
• Social Security: $36,000 per year

You're already over $100,000 in annual income before touching your investments. That's a level of income many retirees aim for with $1 million or more in savings alone.

So, the question becomes less about "Do I have enough saved?" And more about "How much do I actually need from my portfolio?"

Why retirees without pensions need more

This contrast highlights just how powerful a pension is. Without one, retirees must rely heavily on their investments, often withdrawing 4% or more annually.

That introduces real risks, especially early in retirement: Sequence of returns risk is the danger that poor market performance early in retirement, combined with ongoing withdrawals, will prematurely deplete a portfolio and jeopardize long-term financial security. I call it a double loss.

A pension helps protect you from those risks by covering a significant portion of your essential expenses with guaranteed income.

This is a main reason why studies consistently show retirees with pensions report higher confidence and even greater happiness in retirement.

So, do you actually need $1 million?

Not necessarily. If your pension and Social Security already cover most (or all) of your lifestyle needs, your investment portfolio becomes a supplement, not a necessity.

That could mean:

• You can retire with less saved than you thought
• You may be able to retire earlier
• You could have more flexibility in how you use your money

On the flip side, if you do have $1 million or more and a pension, you may be in an even stronger position than you realize.

What happens if you have both?

Let's revisit that earlier example:

• $70,000 pension
• $36,000 Social Security
• $1 million portfolio

You're already looking at more than $100,000 of guaranteed income. If your portfolio generates an additional $40,000 to $70,000 annually, you could be looking at $140,000 to $170,000 per year in retirement income.

For some people, this could be the same or more than their working income. That raises a different question entirely: "What are you going to do with all that money?"

The real shift: From accumulation to purpose

For many "Midwestern millionaires," who are hardworking, disciplined savers who didn't earn massive incomes but built their wealth steadily (I wrote a book on this that you can request here), retirement requires a mindset shift.

You've spent decades saving, and now you must decide how to use your hard-earned dollars. This mostly comes down to three choices:

• Spend it (travel, experiences, lifestyle)
• Gift it (help children or family now)
• Give it (charitable impact)

Most people haven't put a lot of thought into this, as they have been heavily focused on accumulation.

Also, remember to plan for taxes, as they are one of the biggest concerns for people in this crowd.

Don't ignore taxes and strategy

One important caveat: Having more income, especially from pensions, often means higher taxes in retirement than expected, and strategies like Roth conversions, tax diversification and income timing can help you:

• Maintain control over your tax bracket
• Reduce required minimum distributions (RMDs)
• Increase after-tax income over time

Without a plan, even strong financial positions can become inefficient.

The bottom line

If you have a pension, the traditional $1 million retirement target may not apply to you.

You may already have more than enough. The real opportunity isn't just retiring comfortably, but recognizing the strength of your position and using it intentionally.

Once your income is covered in retirement, it becomes less about hitting a number and starts being about what that number can allow you to do.

Related Content

• 5 Financial Planning Secrets of Millionaires
• If You're the Millionaire Next Door, You May Be a Terrible Spender
• Do You Have at Least $1 Million in Tax-Deferred Investments?
• The Secret to Reducing Lifetime Taxes for Retirees in the 2% Club, From a Financial Planner
• Many Retirees With a Pension and $1 Million-Plus Do These 7 Things (and Regret It Later)

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

The investing road to retirement can be invigorating.

You make regular contributions to an IRA or a 401(k), buy individual stocks or find other investments for your money, and you watch your portfolio's value grow.

There might be times when growth halts or you lose money. But you hold steady with your aggressive approach, a rebound happens and the dollar figure trends upward once again.

As you near retirement, however, you begin to wonder: Will I eventually run out of money?

That's a legitimate concern. Unfortunately, it's more likely to become reality if you continue the aggressive investing decisions that helped you accumulate that hefty dollar amount for your retirement. And that's all thanks to sequence of returns risk.

What is sequence of returns risk?

Put simply, sequence of returns risk is the fact that, in retirement, the overall return on your investment is less important than the order in which those returns happen.

If the market soars during your first years of retirement, you likely can withstand market losses later. But if your investment losses happen in the first five to 10 years of retirement and you are making withdrawals to live on at the same time, your portfolio balance can evaporate quickly.

When the market eventually rebounds, you could have little or nothing left in your portfolio that would allow you to capitalize on that recovery.

In other words, you are a victim of the order in which returns on investments happen.

Two retirees with the same portfolio balance, the same withdrawal rate and the same average return over a 20-year span could have very different results.

The retiree who has a strong market performance in the early years likely could weather a poor performance later. The retiree who had a poor performance early might never recover.

Where will money come from in retirement?

One way to mitigate sequence of returns risk is to ease up on your investing when you're about five years from retirement and begin planning how you can turn at least a portion of your savings into retirement income. That way, in a market downturn, you aren't forced to sell some of your investments at a loss.

The first thing to do is determine your income needs.

Someone who earned $6,000 a month during their final working days might want to continue to have that amount available in retirement. Others might decide they can get by on a little less than their final salary — say 80% or 90%.

Then you need to determine where the money will come from.

Social Security is a main source of retirement income, but it typically equals about 40% of someone's final salary. Unless you have a pension, you will need to make good use of your savings to make up the difference between that amount and your income goal.

That's where wise investing comes into play.

Previously, I mentioned that when nearing retirement, you should ease up on aggressive investments so that you don't see a volatile market swallow everything you worked so hard to save. But you can't ease up entirely. Going too conservative also has its drawbacks.

Take CDs, for example. Long ago, they could generate ample income. In the mid-1980s, you could have lived off the interest on CDs because rates rose into double figures. In those days, $500,000 deposited into a one-year CD might have generated 11% in interest, giving you $55,000 a year.

That opportunity is long gone. These days, CDs barely keep up with inflation — if that. Putting a portion of your money into CDs is fine, especially since your principal is protected, but don't count on them to produce a large amount of income for you.

The diversified income strategy

Another option is a fixed index annuity with lifetime payouts. With a fixed index annuity, you pay a premium to an insurance company, and in return, you receive a regular, guaranteed income.

Other potential income sources in retirement include dividend-paying stocks, U.S. Treasury securities, bonds and real estate investment trusts.

Ideally, you should have a diversified income strategy that balances guaranteed income sources with investment income. But don't create a strategy and think you're done. Revisit your plan about once a year to see how things are working and whether you need to make adjustments.

If you're unsure about the best investing strategy for your retirement needs, a financial professional can discuss your goals with you and help you review the options.

Ultimately, the goal is for your savings to continue to work for you, no matter how long your retirement lasts.

Ronnie Blair 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.

A steep sell-off in South Korea spread to Europe and the U.S. on Tuesday, as investors, traders and speculators asked hard questions about the sustainability of capex plans amid what so far has seemed to be an ever-expanding artificial intelligence (AI) boom. Meanwhile, the Trump administration is talking up another cutting-edge corner of the stock market.

The KOSPI Index, which includes South Korea-based semiconductor stocks such as Samsung Electronics (SSNLF) and SK Hynix (HXSCL), fell 910 points, or 9.99%, to 8,203 on Tuesday. The two chipmakers, which account for more than half of the KOSPI's value, had led the index past the 9,100 level for the first time ever on Monday.

By the closing bell, the tech-heavy Nasdaq Composite was off 2.2% at 25,587, the broad-based S&P 500 had declined by 1.4% to 7,365, and the Dow Jones Industrial Average was down 0.1% at 51,666.

"There is a great near-term buying window for many of the high-flying memory and other technology stocks," Louis Navellier of Navellier & Associates observes, noting that memory stocks showed relative strength on Monday as the Nasdaq sold off late, "but lost their mojo" because of what happened overseas.

Indeed, Navellier expects Micron Technology (MU, -13.2%) to announce record top- and bottom-line results after the closing bell on Wednesday. "The last correction in AI-related stocks this month only lasted four trading days," he writes, "so every dip should be viewed as a buying opportunity."

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The front-month West Texas Intermediate crude oil futures contract was down 0.7% to $73.34 per barrel and has now retreated almost 40% from its wartime highs near $120, as inflation pressure from the Strait of Hormuz continues to ease.

Meanwhile, the 2-year Treasury yield ticked up to another new 52-week high on Tuesday before settling at 4.200% vs 4.219% on Monday, as markets continue to price in a path for short-term interest rates under new Fed Chair Kevin Warsh.

Big Blue gets a quantum bounce from the White House

International Business Machines (IBM, +5.0%) was No. 1 among the 30 Dow Jones stocks on Tuesday, as markets bid up the old-school technology firm on word from the White House of two new executive orders designed to accelerate quantum innovation and to protect against cryptographic attacks.

D-Wave Quantum (QBTS, +2.2%) showed green numbers, too. But quantum computing wasn't immune to broader selling pressure in the tech space, with Rigetti Computing (RGTI, -0.5%) and IonQ (IONQ, -0.8%) lower for the day.

Infleqtion (INFQ, +12.0%), which completed its initial public offering (IPO) in February, and Quantinuum (QNT, +13.5%), a former subsidiary of Honeywell (HON, -2.5%) that debuted as a standalone public company on June 4, did post big gains.

"Quantum technologies represent the next generation of innovation across computing, sensing, and networking, with enormous significance for our country's economic growth, scientific research, and cyber security," President Donald Trump said on Monday. "It's really a big deal that we're doing."

ARK is buying more SPCX

SpaceX (SPCX, +1.0%) enjoyed its first positive session since last Tuesday after ARK Invest revealed through its trade notification system that it purchased a total of 210,121 SPCX shares.

The ARK Innovation ETF (ARKK, -2.1%) added 131,837 shares, the ARK Autonomous Technology & Robotics ETF (ARKQ, -2.8%) 43,486. The ARK Next Generation Internet ETF (ARKW, -2.0%) and ARK Space Exploration & Innovation ETF (ARKX, 1.7%) bought 21,506 and 13,292 shares, respectively.

On Monday, SPCX stock was down more than 16%, and its market cap declined by about $400 billion. According to Dow Jones Market Data, that's the second-biggest single-day loss for any company in stock market history.

Susquehanna analyst Charles Minervino initiated coverage of SPCX with a Neutral (Hold) rating and a $170 12-month target price. "The current valuation requires premium multiples on very aggressive revenue and EBITDA growth assumptions," Minervino says. "With some of the markets that SPCX operates in being relatively unproven, we believe a wide range of outcomes exist."

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If you have a modest nest egg, you might want to chase cheap listings so you can buy shares in larger lots. Buying stocks priced below $20 can be tempting.

But "dirt cheap" doesn’t always mean "good value." In fact, many low-priced stocks trade where they trade for legitimate reasons, among them weak earnings, heavy debt and/or broken business models that may never recover.

Still, if price alone isn't a sign of a good stock, then neither should price alone signal a bad stock. The important thing is to focus on fundamentals.

Solid companies with stocks that trade around $20 per share can generate reliable cash flows based on proven business models. Indeed, these are real reasons to invest, beyond price.

Our top picks for stocks priced under $20 per share are established are established companies with respected brands. They have market values greater than $1 billion. And their business models support stable dividends.

Ford Motor

• Sector: Consumer discretionary
• Market value: $59.6 billion
• Dividend yield: 4.3%

Ford Motor (F) is one of the oldest and most recognizable automakers in America, with a history stretching back more than a century.

Ford has invested heavily in electric vehicles and is selling almost 100,000 units annually. But business is still driven by traditional gasoline-powered models such as Ford's F-Series pickup truck, the best-selling vehicle in the U.S. regardless of powertrain.

While not immune to volatility, the consumer discretionary stock offers long-term exposure to onshore manufacturing and transportation trends that have wide support by consumers and policymakers alike.

With a generous dividend of more than 4%, there are multiple reasons to stay patient and buy and hold this low-priced stock for its long-term potential.

Huntington Bancshares

• Sector: Financials
• Market value: $34.6 billion
• Dividend yield: 3.7%

Huntington Bancshares (HBAN) is an Ohio-based regional bank that serves consumers, small businesses and commercial clients across the Midwest.

The company offers a wide range of services, including checking and savings accounts, mortgages, auto loans, credit cards and wealth management, as well as business lending.

Huntington is not exposed to global risks like Wall Street megabanks with proprietary trading desks. Like most regional banks, it generates revenue by making practical loans to households and businesses.

This is no small-fry financial stock, however, with current assets of nearly $300 billion. That's enough scale to support a reliable dividend and make HBAN a top stock trading below $20.

Newell Brands

• Sector: Consumer staples
• Market value: $2.1 billion
• Dividend yield: 5.7%

Newell Brands (NWL), a small-cap stock, isn't the most recognizable name on our list. But its products–such as Rubbermaid storage containers, Sharpie markers, Coleman camping gear, Yankee Candle scented accessories, Paper Mate pens and Graco baby gear–are very well known to consumers.

Indeed, a diversified product line is Newell's biggest strength, as it generates revenue from a collection of everyday goods rather than resting on a one-dimensional business model.

Multiple moving parts with varying exposures to the consumer economy can make it hard for the company to deliver breakneck growth.

But Newell offers a generous dividend yield, and management has spent recent years streamlining operations and reducing debt to provide long-term stability.

Nokia

• Sector: Information technology
• Market value: $80.7 billion
• Dividend yield: 1.4%

Nokia (NOK) is best known for its former dominance in mobile phones.

Today, the tech stock provides the equipment supporting fiber-optic and cloud-computing networks, as well as hardware essential for 5G infrastructure.

With a customer base that includes telecom providers, governments and large enterprises, Nokia has deep relationships with clients and expertise that's hard to match.

As demand for faster and more reliable data networks continues to grow, this telecom infrastructure company will only be more important in the years ahead. Stability makes NOK a solid low-priced stock.

Ambev

• Sector: Consumer staples
• Market value: $48.9 billion
• Dividend yield: 1.2%

Ambev (ABEV) lacks name recognition in the U.S. But the large-cap stock is one of the biggest beverage companies in Latin America. Ambev is also a majority-owned subsidiary of global brewing giant Anheuser-Busch InBev (BUD).

Ambev produces and distributes beer, but it's also licensed to make soft drinks such as Gatorade, Lipton iced tea and other products owned by PepsiCo (PEP).

Legacy soda and beer brands face headwinds in the U.S. because of changing consumer tastes. But growth is strong south of the border.

The dividend has grown more than 40% over the last five years, and Ambev is well-positioned to continue to support a generous yield.

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For decades, wealth management conversations largely centered on the question, "How much is enough?"

Today, many high-net-worth women are asking a different question: "What is this wealth ultimately for?"

That shift is helping redefine modern financial planning. Women are viewing wealth not simply as a measure of financial accumulation, but as a tool to support wellbeing, family, values and impact.

As head of Wealth Strategies & Solutions at RBC Wealth Management, I've come to call this evolving mindset "inner wealth," which describes the integration of financial success with personal fulfillment and emotional alignment.

Our recent Women and Wealth survey found that 81% of high-net-worth women prioritize values tied to "body, spirit and soul," while 80% emphasize ethics, trust and social responsibility. In other words, wealth today is increasingly being defined beyond the balance sheet.

I don't feel that this is a rejection of financial performance. Rather, it reflects a more holistic understanding of success that integrates financial security with quality of life, meaningful relationships, philanthropy and intentional living.

A new definition of wealth

Historically, wealth management often focused on returns, tax efficiency and asset growth. Those fundamentals still matter deeply. But today's clients, particularly women, want financial plans that also reflect who they are and what matters most to them.

In RBC Wealth Management's research, 58% of women identified "contribution, impact and legacy" among their most important personal values. Many also said they define financial freedom less by luxury and more by flexibility, peace of mind and the ability to spend time with loved ones.

One respondent described financial freedom as "having control over your money so it serves your life goals, not the other way around." That perspective is reshaping financial decisions across investing, estate planning and lifestyle spending.

As more women step into the role of the sole manager of their wealth, whether they are divorced, widowed or never partnered, we are seeing them shift the way they think about their wealth. They think more about the purpose and outcome of their wealth. They want to understand and have meaning in what they invest in. They want to know why they are holding the investments they own and go beyond the numbers.

Values-based planning is moving into the mainstream

Perhaps the clearest evidence of this shift is that clients are aligning money with values in tangible ways.

For some, that means incorporating philanthropy into long-term planning earlier in life. RBC's survey found that 52% of Millennial women say charitable giving is an important priority, which is nearly double the rate of Gen X women.

Many are embracing "giving while living," choosing to support causes and family members during their lifetime rather than waiting to transfer wealth later.

For others, it means pursuing investments that align with personal convictions around sustainability, governance or social impact. Investors are increasingly seeking portfolios that reflect both financial objectives and broader principles.

In daily life, intentional spending is becoming more common. Rather than spending simply for status, many wealthy women are directing resources toward experiences, wellness, family connection and personal growth.

RBC's research showed particularly strong spending interest in adventure travel, luxury travel and hobbies tied to enrichment and wellbeing.

But values-based planning does not necessarily mean sacrificing returns. That misconception has faded considerably in recent years as investors recognize that disciplined diversification, strong risk management and long-term strategic planning can coexist with purpose-driven goals.

How to align your financial plan with your priorities

For readers looking to incorporate more purpose into their own financial lives, the process often starts with reflection before action.

Ask yourself questions like:

• "What does financial freedom actually look like for me?"
• "What experiences or relationships matter most?"
• "How do I use my wealth for better outcomes for my family?"

From there, you can work with an adviser to build strategies that integrate both performance and purpose. That may include creating a philanthropic giving strategy, updating estate and legacy plans, or reviewing investment allocations through a values lens.

It could mean prioritizing wellness and lifestyle goals in retirement planning and structuring family conversations around financial values that are linked to wealth transfer along with financial education, among other important planning elements based on your life.

As women continue reshaping the financial landscape, the concept of "inner wealth" offers an important reminder: True wealth is not only measured by what we accumulate, but by how well our resources align with our values, relationships and sense of purpose. That may become the most valuable return of all.

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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.

My paralegal let me know I had a call waiting from a woman who teaches broadcast journalism. She wanted to discuss serious issues facing university students who find themselves caught in a trap because of the employment contract they signed when they were hired as a broadcast journalist.

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

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

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

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

It's not all glamor

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

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

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

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

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

TV reporters qualifying for food subsidies

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

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

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

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

Reimbursement is required

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

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

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

Many of these provisions are unconscionable.

States have differing laws in the area

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

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

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

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

My recommendation

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

Don't just sign the contract!

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

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

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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

Shannon Saccocia, the Chief Investment Officer–Wealth at Neuberger, an investment management firm, spoke with Kiplinger about what she's predicting for the rest of 2026, resiliency for the market and consumers, and where she sees opportunities for investors.

Kiplinger: What’s your outlook for the second half of 2026? Do you have a target for the S&P 500?

Saccocia: We don’t have price targets, but with the U.S. stock market recently trading below the peak in its price-earnings multiple, while earnings estimates have risen, could we see the S&P 500 up another 5% to 7% by the end of the year? It’s possible, even with the threat of greater market vola­tility. If you just apply the current P/E multiple to the estimated earnings for companies in the index, that translates into a potential double-digit return for the S&P 500 this year.

The broad market declined nearly 10% and then was back to record highs in no time. What accounts for the resilience in the face of a lot of geopolitical and other uncertainty?

Geopolitically driven sell-offs tend to be short-lived, with stronger returns afterward, whether you measure by three months, six months or a year. We’ve seen a very nice rebound, but there are more buyers that could come into this market. Some of the larger buyers — institutions — haven’t gotten fully back to where they were last year. But first and foremost, we remain strong on the market from a U.S. economic perspective. We came into this year anticipating 2.5% growth in gross national product, and potentially higher.

We’ve seen resiliency in the U.S. consumer for several years. Now we’re seeing manufacturing, which had more of a recessionary tone, starting to strengthen. We’ve had support from fiscal spending, increased tax refunds and lower withholding rates from the One Big Beautiful Bill Act. And our view is that the Federal Reserve will cut interest rates twice this year, a quarter point each time.

Back to consumers — can they remain resilient if oil prices stay elevated?

If that happens, perhaps the tailwind that higher tax refunds were expected to deliver to the economy won’t be as pronounced. But they’re acting as a cushion. Even though consumers were already fatigued by higher prices over the past couple of years, we haven’t seen a meaningful tick down in consumer spending.

Our view is that we’ll bump along here and start to see pressures ease on energy prices. But consumers can’t digest these higher energy prices forever.

Are you sticking with your economic growth forecast of 2.5%?

Maybe a touch lower, 2.3% to 2.5%. The risk that our original forecast was not high enough is what’s been taken off the table. We’ve seen incremental, modest pressure on discretionary consumer spending — and the consumer component is such a big part of the GDP cal­culation. But we anticipate meaningful capital-spending growth from companies this year, and at the end of the day, we don’t see evidence of widespread deceleration in economic activity.

Considering that backdrop, where do you see opportunities for investors?

Our biggest change has been to upgrade U.S. large-company stocks, based on a combination of stronger and accelerating earnings growth, along with a compression in P/E multiples. We’d already been overweight in small-cap stocks, and we remain overweight. But our view on large-cap and small-cap is now about balanced. We’ve also been constructive on global equities in general.

When I tell people that we upgraded large caps, they say, “Well, you must like technology today more than you did yesterday.” And that’s probably a justifiable conclusion given the size of the tech sector. We thought tech-stock prices were vulnerable coming into 2025; now they’re more attractive.

Energy stocks are also interesting at this juncture. There’s a bit of a war premium built into energy prices, and some of that will remain even if there’s a cease-fire and an opening of the Strait of Hormuz. We don’t feel that energy stocks have fully incorporated this longer-term impact on energy prices.

We’ve had the call on small caps for some time. But it’s no longer a “buy small caps because they’re cheaper” story, it’s an improvement-in-earnings story, and those earnings are likely to continue to accelerate through the back half of the year.

Has the war short-circuited a move toward international stocks?

I think there’s been a pause, but not a short circuit. There could be some short-term strength in the dollar, but it’s still likely to be flat-to-weaker as we move into the back half of the year, and that supports investing outside the U.S.

But the war has been a reminder of the energy dependence that many of these markets have. Europe and Japan are very dependent on energy imports, and the ability for their consumers to digest those higher prices is pretty limited. There’s a pronounced fear in the market that European central banks could make a policy mistake by raising rates — European response to prior inflationary shocks has been poor.

In international developed markets, we’re underweight Europe and more positive on Japan. Japan is clearly energy-reliant, but it has already started to see the benefits of equity market and shareholder reforms, and wage growth in Japan is supporting the consumer.

In emerging markets, we like China, where a significant amount of spending on artificial intelligence is offsetting challenges from higher energy prices and a burst real estate bubble; India; and Brazil, which is actually on the other side of the energy trade and could perhaps benefit from this environment.

What do you like in the fixed-income market?

We like Treasuries, mostly around the two-year mark. We think they’re mispriced because of an expectation for higher rates, which we don’t see. [Bond prices and interest rates move in opposite directions.] We like investment-grade corporates across the range of maturities.

We like municipal bonds and also some non-U.S. bonds from Germany and the U.K. We like emerging-markets debt, but it has performed well, so valuations are not as attractive. But it’s a great diversifier. We are neutral on high-yield bonds in the U.S.

We’ll all be talking about the midterm elections soon. What’s the likely impact on financial markets?

There’s a typical cadence to the elections. Going into July and August, we could see another pickup in volatility, which typically spikes in the weeks leading up to the election. Returns in this time frame tend to be a bit weaker, then stabilize in September and move higher through the end of the year. I don’t expect a lot of change in the policies from the Trump administration’s second term.

Tariffs are still going to be in the dialogue in some way, shape or form — there’s a need for that revenue to lessen some of the impact from increased fiscal spending. There might be some changes on the margin with a switch of party in the House, whether it’s something like funding for the Department of Homeland Security or Medicare re­imbursement rates.

I will say this: We came into this year with affordability already one of the biggest concerns. The affordability challenge is what will drive voters to the polls, and the current situation in the Middle East is complicating that challenge.

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

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The main equity indexes were mixed on Monday, as market participants continued to monitor negotiations between the U.S. and Iran and the status of the Strait of Hormuz. Investors, traders and speculators also observed the passing of Alan Greenspan, who led the Federal Reserve for almost 20 years and was among the most important central bankers of our time.

At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.3% to 51,712, but the S&P 500 was down 0.4% to 7,472, and the tech-heavy Nasdaq Composite had shed 1.3% at 26,166.

Communication services stocks were the worst-performing group, with the sector weighed down by recent addition SpaceX (SPCX, -16.4%) posting a third straight daily decline less than two weeks after the biggest IPO ever.

The front-month West Texas Intermediate crude oil futures contract fell by 2.0% to $74.35 per barrel. WTI has retraced about 86% of its surge to $119.48 on March 9, the intraday peak amid war in the Middle East.

The 2-year Treasury yield ticked up/down to 4.232% from 4.179% on Thursday, with the market-based barometer of short-term interest rates hitting another 52-week high on Monday.

Following its two-day meeting last week, the Fed held the federal funds rate steady at 3.50% to 3.75%. You can catch up on news and developments around the FOMC meeting at our June Fed meeting blog.

Alan Greenspan, the 'Maestro' of the modern Fed

Whether you deem the development positive or negative, and even if it's just the way things have always been in your experience, it's fair to say Alan Greenspan is the template for the modern celebrity Fed chair.

Greenspan, who led the world's most important central bank from 1987 until 2006, died on Monday at 100 years old.

Nominated by Ronald Reagan to succeed Paul Volcker, a historical figure in his own right, he led the central bank under a total of four presidents, including Reagan, George H.W. Bush, Bill Clinton and George W. Bush.

After assuming leadership of the Fed on August 11, 1987, Greenspan guided Washington, D.C., and Wall Street out of Black Monday that October and into an economic boom that lasted, almost uninterrupted, through the 1990s.

"Since becoming a central banker," he testified to Congress in September 1987, "I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said."

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Later, in December 1996, he wondered, "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions," as the dot-com era unfolded.

Greenspan, Treasury Secretary Robert Rubin and Treasury Deputy Secretary Larry Summers famously formed what Time magazine called the "committee to save the world" in February 1999.

Bob Woodward of The Washington Post titled his 2000 biography "Maestro: Greenspan's Fed and the American Boom." That was well before his retirement from the central bank in 2006.

It also preceded the Global Financial Crisis/Great Recession of 2007-09, a series of events that earned Greenspan another nickname, "Mr. Bubble," bestowed when he no longer held any real power.

MU sees strong demand

Micron Technology (MU, +6.8%) extended its 2026 rally on Monday as markets prepared for the tech stock to report fiscal third-quarter results after the closing bell on Wednesday.

MU is up nearly 300% so far this year, the semiconductor stock rising along with demand for the memory and storage hardware essential to the still-accelerating artificial intelligence (AI) infrastructure buildout.

Indeed, Susquehanna analyst Mehdi Hosseini is on the lookout for cracks in Micron's big gross and operating margin numbers: "While the durability of GM above 80% remains a central question," he writes "we believe the more important issue is whether OM can sustain a 70%-75% range over a multi-quarter — or even multi-year — period."

Hosseini's model shows normalization for margins beginning in fiscal 2028. "Nonetheless," the analyst concludes, "with annualized EPS potentially reaching $160 in FY27, we continue to see meaningful upside to the stock relative to our $1,750 price target."

What will FDX deliver on Tuesday?

FedEx (FDX, +1.2%) hasn't put up year-to-date gains quite like MU's, but it is among the top 10% of S&P 500 stocks so far in 2026 with a total return of greater than 40%. That performance through Monday was supported by recently raised guidance, as well as the completion of much of its corporate restructuring.

"While the market will naturally look for forward commentary," Stifel analyst J. Bruce Chan writes in a preview of FedEx's post-closing-bell turn on the earnings calendar this Tuesday, "we believe this print will be centered around: whether FedEx can deliver against its updated FY26 framework."

Chan, who reiterated his Buy rating and his $442 12-month target price for the industrial stock, will focus on the core Federal Express (FEC) parcel business and whether strength from last quarter carried through a more normalized non-peak quarter.

"Although the near-term print still includes several moving pieces," he concludes, "the larger outlook has improved materially, especially with the parcel business showing evidence of better revenue quality, stronger yield management, improved network efficiency, and more disciplined cost execution."

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Disappointed with the performance of the Dow Jones Industrial Average, I decided in 2023 to reinvent the index to reflect the changing nature of the U.S. economy. I kept 11 of the Dow's 30 components and added some choices from among personal favorites, old 10 Best lists and the Wired Index, concocted by the tech magazine in 1998.

Top 30 is beating expectations. Over the past 12 months, it returned 27%, compared with 24% for the Dow itself. Total cumulative return for three years: 69% for Top 30, 54% for the Dow.

Investing lessons from the Top 30

Performance, however, isn't the only story Top 30 tells. A review of the past 12 months provides a few broad lessons on investing:

1. Even when your portfolio has a great year, you will have a lot of losers

Among my Top 30 stocks, 10 declined, four of them by more than 20% each. The Dow had seven losers in 2025 and eight in 2024. Losing is part of the game. The S&P 500, for example, has declined in 13 of the past 60 calendar years. A churning stomach is the price we all pay for the substantial returns that stocks provide.

2. Diversification is essential

When some sectors fall, others rise, mitigating losses. As I wrote when I introduced Top 30, the Dow is more akin to a quirky managed portfolio than an index. For instance, it lacks enough technology stocks, and it has no real estate or transportation stocks at all.

Top 30 better reflects the U.S. economy. Over the past year, many retailers, packaged goods and software firms suffered, but their declines were offset in Top 30 by the gains of energy companies and internet platforms.

3. Reversion to the mean is a powerful force

In its first year, Top 30 beat the Dow by 13 percentage points. Now, my aggregate lead is much thinner — and I expect it to get thinner still — but I am hoping I'll remain ahead.

4. Trust your instincts

In last year's review of the Top 30's performance, I had considered making three changes. I was worried about “management failures” at UnitedHealth Group (UNH) and had concerns about Nike (NKE) and Lululemon Athletica (LULU) because of tariffs, stronger competition and tired brands. But I decided to stay the course. That turned out to be a mistake. All three stocks declined, two by double digits, and Lululemon was my biggest loser.

Top 30 changes

1. Traded Caterpillar for Deere

My biggest winner, Caterpillar (CAT), nearly tripled in price over the past 12 months. The company increased sales of building equipment thanks to the construction boom triggered by federal infrastructure bills and data center demand. But the stock makes me nervous. Its price-to-earnings ratio (P/E) is too high, and investment research service Value Line sees revenue growth slowing from an annual average rate of 8.5% over the past five years to 6% for the next five.

I'm going to trade Caterpillar for Deere (DE), another large equipment manufacturer. It's smaller, less pricey and has been harmed by a cyclical downturn in agriculture that will inevitably reverse.

2. Swapped Lululemon for Costco

I was in love with Lululemon years ago, but its style of yoga wear now has too many imitators. Also, my list needs a big-box giant retailer. The obvious choice is Costco Wholesale (COST), a brilliantly managed company with $275 billion in revenues.

Costco keeps its prices and operating costs low and its customers happy. The stock is not going to do anything spectacular, and it's not cheap. You're paying for consistency and the ability to ride out any storm — valuable characteristics in a portfolio.

3. Substituted Nike for NextEra Energy

I actually like Nike and continue to recommend it, but I realized that I have a huge gap in the portfolio at a time when demand for electricity is rising sharply. So I am substituting a utility, NextEra Energy (NEE), with an all-of-the-above strategy to generate electricity using the gamut of resources, including renewables.

NextEra's talented CEO, John Ketchum, is projecting 8%+ annual growth in earnings over the next 10 years. No one can accurately predict that far ahead, of course, but demand for electricity is nearly insatiable. Shares are priced higher than the typical utility, as they should be.

4. Replaced UnitedHealth with McKesson

Finally, I need a large healthcare company to replace UnitedHealth. I'm shunning politically vulnerable insurers and hospitals and instead choosing a well-run company with burgeoning sales and profits and low capital-investment requirements. It's McKesson (MCK), one of three firms that control 90% of the market for the distribution of pharmaceuticals and medical and surgical products. Shares have quadrupled in five years, but when you consider that earnings are growing at 12% annually, the P/E remains reasonable.

Top 30 non-movers

Three of the four stocks I am eliminating were components of the Dow: Caterpillar, Nike and UnitedHealth. That leaves eight on the Top 30 list, and the most timely for investors is Microsoft (MSFT), which, unlike other tech trillionaires, trades at about the same price today as it did two years ago — despite revenues that rose 17% in the most recent quarter. Earnings have increased in what I call a beautiful line, up every year for more than a decade. Investors worry that Microsoft is spending too heavily on artificial intelligence and that it laid off 15,000 employees in 2025. I see an underpriced tech giant getting its house in order for a new era.

Among the other keepers, I'm especially pleased with Amphenol (APH), a maker of critical components for the telecommunications sector. It's hardly a household name, but it's the 54th-largest U.S. company in the S&P 500 by market capitalization (price times shares outstanding) and it roughly doubled in the past year.

I was also glad to see Starbucks (SBUX), under new leadership, moving up again. Alphabet (GOOGL) remains my top tech-platform choice because of its adaptation to AI and the growth of YouTube, the online video-sharing platform.

Netflix (NFLX) was among the losers this year, but never, ever sell it. Salesforce (CRM) and Automatic Data Processing (ADP) fell sharply on concerns that AI would make their services less valuable or even obsolete. I believe the negative sentiment is overdone.

The Dow is weirdly weighted by the prices of its components; a 1% move in Goldman Sachs (GS), at $927 a share, has nearly 20 times the impact of a similar move in Verizon Communications (VZ), at $47. Top 30 is equally weighted. I don't expect readers to own all 30 stocks, buying and selling to maintain a 3.33% proportion for each one in the portfolio. A smart asset manager may turn Top 30 into a fund someday, but until then, you'll likely want to use the list to glean ideas for your own purchases rather than buying the whole thing.

A final note: Readers ask from time to time why I don't own most of the stocks I recommend. Rest assured that I am not being hypocritical or unenthusiastic about companies I write about. Instead, I have grown uncomfortable with the potential conflicts in writing about what I own, so I am sticking almost exclusively to index funds. You don't have to.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns shares in Netflix and Microsoft. You can reach him at JKGlassman@gmail.com.

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

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Editor's note: This is part two of a two-part series about estate planning. Part one is These Are the 3 Pillars You Need Before You Build Your Estate Plan.

In the first article in this two-part series on estate planning, I shared the three foundational financial pillars you need to have in place before creating your estate plan. This article also comes in threes — the three-step process for executing an effective estate plan.

When most people think about estate planning, they picture it as signing a will or trust and checking the box as complete. The documents are drafted, notarized and filed away, and it feels like the job is done.

In reality, estate planning is not a single event. It's a three-step process: design, structure and funding. While the first two steps get the most attention, the third is often overlooked. That's the problem, because without funding, even the most carefully drafted trust might not accomplish what it's supposed to.

Understanding how these three steps work together can mean the difference between an estate plan that functions as intended and one that only exists on paper.

Step 1: Estate design: Deciding what to do with your assets

The first step in estate planning is design. This is the vision-setting stage at which you determine what you want to happen with your assets and how you want them managed.

These conversations should focus on questions such as:

• Who should receive your assets?
• When should they receive them?
• Should distributions happen all at once or over time?
• Do you want to provide protection for beneficiaries?
• Do you want control of how money is used after you're gone?

This stage is less about legal language and more about understanding goals. It also requires a broader look at your financial life. Your investments, retirement accounts, tax considerations and long-term care planning all influence what type of estate plan makes sense.

For example, if you're someone who wants to control how assets are distributed over time, you might need a trust.

On the other hand, if you're comfortable with direct transfers, you might want to rely more heavily on beneficiary designations. These decisions shouldn't be made in a vacuum. They depend on how assets are structured and the outcomes you're trying to achieve.

Step 2: Estate structure: Putting legal documents in place

Once the estate design is in place, the next step involves how to properly structure your estate. This is typically when an attorney is called in to create the legal documents that support your goals and wishes.

These documents could include a will, a revocable living trust, powers of attorney and healthcare directives. This step puts your wishes into a definitive written plan, translating your goals into legal instructions that can be executed later.

This is also when many people must decide between a will and a trust. Though frequently used together, there are distinct differences between the two.

A will directs how assets should be distributed after death, but it must go through probate, which is the legal process that oversees the division and distribution of assets among beneficiaries.

A trust is a separate legal entity that can own assets during or after your lifetime, often avoiding probate and allowing more control of how assets are managed.

Because trusts offer additional flexibility and control, many people choose to go that route when creating their estate plans. But this is also where a common misconception begins: Signing trust documents doesn't automatically place assets into the trust.

That leads to the most critical and often overlooked step.

Step 3: Estate funding: Putting the plan into action

Funding your estate is the process of transferring assets into your trust or aligning beneficiary designations so your estate functions as intended.

Without funding, a trust can exist legally but have no authority over any assets. If that's the case, the estate plan may default to probate or distribute assets in ways that don't reflect your wishes.

Unfortunately, this happens more often than people realize. Someone might go through the effort of creating a trust, only to leave their home, bank accounts and investments titled in their individual name. When that happens, the trust doesn't control those assets. It essentially becomes a document sitting on a shelf.

Don't let missteps ruin your estate plan. Work with a financial professional who can protect and preserve your assets and help you leave a legacy for the next generation.

Funding requires action. Depending on the type of asset, this could involve changing ownership or updating beneficiaries. Assets commonly found within a trust include real estate, after-tax brokerage accounts and bank accounts. For example, if you want your home governed by your trust, the deed must be updated so the trust becomes the owner instead of you.

Other assets, such as an individual retirement account (IRA), cannot be owned by a trust. These accounts must remain in an individual's name while they're living. However, they can name a trust as a beneficiary in certain situations, allowing assets to flow into the trust upon death.

A complete estate plan requires coordination

Estate planning is most effective when all three steps — design, structure and funding are completed one after the other. The design clarifies your goals. The structure puts legal documents in place and funding is what makes the entire plan work.

Without it, your wishes might not be carried out the way you intended.

If you've already created a will or trust, it might be a good idea to review it alongside a professional to determine whether your assets are properly aligned with your wishes. A trust that owns the right assets can help ensure your plan is executed without heartache and financial hardship.

At Blue Ridge Wealth Planners, we believe everyone deserves to have their wishes respected and legacy preserved. A thoughtful and well-coordinated estate plan will help you better protect your assets, not only for yourself, but for your loved ones and the causes closest to your heart.

Blue Ridge Wealth Planners is an independent financial services firm and uses a variety of different investment strategies. This is for informational purposes only and is not intended to serve as the basis for any financial decisions, nor should it be construed as legal or tax advice.

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

If you're like most people, you work hard not only to cover everyday necessities, but also to prepare for a day when you don't have to work anymore.

Sadly, comprehensive retirement planning is a challenge for many workers. More than 56 million Americans don't have access to an employer-sponsored retirement plan like a 401(k),according to a 2024 Pew Charitable Trusts survey.

The good news is that a lack of an employer plan doesn't mean you can't retire successfully—you just need to take a different approach.

Why doesn't your employer offer retirement plans?

Many employers assume that offering a 401(k) is prohibitively expensive. The reality is much more encouraging. Retirement plans designed for startups are often charged on a per-participant basis, making them scalable and affordable.

Smaller businesses also may not realize they have access to SEP IRAs and SIMPLE IRAs. These plans come with lower administrative costs and fewer management burdens. They also allow business owners to make contributions toward their own retirement.

Even if you don't have employees, you have options. A Solo 401(k) allows you to invest in your retirement, potentially saving more than you could with an IRA alone.

Which self-funded plans are available?

Regardless of why a plan isn't offered, the more important question is how individuals can take control of their own retirement savings. The first place my mind goes is to individual retirement accounts, or IRAs.

Unlike a 401(k), which is always tied to your employer and offers a limited menu of investment options, an IRA can be opened and managed on your own, while providing considerably more investment options.

The tradeoff is that contributions are capped, limiting how much you can save each year.

Another excellent choice for self-funding is a taxable brokerage account. These accounts allow you to invest in mutual funds, stocks, bonds and other securities without the contribution limits of an IRA. You'll pay taxes on dividends and capital gains, but the flexibility and uncapped contributions can make a brokerage account a valuable complement to tax-advantaged retirement savings.

Beyond choosing the right accounts, consistency matters just as much. While working with clients, I've found it helpful to set up automatic contributions to their IRAs and brokerage accounts. This replicates the "pay yourself first" approach of a 401(k)—you are less likely to miss what you don't see.

Are there any non-retirement plan options?

Beyond traditional retirement accounts, other financial vehicles can bolster your retirement readiness. Health savings accounts (HSAs) are worth considering if you have a high-deductible health plan. HSAs offer three tax advantages:

• Contributions are tax-deductible
• Growth is tax-free
• Withdrawals for qualified expenses are tax-free

While you're young, these benefits can help offset healthcare costs, allowing you to shift funds toward retirement savings. After age 65, you can withdraw HSA funds for any purpose—although you'll pay taxes on nonmedical withdrawals. I like to think of it as a stealth retirement account.

Annuities can be another source of retirement income. This financial tool is a long-term contract with an insurance company—you pay money now in exchange for guaranteed, tax-deferred income later.

Annuities provide steady cash flow for a set period or for life. However, they are complex financial instruments with varying fee structures and features, so they require careful evaluation to ensure they align with your specific needs.

How can working with an adviser help?

Even with all these options, deciding how to combine them can be challenging, which is where partnering with a financial adviser can help. An adviser can help you navigate the full range of options and provide guidance to pick the strategies that work best for your situation.

Consulting with an adviser is especially important 10 years before your desired retirement. This decade-long window allows you to make meaningful adjustments to your savings strategy and investment allocation based on where you stand versus where you need to be.

If you're 50 or older, you can also take advantage of catch-up contributions that allow higher annual limits for both IRAs and 401(k)s.

What should you do first?

The absence of an employer-sponsored retirement plan is a challenge, not a dead end. Multiple paths can lead to a secure retirement.

For example, you could start by building an emergency fund to cover six months of expenses, then fund an IRA up to the annual limit and finally direct additional savings to a taxable brokerage account or HSA.

Whatever direction you take, the important thing is to explore your options as soon as possible to allow your money more time to grow. With the right mix of planning, discipline and guidance, preparing for retirement without a 401(k) isn't just possible, it can be powerful.

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

The last time we checked in with Brown Capital Management International Small Company (BCSVX), the fund was reeling from a 2.3% decline in 2025 — a year when the MSCI ACWI ex USA Small Cap Growth Index gained 26%.

The fund is heavy in tech stocks, which sank, and it's light on materials and industrials shares, sectors that fueled much of the rally in 2025.

And now? Over the first four months of the year, BCSVX, a member of the Kiplinger 25, our favorite no-load mutual funds, declined another 12%, compared with an 11% climb in the aforementioned index.

That's not the whole story, however. Early 2026 has been a tale of two periods, the managers say: before the Iran war started and after.

Before hostilities began in late February, a rally in cyclical companies and a collapse in tech shares continued — and so did the fund's laggardly performance compared with the MSCI ACWI ex USA Small Cap Growth Index.

After the conflict started, though, investors did an about-face, snapping up quality companies that deliver mission-critical products and services to customers, the fund's bailiwick.

A sentiment switcheroo for this small-cap fund

In the roughly two months following the start of the conflict, International Small Company has held up better than its bogey.

Sectra AB, a Swedish medical-imaging tech company, and U.K.-based online investment platform AJ Bell have gained 27% and 21%, respectively, since late February. Camtek, an Israeli semiconductor capital-equipment firm, has been a big contributor, too. All are among the fund's top 10 holdings.

After just two months, we're wary of calling this a turnaround. But we're also a little weary of this fund's yearlong slump.

Brown Capital's International Small Company fund holds just 36 stocks. Tech and healthcare stocks make up 60% of the portfolio combined. It's a reminder that focused funds can be riskier than those that hold a bigger selection of stocks. We've identified a few potential replacements for it in the Kiplinger 25, but we're holding on for now and will check in with the fund again in a few months.

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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If there's one question that keeps pre-retirees up at night, it's this: Will my money last?

For decades, the financial industry has leaned heavily on rules of thumb, such as the 4% rule, to answer that question. But real life rarely follows a straight line.

Markets fluctuate, inflation rises and falls, and unexpected expenses — especially healthcare — have a way of showing up at the worst possible times.

A more reliable approach to retirement income planning doesn't depend on guesswork. Instead, it starts with structure.

I like to think of retirement income in three distinct layers: Need, want and grow. When built correctly, this framework creates stability, flexibility and long-term resilience, regardless of market conditions.

It may not be flashy. In fact, it's intentionally a bit boring. But that's the point: A boring portfolio supports an exciting retirement.

Here's how it works.

Step 1: Guarantee your 'need'

The foundation of any successful retirement plan is ensuring that your basic living expenses are covered — no matter what happens in the markets.

Your "need" income is the amount required to maintain your core lifestyle. Think housing, utilities, groceries, insurance and other essential expenses. These are non-negotiable. They must be paid whether the market is booming or in a downturn.

The key here is certainty.

To guarantee this level of income, retirees should rely on sources that are dependable and, ideally, last for life. These typically include:

• Social Security
• Pension income (if available)
• Interest from high-quality, long-duration government bonds (such as 30-year Treasuries)
• Annuities with lifetime income riders

Each of these sources shares a common characteristic: They provide income that isn't directly tied to stock market performance.

A practical strategy is to carve out a portion of your retirement savings specifically to fund this layer. Once your need is covered by guaranteed or highly predictable income streams, you've eliminated the biggest risk in retirement: The inability to meet your basic expenses.

This step alone can dramatically reduce financial stress. When retirees know their essentials are covered, they can approach the rest of their portfolio with greater confidence and clarity.

Step 2: Protect your 'want'

Once your foundational needs are secured, the next layer focuses on enhancing your lifestyle.

Your "want" income is what allows you to enjoy retirement — not just survive it. This includes:

• Travel and vacations
• Dining out
• Hobbies and entertainment
• Gifting to family
• Experiences that make retirement meaningful

While these expenses are more flexible than your needs, they're still important. After all, retirement should be about enjoying the life you've worked hard to build.

The goal in this step is protection with moderate flexibility.

Unlike step one, this layer doesn't need to be fully guaranteed — but it should still be relatively stable and low risk. Appropriate tools often include:

• Government bond portfolios
• Fixed index annuities
• Other conservative income-oriented investments

These options typically offer a balance between safety and modest growth potential, helping preserve principal while generating income.

Again, the strategy is to allocate a portion of your retirement savings to fund this layer after step one is complete.

By doing so, you create a buffer between your lifestyle spending and the volatility of the stock market. Even during market downturns, your ability to enjoy retirement isn't immediately compromised.

Step 3: 'Grow' the rest

With your needs guaranteed and your wants protected, the remaining portion of your portfolio can be positioned for growth.

This is where you invest for:

• Inflation protection
• Future healthcare expenses
• Legacy goals
• Emergencies and unexpected costs

This portion of your portfolio is typically invested in a diversified mix of market-based assets, such as:

• Stocks
• Exchange-traded funds
• Mutual funds
• Other growth-oriented investments

The exact allocation should align with your personal risk tolerance, time horizon and financial goals.

Because your essential and lifestyle income needs are already addressed in steps one and two, this growth portion can be invested more strategically — without the pressure of needing to generate immediate income during unfavorable market conditions.

This is a critical advantage.

In traditional retirement strategies, retirees often draw income directly from market-based portfolios. When markets decline early in retirement — a phenomenon known as sequence of returns risk — this can significantly damage long-term outcomes.

By separating income needs from growth assets, you give your portfolio time to recover and compound over the long term.

How the pieces fit together

In practice, most retirees will allocate:

• 50% to 60% of their portfolio to steps one and two combined
• Up to 70% at most in more conservative income and protection strategies
• The remaining portion to growth investments

This balance creates a structured yet flexible approach to retirement income.

It's also fundamentally different from relying solely on the 4% rule.

The 4% rule assumes a consistent withdrawal rate from a market-based portfolio, regardless of market conditions. While that rule can work in favorable environments, it offers limited protection during prolonged downturns or periods of high inflation.

In contrast, the need-want-grow framework is designed to work in both good markets and bad markets.

In strong markets, your growth portfolio can flourish, supporting future needs and legacy goals.

In weak markets, your essential income remains intact, and your lifestyle is largely protected.

This reduces the emotional and financial strain that often leads retirees to make poor decisions — such as selling investments at the wrong time.

Why 'boring' works

It's easy to be drawn to complex strategies or high-return opportunities, especially after decades of saving and investing.

But retirement is about maximizing reliability and peace of mind, not maximizing returns.

A structured, layered approach may feel conservative, even boring, but that's exactly what makes it effective.

When your income plan is predictable:

• You worry less about market volatility
• You avoid emotional decision-making
• You gain the freedom to actually enjoy retirement

And that's ultimately the goal.

While an exciting portfolio might look good on paper, it's a boring, dependable one that supports an exciting life.

Final thoughts

Creating a rock-solid income in retirement doesn't require complicated formulas or blind faith in market performance; it requires clarity.

By breaking your retirement income into three distinct steps — guaranteeing your needs, protecting your wants and growing the rest — you can build a plan that is resilient, adaptable and aligned with how real life actually unfolds.

And perhaps most importantly, you can replace uncertainty with confidence. Because in retirement, the best plan isn't the one that promises the highest return; it's the one that lets you sleep at night — and wake up excited for the day ahead.

Centennial Advisors, LLC is an Investment Adviser registered with the U.S. Securities and Exchange Commission ("SEC"). Registration as an investment adviser does not imply a certain level of skill or training.

Dan Dunkin 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.

Most financial plans are created with good intentions. When they're made correctly, they account for the client's goals, spending habits and savings patterns. But financial problems rarely come from a bad financial plan. They're usually the result of a plan not being implemented consistently.

Making financial changes isn't easy. Behavioral changes take time, and daily life can be distracting. Clients usually understand the recommendations being made, especially when they have a good relationship with their adviser.

But actually following the guidance requires the client to look inward and confront financial habits that may no longer work — and that can be uncomfortable.

The tasks that commonly get delayed aren't the hardest, but rather the ones that feel the least urgent. Updating beneficiaries, funding trusts or investing for retirement can easily be pushed to the side thanks to a false sense of security.

People think the future is guaranteed and waiting to act doesn't have consequences — until the unexpected happens.

Tomorrow isn't guaranteed

Earlier this year, I worked with a couple to create both a retirement and estate plan. The legal documents were drafted and a strategy was in place. The husband and wife just needed to continue funding the trust. They understood this, but it never felt urgent, particularly for the husband. He was 68 and simply thought he had more time. But he didn't.

One morning he was brushing his teeth when he suffered an aneurysm that killed him. As the trust wasn't fully funded, the estate went through probate. The wife was left with unexpected legal costs, delays and stress while mourning the sudden death of her husband.

This is a situation no one wants to go through, but believing the future is guaranteed can increase its chances of happening. Helping clients stay engaged after their financial plan is created is the most effective way to maintain momentum.

Start small

People often struggle to follow through because seeing everything that may be required to achieve their goals all at once can be overwhelming. Every recommendation, task or new strategy becomes intimidating, which feels uncomfortable. When these feelings go unaddressed, action is delayed entirely.

Rather than focusing on everything at once, pick one objective to tackle, and start with small, manageable steps. Crossing smaller action items off the list will create a sense of progress, making long-term goals feel more achievable.

Financial planning is most effective when it's viewed as an ongoing process instead of a one-time event. And progress rarely comes from one major decision. Most often, achieving long-term goals requires you to consistently follow through on the smaller ones.

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

The standard 401(k) playbook leaves high-income professionals and business owners with a planning gap that's larger than most realize. Cash balance plans, when used correctly, can help close it.

For most American workers, a 401(k) and an IRA cover the retirement bases. For successful professionals and business owners earning far above the median household income, those same vehicles may provide less retirement savings capacity and current-year tax efficiency than other qualified plan structures.

The shortfall isn't a flaw in the traditional plans but rather a planning gap — a missed opportunity to select a plan that better fits their unique circumstances.

One potential tool for addressing that gap is the cash balance plan, which remains surprisingly underused, even among households that would benefit most.

How cash balance plans work

A cash balance plan is an IRS-qualified defined benefit pension plan, but it's designed to feel and function more like a defined contribution account. Each participant has a hypothetical "account" that grows in two ways each year:

• A pay credit (a percentage of compensation or a flat dollar amount set in the plan document)
• An interest credit (a guaranteed rate, often tied to the 30-year Treasury)

The employer makes annual, actuarially determined contributions to fund those credits, and those contributions are tax-deductible for the business.

The reason the structure is attractive is the contribution ceiling. A standard 401(k) plus profit-sharing combination caps total annual employer-plus-employee contributions in the low-to-mid five figures. A cash balance plan stacked on top of that 401(k) may allow age-weighted contributions ranging from roughly $100,000 to north of $400,000 each year for older owners and key employees depending on age, compensation, plan design and actuarial assumptions.

The older the participant, the more compressed the funding window, so the IRS permits larger annual contributions to reach a defined retirement benefit. As a result of the higher limits, the tax deferral impact may exceed that of traditional plans for certain high-income households.

Is there an income threshold where these strategies start to make sense?

There's no statutory minimum, but a practical one. We generally start exploring cash balance plans when a household has consistent, predictable taxable income above roughly $400,000, has already maxed a 401(k) and profit-sharing plan, and has cash flow that can support a meaningful pension contribution for at least three to five years.

Below that level, the design and administrative costs eat into the benefit, defeating the purpose. Above that starting level, particularly above $750,000, the potential tax savings may become substantial, and the plan's tax savings may outweigh the plan's design and administrative costs for some high-income business owners.

Why these strategies tend to be underused

If cash balance plans are this effective, why don't more eligible business owners use them? In our experience, the answer is rarely about the math but rather about who's at the table.

Many advisers and firms are organized around investment management, not plan design. A cash balance plan requires coordination among an adviser, a third-party administrator, an actuary, the business's CPA and often an ERISA attorney.

That coordination is real work and falls outside the day-to-day workflow of advisers who don't specialize in business-owner planning. The path of least resistance is to recommend a SEP-IRA or a slightly larger 401(k) match and call the conversation finished.

There's also a generational gap. Defined-benefit plans developed a reputation in the 1980s and 1990s for being inflexible, expensive to maintain and risky for the sponsor.

Modern cash-balance plans have addressed many of those issues because interest credits can be structured to match plan assets and because plans can be amended or terminated when circumstances change, but the legacy perception lingers.

Overlooked advantages and common misconceptions

The first misconception we hear is that a cash balance plan "locks up" money permanently. It doesn't. Once a participant terminates participation in the plan, balances may generally be eligible to be rolled over to an IRA, just like a 401(k), subject to plan terms and applicable distribution rules.

The plan itself can also be amended, frozen or terminated if the business's situation changes, provided the IRS rules on plan permanence are followed.

The second is that these plans are "only for huge companies." In fact, the sweet spot is the opposite. A solo physician, a four-partner law firm, a small dental practice or a consulting firm with a handful of professionals can often capture more relative benefit than a large enterprise because contributions can often be weighted toward owners while still satisfying applicable nondiscrimination requirements.

The third misconception is that cash balance plans are speculative. They are not standalone investment products. They are funded pension obligations, although plan assets are invested and subject to investment risk.

The investment portfolio is typically managed to a conservative target return that matches the interest credit, which may help reduce funding volatility for the sponsor.

Professionals consistently underestimate the benefit on the tax side. A $200,000 cash-balance contribution for an owner in a combined 45% federal and state bracket isn't a $200,000 retirement deposit.

It's potentially about $90,000 in current-year tax savings plus a $200,000 retirement deposit, depending on the taxpayer's specific circumstances.

Over a five- to 10-year funding window, the cumulative effect can materially affect retirement accumulation and long-term financial planning outcomes.

Who benefits most

The strongest candidates share three characteristics:

• High, stable income
• A closely held business or professional practice
• Owners who are typically older than the rank-and-file employees

We see this structure deployed most often in medicine and dentistry, law, engineering and architecture, accounting and consulting, independent investment management and family-held operating businesses with strong free cash flow.

Solo practitioners and 1099 professionals can also use this structure. For instance, a one-participant cash balance plan is administratively simpler and often has a dramatic impact.

At the other end, partnerships and professional corporations with multiple owners can design tiered benefit formulas that direct the bulk of contributions to the partners while still meeting coverage and nondiscrimination requirements.

How to know if it makes sense for your situation

A good first conversation answers four questions:

• What is your taxable income today, and how stable is it over a three- to five-year horizon?
• Are you already fully funding a 401(k) and a profit-sharing plan?
• What does your workforce look like? Specifically, how many non-owner employees are there? What are their ages and their compensation levels?
• What is your investment return assumption, and is it compatible with the conservative funding portfolio a cash balance plan typically requires?

Those answers, paired with a feasibility study from a qualified actuary, can often determine relatively quickly whether a cash balance plan can move the needle for your household and business. They will also tell you if it doesn't make sense, which is just as valuable, since not every high earner is a fit.

The bottom line

Cash balance plans aren't a loophole, a gimmick or a one-size-fits-all answer. They are an established, IRS-qualified planning tool that may be underused or less frequently discussed in the standard retirement planning conversation.

For the right business owner facing persistent high tax bills, they may help accelerate retirement funding and reduce current-year tax liability. They may also bring clarity to the rest of their financial plan, including estate, business succession and charitable giving.

If your income has increased beyond your retirement plan, consider consulting an adviser who specializes in implementing wealth management strategies to help mitigate the tax exposure that comes with that growth.

Cash balance plans are long-term retirement vehicles that involve investment risk, ongoing administrative and actuarial costs, and required annual funding obligations. Actual tax benefits and retirement outcomes depend on factors including investment performance, business cash flow, employee demographics, actuarial assumptions, and future tax law changes. These plans are not appropriate for every business owner or high-income professional.

Investment Advisory Services are offered through Mariner Platform Solutions (MPS), an SEC-registered investment adviser. Imperio Wealth Advisors and MPS are not affiliated entities.

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

Many bond strategists are cautious about high-yield debt these days. It's fully valued, they say, relative to other pockets of the fixed-income market. But the Pimco 0-5 Year High Yield Corporate Bond ETF (HYS) has been a standout among exchange-traded bond funds in the Kiplinger ETF 20 in recent months.

HYS has held up well since the start of the year, and its 8.8% return over the past 12 months outpaced 59% of its high-yield bond fund peers, as well as the Bloomberg U.S. Aggregate Bond Index. (All returns are through April 30.)

The ETF's tilt toward short-term debt and its robust 6.4% yield helped. Pimco 0-5 Year High Yield boasts a short, two-year duration (a measure of interest rate sensitivity). That has been a plus in recent months as rates have inched up amid a multitude of worries, including the war in Iran and persistent inflation, says comanager David Forgash.

Bond prices and interest rates move in opposite directions; a two-year duration implies that if interest rates rise by one percentage point, the ETF's net asset value will fall by 2%. Sizable exposure to the energy sector, one of the top-performing junk sectors over the past year, has also been a boon.

HYS fund managers have a smart investing strategy

This Pimco ETF is technically an index fund, but its four comanagers combine proprietary quantitative models and the firm's big-picture views to actively select sectors and bonds for the portfolio to outperform the benchmark.

"It's about getting ahead of the market," says Forgash, adding they also "dig in deep," researching the securities they invest in to "avoid potential blowups."

Recently, the managers have been buying selectively in battered industries, including software, which cratered amid artificial-intelligence disruption worries, and building materials, which declined as rising construction costs and affordability concerns weighed on investor confidence in the sector earlier this year.

Over longer hauls, this short-term high-yield fund outpaces its peers. Its five-year return, 5.1% annualized, beat 92% of its competition.

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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