Stocks closed out a volatile week on a relatively quiet note as market participants caught their breath after Thursday's broad-based beatdown.

The tech-heavy Nasdaq Composite made a valiant attempt at a rebound as several tech stocks bounced, but Friday's gains put just a small dent in its weekly decline. Moves by the broader S&P 500 and blue-chip Dow Jones Industrial Average were far less impressive.

At the close, the Nasdaq was up 1.1% at 24,579 — still in correction territory, but paring its week-over-week deficit to 3.4%. The S&P 500 finished the day up 0.3% at 7,376, and the week down 2.7%. And the Dow slipped 0.5% Friday to 51,285, and was 0.9% lower on the week.

Markets sold off sharply Thursday on concerns that Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout.

Several tech stocks that were hit the hardest on Thursday swung higher on Friday, including memory chipmaker Micron Technology (MU, +5.1%) and artificial intelligence (AI) bellwether Nvidia (NVDA, +2.8%).

However, reports that Microsoft (MSFT, -1.0%) plans to use fewer neoclouds, which provide high-performance infrastructure to power AI workloads, hung over the tech sector.

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CoreWeave (CRWV, +6.3%), one of Wall Street's most notable neoclouds, headlines next week's earnings calendar. Wall Street is forecasting a wider per-share loss than the company reported in the year-ago period, though revenue growth is expected to be strong.

Airbnb soars on earnings beat

Outside of the tech sector, Airbnb (ABNB) jumped 11.7% after the online travel company reported third-quarter earnings of $3.16 per share, up 43% year over year and more than Wall Street expected.

Revenue also beat estimates, surging 19% to $4.9 billion, the fastest top-line growth in three years.

UBS Global Research analyst Stephen Ju says Airbnb's Q3 results "were the standout" among online travel agents. And while the company is more shielded from major uncertainties in the Middle East and Europe, "more important consideration for us on ABNB shares is the company's pace of innovation for which is seemingly arriving at a faster clip."

Ju maintained a Neutral (Hold) rating on ABNB after earnings, but raised his price target on the consumer discretionary stock to $191 from $181.

DraftKings spirals after lowering guidance

DraftKings (DKNG), on the other hand, plunged 21.3% — its worst day since November 2022 — after the sports gambling company reported a top- and bottom-line third-quarter miss. DKNG also cut its full-year forecast, saying its investments in prediction markets will cut into profits.

"Investors are disappointed by the magnitude of PM investment given the looming regulatory risk around sports event contracts," says BofA Securities analyst Julie Hoover. "DKNG's desire to be best-in-class has driven its top-line success, but greater guardrails around spend, particularly in the current regulatory backdrop, are critical to drive the bottom line and stock."

Hoover reiterated her Buy rating on DKNG after earnings, saying prediction markets are "a potential source of upside" for the stock.

Jobs data blows past expectations, CPI on deck

In economic news, data from the Bureau of Labor Statistics showed the U.S. added 165,000 new jobs in October, blowing past expectations for 59,000 jobs. The unemployment rate dropped to 4.1% from 4.2%.

"The job market strengthened in October, with considerably better payrolls growth than expected," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank. "AI is clearly weighing on some types of white-collar jobs, but not all."

Adams adds that the Fed "will be reassured by the October jobs report, but if the AI sell-off deepens, they could still refrain from a rate hike at their last decision of the year."

According to CME Group FedWatch, futures traders are currently pricing in a 77% chance the Fed will raise interest rates in December — up from 71% a week ago. This is subject to change following the release of the October Consumer Price Index (CPI) report next Tuesday morning.

While headline inflation is expected to moderate as gas prices eased, it will likely remain well above the central bank's 2% target.

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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…

The high-profile Stratos data center in Box Elder County, Utah, highlights the rising peril for AI developers. Fierce opposition and litigation have hindered the start of the project. The facility would use more electricity than the entire state if fully built out to 9 gigawatts of power and would emit enough heat to hike local temperatures a few degrees. Backers say the project will initially use 1.5 gigawatts of power and have launched a campaign to combat attacks they see as unfair or inaccurate.

But other massive data centers have fewer roadblocks and are on pace for completion, according to Epoch AI, a market research firm that tracks construction using satellite imagery, permits and public documents.

To rank the top projects, Epoch AI has converted the estimated capacity of each data center to the equivalent number of Nvidia’s H100 graphics processing units, a standard industry metric.

Source: Epoch AI (computing capacity measured by H100-equivalents)

OpenAI is scheduled to have two of the biggest data centers in 2030, with Stargate New Mexico in Santa Teresa and Stargate Shackelford in Abilene, Texas. Each will cost about $60 billion, with major financial backing from SoftBank and Oracle and will use over 1 gigawatt of power for millions of AI chips. The Stargate project is a $500 billion effort by OpenAI to “unlock the next generation of AI breakthroughs.”

The next-biggest facilities in 2030 will be Microsoft Fairwater in Wisconsin, Meta Hyperion in Louisiana and QTS Cedar Rapids in Iowa. These projects will be far bigger than today’s top data center, SpaceX’s Colossus 2 in Tennessee. Keep an eye on the rocket company’s aggressive plans for AI data centers, including efforts in 2027 and beyond that could send it climbing up the 2030 rankings.

Source: Epoch AI (computing capacity measured by H100-equivalents)

Currently, Virginia is home to the most data centers, followed by Texas. Texas is expected to overtake Virginia in coming years, having more projects in the pipeline. Other states with lots of planned construction include Ohio, Arizona, Iowa and Nevada.

However, future projects come with some uncertainty and assume demand for AI computing keeps soaring.

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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For many years, sunshine, sandy beaches, great golf courses, warm year-round weather and exclusive luxury communities drew an influx of new residents to Southwest Florida and Tampa Bay.

It has also become more than just a paradise for sun seekers. The "best" coast is now one of the most desirable destinations for high-net-worth individuals looking to relocate — not only for its exceptional lifestyle but for financial reasons, as well.

This area of Florida has emerged as a strategic destination for wealth preservation and long-term financial planning. Favorable tax policies, strong asset protection laws and a business-friendly environment are attracting entrepreneurs, executives, investors and multigenerational families, seeking to optimize both their quality of life and financial future.

No state income tax

Florida has welcomed more than 2 million new residents in the past decade, which has led to significant job growth and created a powerful influx of capital, entrepreneurship and wealth migration.

The state's absence of a personal income tax continues to be a significant driver of relocation decisions, particularly among individuals whose income is derived from asset growth, liquidation events and investment returns.

As many affluent families evaluate their income tax exposure and state of residency, this can have a meaningful impact on overall wealth preservation and financial planning.

For investors, this tax advantage can enhance cash flow, improve capital retention and provide greater flexibility when pursuing investment opportunities, charitable giving and succession planning.

Homestead exemption can save thousands

If someone is considering making Florida their domicile state, there are several financial advantages to consider.

Residents of all states are subject to federal income tax, but Florida residents enjoy no state income tax, estate tax, inheritance tax or intangible tax. This usually means tax savings on IRA withdrawals, pensions, annuities and employment income. However, if you own assets or derive income in or from another state, you might still be subject to income and estate tax in that state.

For example, a Wisconsin resident making more than $280,950 pays a state income tax of 7.65% over and above the federal income tax. A Florida resident's savings in this case is more than $20,000. IRA withdrawals are considered income, too.

Florida residents also enjoy property tax savings and Florida homestead creditor protection. Making your Florida home your homestead with the property tax assessor can lead to a $50,000 reduction in the taxable assessed value of your home.

In addition, the Save Our Homes Property Assessment Cap (PDF) limits the increase in your home's assessed value to no more than 3% annually — regardless of that year's actual appreciation. There are even portability provisions if you sell your home and acquire a new one.

More money to heirs

For high-net-worth families, Florida's absence of a state estate tax and inheritance tax can offer a significant advantage in preserving and transferring wealth. Florida permits a greater portion of a family's wealth to pass to beneficiaries without state-level taxation, which can be particularly valuable for families with substantial investment portfolios, business interests, real estate holdings and other significant assets.

The resulting tax efficiency can also support long-term portfolio growth by allowing more capital to remain invested rather than being directed toward state tax obligations. Over multiple generations, these savings might compound substantially, enhancing overall family wealth and providing greater flexibility in estate and succession planning.

The Florida wealth management industry is well equipped to assist families with sophisticated investment management, trust administration, financial planning, wealth transfer strategies and multigenerational guidance.

A strong housing market

Tampa Bay and Southwest Florida are attractive locations for long-term real estate investments. Several factors driving high-net-worth individuals to invest in real estate include:

Continued population growth. From Tampa to Marco Island, the broader Gulf Coast corridor has experienced substantial population growth during the past decade, with six regional counties collectively increasing from roughly 3.2 million residents in 2015 to more than 4.0 million in 2025 — an increase of approximately 25%.

Limited coastal land. As affluent individuals and businesses continue relocating to the region, demand for premium properties is increasing while available land remains constrained. This supply-demand imbalance can support long-term property appreciation, pricing strength and wealth preservation for strategically positioned investors.

Strong tourism and rental demand. Despite several hurricanes, tourism numbers have increased significantly since COVID. Southwest Florida International Airport (RSW) reported a record 11.15 million passengers in 2025, marking the busiest year in the airport's history.

Ongoing redevelopment and reinvestment. Southwest Florida continues to appeal to affluent buyers because of its new luxury residences, upgraded properties and modern community amenities, which elevate market desirability. Meanwhile, infrastructure improvements can strengthen resilience to climate-related risks. These enhancements might also support long-term property appreciation, premium rental rates and stronger demand from financially stable, long-term tenants.

The bottom line

Florida's Central and Southwest Florida coastlines have evolved into far more than premier lifestyle destinations. They offer a distinctive combination of financial, legal and lifestyle advantages that resonate with high-net-worth individuals and families.

The absence of a state income tax, favorable estate planning environment, robust homestead protections and strong real estate fundamentals create a compelling framework for wealth preservation and long-term financial stewardship.

Coupled with a desirable quality of life and an increasingly sophisticated business and investment ecosystem, the region has established itself as a leading destination for those seeking to align their personal, family and financial objectives within a single strategic location.

Hood Craddock, CPA, is director of family office services at Florida Trust Wealth Management in Tampa Bay and relationship manager for many families. He specializes in serving clients with complex estates, alternative and special assets and real estate investments including development.

James McArthur is executive vice president on the family office services team at Florida Trust Wealth Management in Tampa Bay. He has more than 30 years of experience in management consulting, family office counseling, restructuring, special situations, turnarounds and commercial finance.

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

Editor's note: This article is the second in a three-part series on the benefits of taking a more thoughtful and proactive approach to financial planning. Part one is Protecting Family Wealth Means Allowing Your Kids to Get Involved — and Letting Them Make Some Mistakes. Here's Why.

In the first article of this series, I wrote about a quiet transition moment that happens as children move from financial dependence toward financial awareness and responsibility.

The next quiet transition moment is in the opposite direction, when we recognize that our aging parents may one day need help managing the lives they have spent decades building.

There is rarely a single moment when this shift begins. Your parents may be retired but still independent and active — traveling, volunteering and enjoying life. Nothing appears to require immediate attention, yet this is the best time to start planning.

As a member of the "sandwich generation," I know that caring for aging parents while juggling your own family's needs and your career can be challenging.

You'll need to have the right legal structures and documents in place, as well as an understanding of available resources. But the first step is to create continuity without making parents feel that their independence is being questioned or taken away.

Start with permission, not an account statement

Adult children often approach this conversation by asking for information: Where are the accounts? What are the balances? Is there a power of attorney? Those are important questions, but they may not be the best place to begin.

To a parent who has managed the family finances for decades, a request for information can sound like a request for control and signal distrust. The child intends to help, but the parent may hear, "You can no longer handle this."

A better opening is to ask what the parent wants for themselves. For example, ask your parents: If you ever needed help, who would you want to be involved? What would you want that person to know? What would make it easier for someone to carry out your wishes without disrupting your life?

This reframes the conversation around preserving independence. Good planning helps a parent remain in control for as long as possible and ensures that, if help is needed, it arrives on the parent's terms.

Build a roadmap, not a balance sheet

Adult children don't necessarily need to know their parents' net worth or see every account balance. Instead, what's important is how to find the right information when the time comes.

That roadmap might identify:

• Financial institutions and insurance policies
• Debts and recurring obligations
• Trusted advisers
• The location of important records

It should also address digital access. Increasingly, the missing information is a password, an authentication device or an online account that no one else knows exists.

Imagine trying to reconstruct a parent's financial life from a hospital waiting room. That is not the moment to learn that no one knows where the original documents are stored or whom to call about an investment account.

A plan should be reviewed periodically because advisers change, accounts move and instructions become outdated. A plan that can't be found or followed isn't much of a plan.

Make sure authority matches responsibility

Information alone doesn't give someone the legal authority to act. A parent may say, "If anything happens, you know what to do," but good intentions don't grant access to an account or the legal ability to make a decision.

Powers of attorney, healthcare directives and estate documents should be addressed while parents have the capacity and time to make thoughtful choices. The rules vary by state, so families should work with qualified legal counsel.

The conversation should go beyond signing documents. Does the appointee understand the role? Is the document structured to work when needed? Do relevant family members know whom the parent selected and why?

In my experience, the "why" matters the most. For example, if one sibling is selected and another isn't, the decision can be misread as a judgment about love, trust or competence. Meanwhile, the child who is selected may not even want the responsibility or have the time or expertise to fulfill it.

Responsibilities can also be divided, or an independent professional or institution may be appropriate. The desire to treat children equally does not always require identical roles. The key is communication because, as we all know, people tend to fill unexplained differences with their own stories.

Create a succession plan for the family

Business owners understand that an organization shouldn't depend indefinitely on one person holding all the knowledge. Families should apply the same principle to their own financial lives.

In many households, one spouse manages investments, the other pays household expenses, and only one knows the advisers. That system may work for decades. The vulnerability becomes clear when the person holding that knowledge can no longer manage it.

Ask yourself a simple question: Who is the backup?

The answer doesn't require an immediate handoff. An adult child might join an annual meeting with the parents' adviser. A spouse who hasn't managed the investments might receive a plain-language overview. A trusted person might know where the roadmap is stored without having access to use it today.

As in business succession, the objective isn't to push out the current leader. It's to protect what that leader built and make an eventual transition less disruptive.

Plan for life, not only for death

Estate planning often focuses on what happens after death. Aging raises equally important questions about the years before it.

• Where would your parents want to live if maintaining their home became difficult?
• Would they prefer help at home, a move closer to family or a community with increasing levels of care?
• Who will coordinate appointments, finances and caregivers?
• What resources are available?
• How might care affect both the parents and their children?

These are not only financial questions; they also involve housing, health, time, dignity and family relationships. Money creates choices, so the conversation should begin with the life the parents want to preserve. Only then can the family determine whether the legal and financial plan supports it.

Life doesn't unfold as a neat sequence of transactions. Parents may remain independent for many years, or circumstances may change suddenly. The objective is not to predict the precise moment when help will be needed but rather create enough clarity and continuity that the family can adapt when it is.

If your parents are healthy and managing everything well, this conversation can understandably feel premature. Yet, in many ways, that is exactly the point.

In the final article of this series, I will turn to another kind of quiet planning moment: The major life events that never happen. This includes a long-term partnership without marriage, a business that never got sold, and caring for loved ones falling outside the traditional definitions of family.

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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.

Retirees wondering where to invest their money should keep this in mind: Investments don't happen in a vacuum. Every investment has a role to play, whether that's providing short-term income or long-term growth.

This means you have plenty of questions to consider as you review the options. Not everyone will have the same questions, but some that my clients have raised recently include:

• What's happening with interest rates, and how should that affect the investing choices you make?
• Is the commodities market worth a look? Those considering making gold and silver a part of their portfolios must weigh whether to buy and, if they do, how much.

As you look for answers, the goal should be to find strategies you can use to take advantage of market upsides while limiting losses on the negative side of the ledger.

Of course, while some investments are safer than others, retirees shouldn't eliminate all risk. If they do, their portfolios could come under assault from inflation, which is a risk in itself.

If all of this sends your head spinning, don't let it. With the right plan, you can both diversify your investments and ladder them, drawing from some accounts now to live on while allowing others to grow over time.

This approach can help improve the odds of a successful retirement.

Exploring options and strategies

Let's explore some of those questions to get a feel for the approaches you should be taking.

We remain in a rising interest rate environment, with interest on debt eating into our quality of life. It might be a long time before we see deflation.

For decades, there has been a 4% rule for withdrawing money from retirement accounts. Essentially, this rule said that in the first year of retirement, you would withdraw 4% from your accounts. Then each year afterward, you would withdraw 4% plus a little more to cover inflation. The theory was that, with this approach, your money would last about 30 years.

There's a problem with this 4% rule, though. It came about in the 1990s when interest rates were declining but still higher than today, allowing a larger return on investments. Also, life expectancy has increased since then, which affects how long retirees need their money to last.

This means you may need to reconsider whether the 4% rule still works for you or whether a different plan for withdrawals from savings should come into play.

Many people wonder whether they should include commodities, such as gold and silver, in their portfolios. The short answer to that is yes, but with the usual caveat. Commodities can be a nice hedge against inflation and a way to further diversify your portfolio.

But don't go overboard, placing too much of your faith and your money in an investment that might not provide the returns other investment options produce.

Gold and silver don't pay dividends the way stocks do. And like many other investments, they come with risk. Their value can drop, which means you should be careful about allowing commodities to occupy too large a percentage of your portfolio.

Of course, that's true for many investments. Diversification remains a key to avoiding disaster when markets don't cooperate as we'd like.

Planning for the future

So, what's a good approach to making the most of your money over the course of what could be a long retirement, enjoying life now while doing all you can to make sure your money lasts another three decades or so?

Imagine investments as a group of race cars revved up and ready to explode from the starting line. You might place a bet on one of those cars and live and die with the results. But what if you didn't have to choose just one car? What if you could take a more flexible approach and own a share of each race car, benefiting from the different advantages each can provide in its own short-term or long-term lane?

In many ways, this reflects the approach our firm takes to retirement income planning. We divide a client's assets among four buckets, each with a different time horizon and purpose. Because the money is not all needed at the same time, each bucket can be positioned differently based on the client's income needs, goals and tolerance for risk.

The objective is to provide dependable income for today while allowing the assets intended for later years to remain invested for long-term growth.

The first bucket is designed to fund approximately the first five years of retirement. Because this money may be needed soon, the priority is stability and liquidity, not maximizing returns. It might include cash, money-market funds or other conservative holdings.

The second bucket is intended for the following five years. With a longer time horizon, it may include instruments such as CDs, fixed annuities or high-quality bonds that seek to provide predictable interest while limiting market exposure.

The third bucket is positioned for income needs approximately 10 to 20 years into retirement. It may include a combination of equities and a fixed index annuity, providing greater growth potential while incorporating some protection against market downturns.

The fourth bucket is the long-term growth bucket. Because these assets may not be needed for 20 years or more, they can generally accept greater market risk in pursuit of the growth needed to help offset inflation and support income later in retirement.

By matching each investment strategy to the period when the money will be needed, clients are less likely to depend on volatile investments for near-term income. The result is a retirement plan designed to balance current income, stability, flexibility and long-term growth.

Conversation with a professional

Many people planning for retirement yearn for safety and eschew risk as much as possible.

This is where they'd benefit from a conversation with a financial adviser. While there are strategies that can produce income with minimal risk, playing things too close to the vest can limit flexibility and hurt a portfolio over the long term.

An adviser can help you determine your risk tolerance, explain the consequences of being too risk averse and help you create a retirement plan that will work best for you.

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.

It was a bloodbath on Wall Street Thursday, with stocks selling off sharply as market participants took profits on several of this year's biggest gainers. By the time the dust settled, the Nasdaq Composite had suffered its biggest one-day percentage drop since the April 2025 tariff tantrum. Meanwhile, the Cboe Volatility Index (VIX), also known as the market's "fear gauge," hit its highest point since March.

At the close, the tech-heavy Nasdaq was down 5.5% at 24,315 — in correction territory, or more than 10% below its most recent high of 27,599.79 from October 6. The blue-chip Dow Jones Industrial Average surrendered 3.4% to 51,523 and the broader S&P 500 plummeted 4.4% to 7,353.

All 11 S&P 500 sectors closed lower today, with technology by far the biggest decliner. Memory stocks Micron Technology (MU, -17.5%) and Sandisk (SNDK, -22.3%), which have tripled and quadrupled this year, respectively, on enthusiasm for all things artificial intelligence (AI), were two notable decliners.

And Nvidia (NVDA), a bellwether in the AI industry, slumped 9.3% — its worst day since shedding 17% in the DeepSeek crash on January 27, 2025.

Several hyperscalers who have announced massive spending on AI initiatives also fell, including Alphabet (GOOGL, -2.2%), Meta Platforms (META, -4.0%) and Microsoft (MSFT, -3.6%).

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Why are stocks selling off?

Concerns that Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout sparked the sell-off.

The "tech-led correction" is also being "driven by valuations that became completely disconnected from reality," says David Bahnsen, chief investment officer at The Bahnsen Group. "Thursday's market action is what happens when euphoria and hype become the reason why stocks go up, rather than fundamentals, and that's exactly what has been happening with tech stocks."

While opinions may differ across Wall Street, Bahnsen does not see today's rout as a buying opportunity, considering "valuations in the tech sector remain way too high." Instead, he advises investors to "focus on more defensive parts of the market, such as consumer staples and energy stocks. These areas may be less exciting, but they have stable cash flows, and they include companies that have a long history of growing their dividends."

Qualcomm sinks on weak outlook

Qualcomm (QCOM) was hit with a double whammy Thursday, sinking 9.5% on broad-market headwinds and a disappointing earnings outlook.

The chipmaker reported fiscal fourth-quarter earnings of $2.17 per share on revenue of $10.4 billion, both higher than Wall Street expected. But its fiscal 2027 first-quarter earnings forecast of $2.25 per share at the midpoint is below analysts' estimate of $2.27 per share.

"While we recognize QCOM's leading position in modem and single-chip integrated chipset solutions, we believe the company is over-exposed to the mobile market, with its diminishing growth and increasing competition," says Oppenheimer analyst Rick Schafer.

And while Qualcomm is diversifying its revenue streams, including by expanding into the data center market, Schafer is maintaining "a wait and see approach" — and a Perform (Hold) rating — "as efforts outside core handset take root."

AppLovin stock bucks sell-off, soars 31%

Not all AI stocks sold off today. AppLovin (APP), which operates an AI-powered mobile ad platform, jumped 31% — its best day in two years — on a well-received earnings report.

APP's third-quarter earnings of $4.30 per share were up 76% year over year, while revenue jumped 55% to $2.18 billion. The results beat analysts' estimates too.

"We previewed Q3 as the test, and AppLovin passed it," says Wedbush analyst Alicia Reese, who reiterated an Outperform (Buy) rating on APP and raised her price target to $600 from $560 — nearly 70% above current levels. And considering Q4 is "the seasonal peak" for advertisers, Reese believes "e-commerce should inflate" AppLovin's fourth-quarter results.

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As an incentive to save for retirement, many employers offer to match employees' retirement contributions up to a certain percent.

Now the federal government is getting on board, launching a new program called the Saver's Match.

Starting in 2027, the government will match retirement contributions up to 50% of the first $2,000 for qualified low- and moderate-income workers. Understanding how it works now can give potential participants time to figure out if they qualify and how much they might be able to realistically save once the program begins.

The program replaces the Saver's Credit, which offered a nonrefundable tax credit to lower-income earners who made eligible contributions to employer-sponsored retirement accounts, IRAs or an Achieving a Better Life Experience (ABLE) account. As a result, someone with little to no federal income tax liability could have received little to no benefit from the credit.

However, the Saver's Match is different. Under this program, the federal government deposits the contribution directly into an eligible retirement account, giving qualified workers the benefit even if they owe little to no federal income tax.

Who qualifies

To be eligible for the Saver's Match, participants must be at least 18, cannot be claimed as a dependent on another person's return and cannot be considered a student as defined by the IRS. Workers must also make contributions to their retirement plans, although no minimum amount is required. However, there are income limits.

The IRS uses your income and tax filing status to determine eligibility and the size of the match. For example, a married couple who earns up to $41,000 per year, and files jointly, could receive the full 50% match.

Partial matches will be given to qualified couples who file jointly, earning from $41,001 to $70,999 per year. If both spouses qualify and each contributes at least $2,000 to an eligible account, the couple could receive a combined $2,000 federal match.

For single filers, a full match will be given to those earning up to $20,500 and $30,750 for the head of the household. As income increases, match rates decrease.

In addition to meeting the income and eligibility requirements, workers must also make contributions to qualifying retirement accounts, such as traditional and Roth IRAs, 403(b)s, governmental 457(b) plans and other employer-sponsored accounts. Contributions must also be new, meaning trustee-to-trustee transfers or rollovers don't count.

Although the maximum match is based on $2,000 in annual contributions, workers don't have to save that amount to benefit. Even smaller contributions can qualify for a match.

For example, someone who qualifies for the 50% match can only afford to contribute $20 per month. Over 12 months, that adds up to $240. With the match program, the government will also contribute $120, bringing the total to $360 in retirement savings that year.

For workers who already receive an employer match, an additional federal match only furthers the incentive to save for retirement. Since the two incentives are separate, qualified workers can benefit from both. When calculating the Saver's Match, only the employee's contributions will be considered.

Check your budget

While the Saver's Match program offers another incentive for people to save for retirement, maximizing the benefit might not make sense for every household. Those who have little to no emergency savings, are struggling to cover bills, or have high-interest credit card debt, might need to balance these priorities with saving for retirement.

Rather than focusing on getting the full match, workers should consider how much they can realistically afford to contribute without creating another financial challenge.

Although the Saver's Match doesn't take effect until next year, workers can prepare now. Start by determining whether household income is expected to fall within the eligibility limits.

Review retirement plans offered through your employer and determine if they offer a match. If your employer doesn't offer a retirement plan, explore opening an IRA.

As you plan for the program, review your current household budget and determine how much you could realistically contribute each month starting in January.

For someone expecting to qualify for the full 50% match, saving around $167 per month adds up to slightly more than $2,000, meaning you could earn the maximum $1,000 federal match.

The bottom line

Unlike the Saver's Credit, the Saver's Match could give qualifying workers a valuable opportunity to increase retirement savings.

Taking full advantage of the program doesn't mean you have to contribute the maximum amount. The goal is to find a contribution amount that fits within your budget while continuing to work on current financial priorities.

By understanding the eligibility requirements, reviewing existing employer retirement plans and determining an affordable amount to contribute each month, workers can enter 2027 with a plan for the new program.

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

One of the greatest challenges with investing is that nobody can predict the future. This makes estimating the value of your investments far from an exact science.

After all, you have no idea what the market will do tomorrow, let alone 20 years from now. This is where rules of thumb like the 10-5-3 Rule come in handy.

The 10-5-3 Rule offers a simple way to estimate future investment returns based on how much of your portfolio is in stocks, bonds and cash.

Let's take a look at how the 10-5-3 Rule works and see whether it's reliable enough to use for your portfolio.

What is the 10-5-3 Rule?

The 10-5-3 Rule is a guideline that assumes you can expect the following average annual returns over the long term:

• 10% from stocks;
• 5% from bonds; and
• 3% from cash and cash equivalents, such as Treasury bills and money market funds.

These percentages aren't arbitrary.

According to the Wells Fargo Investment Institute, large-cap stocks returned 10.5% on an annualized basis from 1926 through 2025. Long-term Treasury bonds returned 5%, short-term T-bills 3.3%.

But it's important to distinguish between historical averages and future expectations.

"There's a big difference between what the market has averaged historically and what an investor is actually going to experience," says Wealth Guide Financial Founder Mike McCracken.

McCracken considers the 10-5-3 Rule a decent starting point if you're new to investing. For more serious planning, though, you probably need more depth.

How can you use the 10-5-3 Rule?

One practical use for the 10-5-3 Rule is to estimate a portfolio's average annual return based on its asset allocation.

Christopher Walsh, regional marketing director and financial advisor at Capital Choice Financial Group, says you can do this by multiplying the percentage of your portfolio invested in each asset class by its corresponding expected return.

For example, say you have $100,000 invested as follows:

• 60% in stocks: $60,000 earning a hypothetical 10% would generate $6,000.
• 30% in bonds: $30,000 earning 5% would generate $1,500.
• 10% in cash: $10,000 earning 3% would generate $300.

If you add those amounts, you'll get a hypothetical average annual gain of $7,800, or a 7.8% annual rate of return.

Walsh likes to pair the 10-5-3 Rule with the Rule of 72, which estimates how long it takes an investment to double. To use the Rule of 72, simply divide 72 by your average annual return.

At 7.8%, your portfolio would roughly double every nine years, assuming consistent returns and no contributions or withdrawals.

Of course, neither rule accounts for the stock market’s inevitable ups and downs, which is why they're better used as guidelines rather than planning tools.

Does the 10-5-3 Rule still apply in 2026?

You may have read that past returns do not guarantee future results. This disclaimer is included in investment disclosures for a reason, apart from federal regulations.

Indeed, it's a foundational market rule: What stocks did over the last decade may not match what they do in the next decade.

For instance, Vanguard's July 2026 capital markets forecast projects that U.S. stocks will return anywhere from 4.2% to 6.2% in the coming decade. That's a lot lower than the 10% assumption used in the 10-5-3 Rule. Vanguard also projects U.S. bonds to return 4.3% to 5.3%, U.S. cash 3% to 4%.

Walsh prefers to plan using a 7% to 9% average annual return assumption, depending on time horizon and risk tolerance.

He believes the 10-5-3 Rule is more useful for younger investors because historical averages are generally taken over a 30-year or longer time period. So "you really need a good long runway to improve your probability" of reaching these averages.

McCracken takes a more cautious view, particularly when planning for retirement.

"When I'm working with someone getting ready to retire, I'm much more interested in what happens when the market doesn't cooperate," he says. "A retirement plan needs to work in good markets, bad markets and everything in between."

He prefers to use more conservative assumptions and stress-test what happens in uncooperative markets.

What are the limitations of the 10-5-3 Rule?

The biggest limitation of the 10-5-3 Rule is that it makes the market sound more predictable than it actually is. "If only it were that simple," McCracken says.

Some years, you may earn more than the rule predicts, while other years may return less. McCracken points to 2022, when investors "with a traditional stock-and-bond portfolio learned a painful lesson."

Rising interest rates caused both stocks and bonds to tumble, resulting in the fourth-worst year for the S&P 500 since its 1957 inception, with a loss of 18%, and a 13% decline for the Bloomberg Aggregate Bond Index.

The rule also overlooks investment fees and taxes, as well as contributions or withdrawals, all of which can impact your overall return.

Another important consideration is your level of diversification. Walsh cautions that investors holding only a handful of stocks may see returns that differ substantially from historical market averages.

He recommends diversifying across companies and sectors, with exchange-traded funds (ETFs) offering one relatively inexpensive way to do so. Still, even a diversified portfolio won't eliminate market losses.

If you're retired, you should be especially careful about using the rule. A market decline early in retirement can significantly alter how long your savings last. This is known as sequence of returns risk.

As McCracken puts it, "You don't get to spend your average rate of return, you can only spend the actual returns you receive."

Should you use the 10-5-3 Rule?

The 10-5-3 Rule can have a place in your toolkit. But it's not a substitute for true financial planning.

Ultimately, your investment time horizon, risk tolerance and financial goals should determine how you structure your portfolio, especially when you're investing for major goals like retirement.

McCracken suggests asking yourself a different question: "What rate of return do you actually need to earn to make your retirement plan work?"

If you can reach your goals with a 5% rate of return, for example, there's little reason to take unnecessary risk to chase 10%.

The goal should be to reach your goal taking on only as much risk as you need and can stomach.

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"The jobless rate is lower than a year ago, and payroll growth is noticeably above last year's pace," Federal Reserve Chair Kevin Warsh said during his press conference following the October Fed meeting. In addition to a jobless rate of 4.2%, Warsh cited a four-week moving average for unemployment insurance claims that continues to run at the lowest level in generations. "So, on the employment side of the Fed's dual mandate, conditions are quite positive," Warsh concluded.

That was despite a cooler-than-expected September jobs report. A hotter-than-expected October jobs report underscores Warsh's conclusion that the employment situation is indeed quite positive. At the same time, it suggests the central bank has even more evidence to support a quarter-point rate hike at the December Fed meeting.

According to the Bureau of Labor Statistics, the U.S. added 165,000 new jobs in October, well above a consensus forecast of 59,000.

The unemployment rate, which is derived from a separate survey, ticked back to 4.1% from 4.2%.

At the same time, job growth for August (+53,000 to +186,000) and September (+31,000 to +60,000) was revised up, resulting in a combined 84,000 more jobs than previously reported.

Healthcare added 42,000 jobs in October, higher than an average monthly gain of 31,000 over the prior 12 months. Transportation and warehousing added 25,000 jobs, while manufacturing continued to trend up with 19,000 new jobs.

A strong jobs report, combined with persistent pressure on consumer and producer prices, further supports expectations for a rate hike in December.

According to CME FedWatch, futures traders are pricing in a 72.8% probability the central bank will increase the federal funds rate by a quarter-percentage point when it meets next month, up from 66.9% one day ago and 70.7% one week ago.

ADP jobs report was better than expected

Wall Street got a peek at how things are going in the labor market on Wednesday morning with the ADP National Employment Report, which showed private payrolls rose by 86,000 in October, down from 90,000 in September but above the 75,000 economists expected.

The industries seeing the largest increases in jobs were trade, transportation and utilities; education and health services; and leisure and hospitality. Professional and business services and natural resources and mining saw the biggest declines in positions.

What Wall Street has to say about the October jobs report

"The strength in job creation was broad based, with few sectors showing weakness during the month of October. The rate of unemployment was lower in October, at 4.1%, even as the labor force participation rate increased slightly. The 3-month average change in jobs increased to 137,000, up from a rate of 79,000 for the three months ending in September. The strength in job creation during the last several months is in line with other surveys and shows that the U.S. economy continues to grow at a strong pace. For the Federal Reserve, this should allow them to concentrate on the inflation side of their mandate. We expect the Fed to increase the federal funds rate by 25 basis points in December." - Eugenio J. Alemán, Ph.D., Chief Economist, Raymond James

"Payrolls, which have been all over the place this year, beat this month: jobs gains came in at 165,000. The prior two months were also revised up by 84,000. More worrisome for the Fed is that average hourly earnings grew 0.4%, above the 0.3% expected. This could be a one-month fluctuation, but it's the fastest wage growth in nine months. Lack of immigration is creating a tighter labor market than the headline job gain figures would suggest. If this puts upward pressure on wages, it's likely to feed inflation. This creates urgency for the Fed, and, frankly, is why I believe they should have hiked in October. I don't foresee the Fed doing anything as rash as hiking 50 bps in December, but, in hindsight, they might wish they had fit two more hikes into 2026. As it is, I see the Fed hiking 25 bps in December and probably at least two to three more times in the first half of 2027." - Tom Graff, Chief Investment Officer at Facet

"Friday's stronger-than-expected jobs report is a relief, and suggests that the labor market is still able to produce jobs even in this elevated interest rate environment. The report by itself is unlikely to sway the Federal Reserve's rate calculus as of now, and we would still expect a December rate hike." - Clark Bellin, Chief Investment Officer at Bellwether Wealth

"Great numbers across the board and the Fed has one less worry for now. 2027 is going to matter way more with the perceived threat to AI and data center spend. I will give a warning to the newly elected Democratic majority before they take power. Be wise and think before implementing a widespread attack on AI and related construction. AI has been the driver for consumer spending, labor and GDP for some time now. Every decision has a cost, and if Dems come out of the gate, blocking AI and the associated spend, that will have widespread implications for the labor market and economy." - Byron Anderson, Head of Fixed Income at Laffer Tengler Investments

"The economy is doing well — it is growing at 3.4%, corporate earnings are up more than 25% year-over-year — and it can handle higher oil prices and higher interest rates. Despite an oil shock and a Federal Reserve that is raising rates (albeit slowly), the unemployment rate actually dropped and the 4.1% level is at or close to full employment. Trees don’t grow to the sky and of course there is a limit to how high interest rates can go before something breaks, but the day-to-day knee jerk reaction to changing narratives and daily news is nothing new – as someone much smarter than me said, 'In the short run the market is a voting machine, but in the long run it is a weighing machine,' and we always keep that in mind as we navigate times like these." - Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management

"The number was a strong beat. This clearly sets the Fed up very well to continue to bring their target rate higher to address inflation. Our view remains that the Fed needs to continue to bring rates higher. This is an interesting situation for fixed income investors, as the reality is that the direction of rates is clearly higher both at the front end and likely further out the yield curve as well. That will create significant volatility for longer duration assets. Given a higher rate environment, we continue to focus attention on shorter-duration assets. Credit spreads are actually wider recently, and so we like the risk-return there. You have less sensitivity to rising rates, higher yields, and corporate credit fundamentals remain intact." - Larry Holzenthaler, Senior Portfolio Manager at Catalyst Funds

"There is nothing here to suggest that the labor market is anything other than tight. Many manufacturing companies continue to report that workers are hard to find, and those they have they are keen to retain. Unfortunately for those workers, this is still not translating into higher wages and salaries. While we may be starting to see some modest strength in this report, for example, and in the latest Atlanta Fed wage tracker, as well as a small increase in the quit rate, on the whole wage gains remain well contained. It is possible that some of this restraint is less due to AI replacing workers, but more to the threat of AI in the future — workers may be reticent to push for higher wages if they feel it may increase their chances of redundancy when/if AI really starts to threaten their roles. The mix of employment gains was encouraging. It shows that while the capex boom is clearly drawing more workers back into the manufacturing sector, other non-AI related sectors are also showing broad strength. With the unemployment rate now just below the Fed's longer-run median estimate of unemployment, employment is not a hurdle that would prevent it from raising rates again in December, allowing it to focus more on the inflation side of the dual mandate." - Richard de Chazal, Economist at William Blair

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When a loved one begins showing early signs of memory loss or cognitive decline — such as repeating questions, missing bill payments, or getting confused about appointments — most families' primary concern is medical care. That instinct isn't wrong, but it's incomplete.

Some of the most important decisions a family will make in the months that follow the symptoms or diagnosis of cognitive decline or dementia are financial, not medical, and the window to make them correctly and thoroughly tends to be shorter than people expect.

We've developed five basic steps that you can take — as part of a process starting at home and eventually involving your financial advisers — to ensure your loved one will be financially supported and that their intentions are known and carried out.

None of these steps can predict what the future holds, but taken together, they can create a comprehensive, flexible framework to help families make the hardest decisions with greater confidence.

I'm not just speculating — I've witnessed this as a professional who walked beside families who find themselves at this critical juncture.

Step No. 1: Compile information and write a plan

A physical and cognitive evaluation is an important first step, but so is understanding the full financial picture: Cash flow, insurance coverage, legal documents, the living situation and who is available to help.

This is also the moment to build a care team — close family or friends, a physician, a financial adviser and an attorney — so when decisions need to be made, the right people are in the room.

Gathering the information for a full financial picture and a care team might feel frightening or overwhelming, but uncertainty is almost always more expensive than clarity.

Step No. 2: Clarify your goals

What does "independence" mean to your loved one? Is staying in their own home the priority, or is proximity to family, social connection or freedom from home maintenance more important?

These are deeply personal questions, and the answers should come from early conversations, not assumptions made under pressure later.

It's also worth pressure-testing the financial assumptions behind those preferences — aging in place isn't automatically the cheaper option once home modifications, caregiving labor and ongoing support are factored into the plan.

Step No. 3: Make documentation current and bring in financial professionals

Conversations establish wishes. Documentation ensures those wishes are carried out.

Review healthcare and financial powers of attorney, advance directives, beneficiary designations and account records with your loved one and with their adviser or other financial professionals and confirm they're up to date.

Waiting too long to put these documents in place is one of the most common — and most avoidable — mistakes families make, because a loved one might know exactly what they want and still be unable to act on it without the proper legal authority.

Bringing a registered investment adviser (RIA) into the conversation and process early, alongside other credentialed professionals such as Certified Financial Planners (CFPs), certified public accountants (CPAs), and estate attorneys, helps ensure nothing falls through the cracks.

Step No. 4: Prepare to provide support

Once your loved one's priorities are known and documented, the next step is to tend to the practical realities of providing support.

On the safety side, that can mean home modifications, transportation alternatives, meal delivery or companion care — small, often lower-cost measures that meaningfully reduce the risk of a fall, a missed medication or financial exploitation.

On the financial side, it means understanding that healthcare coverage and long-term care are not the same thing. Medicare might cover medically necessary services, but the custodial, day-to-day care many people suffering from dementia eventually need — help with bathing, dressing, preparing and eating meals and medication reminders — generally falls outside that coverage and is usually paid out of pocket.

Reviewing costs, insurance benefits, and personal resources before this type of care becomes urgent avoids a painful surprise later.

Step No. 5: Revisit the plan frequently and adapt as needed

Even the most thoughtfully constructed and thorough financial plan isn't permanent. Health changes, family relationships and dynamics change, and a home or arrangement that works well today might not work in five or 10 years.

Planning ahead doesn't mean committing to one path for good — in many ways, it means the opposite: revisiting the plan periodically and ensuring decisions remain aligned with a loved one's intentions as circumstances evolve.

Start the conversation before a crisis

Every family, diagnosis and financial picture is different, which is why these conversations shouldn't be delayed until they become urgent.

Families who navigate planning for loved ones experiencing cognitive decline with the least stress are usually the ones who started talking — with one another and with trusted medical, legal and financial professionals — while they still had the luxury of time.

Sometimes the best place to begin is also the simplest: In your home with the family members and friends who care most. Expand the conversation to the financial professionals who have the best interests of your loved one, and your family, at heart.

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

For many individuals and families, purchasing life insurance can be an effective way to provide financial security for loved ones.

However, buying the policy is only part of the planning process. An equally important question is, "Who should own the policy?"

While many people own life insurance personally, high-net-worth families may also consider using an irrevocable life insurance trust (ILIT) to own and manage life insurance.

When structured properly, a life insurance trust can provide significant estate planning, asset protection and wealth transfer benefits.

What is a life insurance trust?

A life insurance trust is a legal entity created to own a life insurance policy on the insured's life. Rather than owning the policy personally, the trust becomes the owner and beneficiary of the policy.

Upon the insured's death, the life insurance proceeds are paid into the trust, and the trustee distributes or manages those assets according to the instructions contained in the trust document.

The estate tax advantage

One of the primary reasons affluent families use life insurance trusts is estate tax planning.

When an individual owns a life insurance policy personally, the death benefit is generally included in that person's taxable estate. For larger estates, this can increase federal and state estate tax exposure.

If an ILIT owns the policy, the death benefit may be excluded from the insured's taxable estate, potentially preserving a greater portion of the proceeds for heirs.

This can be especially valuable when life insurance death benefits reach several million dollars.

Example: Consider an insured with a $20 million estate that includes ownership of a $5 million life insurance policy. Under current estate tax law ($15 million exclusion in 2026), an estate tax may be assessed at death.

If, however, an ILIT owns the policy, the death benefit may be excluded from the estate, potentially reducing estate taxes and increasing the amount the beneficiaries ultimately receive.

Maintaining control over the distribution of assets

Many parents worry about leaving a large lump-sum inheritance directly to children.

A life insurance trust allows the grantor to establish rules regarding when beneficiaries receive funds, how funds may be used, whether distributions are made outright or in stages, protection against spendthrift behavior and long-term management for future generations.

For example, a trust may provide one third of assets at age 30, one third at age 35 and the remainder at age 40. Alternatively, the trustee may retain discretion to distribute funds for health, education, maintenance and support.

Protecting beneficiaries

Depending on applicable law, life insurance trusts can help protect inherited assets from various risks, including creditor claims from:

• Lawsuits
• Divorce settlements
• Financial mismanagement

Rather than distributing a large inheritance outright, trust assets can remain under the supervision of a trustee who manages distributions according to the trust's terms.

For families concerned about preserving wealth across generations, this protection can be invaluable.

Providing liquidity when it's needed most

Even when estate taxes aren't a concern, many estates face liquidity challenges.

Assets such as real estate, businesses, investment partnerships and family vacation properties may be valuable but difficult to sell quickly.

Life insurance proceeds held in a trust can help provide liquidity to help pay estate settlement costs, cover taxes, equalize inheritances among children, preserve a family business and prevent the forced sale of family assets.

Planning for blended families

Life insurance trusts can also serve an important role in blended family situations.

For example, an individual may want to:

• Provide income for a current spouse
• Preserve assets for children from a prior marriage

A trust can establish clear instructions regarding how and when proceeds are distributed, reducing the potential for disputes and helping to ensure the insured's wishes are carried out.

Important considerations

While life insurance trusts offer significant benefits, they aren't appropriate for everyone.

Some considerations include:

Irrevocability. An ILIT is intended to be irrevocable. The policy owner gives up direct ownership and control of the policy.

Administrative requirements. Trusts require ongoing administration, including trustee oversight, annual notices to beneficiaries (commonly known as Crummey notices) and proper documentation and recordkeeping.

Professional guidance. Because trust design, tax rules and estate planning objectives can be complex, it is important to work with qualified legal, tax, and financial professionals when evaluating whether an ILIT makes sense.

The bottom line

Purchasing life insurance is an important step in protecting your family's future. However, for many individuals, especially those with significant assets, the ownership structure of the policy can be just as important as the policy itself.

A properly designed life insurance trust may help:

• Reduce estate taxes
• Protect beneficiaries
• Control distributions
• Preserve family wealth
• Provide liquidity at death
• Support multigenerational planning goals

For families seeking to maximize the impact of their life insurance strategy, a life insurance trust can be a powerful planning solution that extends well beyond the death benefit itself.

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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.

Healthcare stocks are flying. Over the past 12 months, the sector has gained 23%, outpacing the 15.7% return in the S&P 500 Index.

It's about time. Until last year, the sector had been in a prolonged slump. The biotech bubble that followed the COVID vaccine launch burst in 2021, setting off a four-year "biotech winter," says Finny Kuruvilla, co-chief investment officer at Eventide Asset Management.

An epic rise in interest rates in 2022 didn't help (biotech firms are big borrowers). The S&P Biotechnology Select Industry Index sank a cumulative 63% from its peak in early 2021 to a low in 2025.

Meanwhile, uncertainty about drug pricing weighed on pharmaceutical shares. And problems that arose after the pandemic hindered many healthcare product makers (supply gluts) and insurers (spikes in demand for care). Between early 2022 and mid-2025, the S&P 1500 Health Care Index returned a scant 1.0%, cumulative. The broad U.S. stock market, by contrast, gained 43%.

But the industry has moved beyond those troubles, and today, a wave of innovation, a string of mergers and acquisitions, and an improved outlook for the sector's earnings growth are coalescing to push healthcare shares higher.

The sector is broad, however. Some industries stand to benefit more than others from these trends — namely biotech and adjacent businesses, including select pharmaceuticals and life science tools companies, which provide the instruments biotech firms need to develop new drugs.

"Biotech is in a strong position," says Sal Rais, manager of the T. Rowe Price Health Care exchange-traded fund.

Growth drivers for healthcare stocks

Over the years, genetic and scientific discoveries have led to slew of new techniques to treat diseases, and biotechnology is the engine behind it all. "The toolbox to develop drugs is getting broader," says Rais. "We're able to make targeted, more effective, safer drugs faster than we've ever been able to do."

In 2026, the efficacy of two new drugs — one recently approved, the other in late-stage trials — has electrified the industry. And the way the drugs work is the stuff of science fiction.

A recently approved pancreatic cancer pill, Rasonque, for instance, more than doubles the overall survival period, to 13.2 months, compared with those undergoing chemotherapy, the standard of care. "That's astonishing data," says Eventide's Kuruvilla. The tablet, by Revolution Medicines (RVMD), targets the specific proteins that fuel tumor growth and essentially shuts them off, slowing cancer growth.

Recent results from Moderna (MRNA) and Merck (MRK) for a new skin cancer protocol also rocked the biotech world. The Moderna shot is custom-made using a patient's own tumor tissue, and it trains his or her immune system to recognize and fight cancer cells; it's administered alongside Merck's Keytruda immunotherapy treatment.

In early trials, those getting the two-fisted treatment had a 49% lower chance of recurrence or death than patients taking only Keytruda.

A step-up in the pace of mergers-and-acquisitions deals is also propping up stocks in the sector. Drugmakers are set to experience "their biggest patent cliff ever," says Rais, starting in 2028 and lasting through 2032.

When a pharmaceutical firm loses exclusive rights to make a drug, revenues fall dramatically because other companies can make generic versions of it. "The need for big drug companies to feed their pipelines is the greatest it has ever been, so they're acquiring biotech companies," says Rais.

Drug companies made 26 deals in 2025; in 2026, the count topped 50 biotech acquisitions by midyear. Eli Lilly (LLY), for example, has been on a spree this year, acquiring more businesses in the first half of 2026 than in all of last year.

Lilly chief executive David Ricks told financial network CNBC that "not all of these bets will pay off." But the ones that do will help the company grow well into the 2030s.

Finally, though some industry insiders are wary, China has become a "phenomenal superpower" in drug development, says Eventide's Kuruvilla, and it is now a source for deals, too.

Armed with impressive clinical trial data, Chinese biotech firms have been reaching out to U.S. and European companies to build partnerships. For example, in 2024, U.S. biotech firm Kailera Therapeutics licensed the rights outside of Greater China to develop, make and market a promising weight-loss drug from Jiangsu Hengrui Pharmaceuticals. The U.S. firm then leveraged that asset to raise $625 million in a public offering in April 2026.

Driven by the fastest-growing healthcare industries, the outlook for the broad sector's earnings is on the upswing. Analysts currently project the healthcare sector to post 21.9% year-over-year earnings growth in 2027, says Matthew Bartolini, State Street Investment Management global head of research strategists, a pace that beats every sector but technology. "And those numbers have been revised upward recently," he adds.

The biotech industry is on an even faster track — analysts expect 47.7% growth in earnings in 2027. By contrast, predictions for the S&P 500 are more modest, at 15.1%. "Overall, the opportunity set in healthcare is pretty amazing," says T. Rowe Price's Rais.

Of course, rising interest rates could squeeze those earnings-growth projections. But State Street's Bartolini says a strong economy and continued upward revisions for earnings growth in the healthcare sector could "counterbalance" the increased cost of debt that higher rates bring.

Firms that "got burned" in the last rate-hike environment may now hold enough cash on hand for three to five years, instead of just six months, says Kuruvilla. Plus, adds Rais, drug innovation will continue apace.

How to invest in healthcare stocks

If you're thinking of jumping into the biotech industry, bear in mind that it is subject to boom-and-bust cycles that typically last four to five years, and the peaks and troughs can be extreme. You should size your stake appropriately.

The good news is that it's early days since the last trough. That said, "to be successful as a healthcare investor, you need to have a lot of patience and a long-term view," says Rais. It can take more than a decade to develop new drugs — though artificial intelligence could cut that timeline in half — and about 90% of therapies under development fail to come to market, according to a Morgan Stanley report.

To help you cash in, we've identified six funds that focus on biotech and related businesses. All data and returns are through September 30, unless otherwise noted.

A good way to take baby steps into biotech is through an index-based ETF. You could start with the State Street SPDR S&P Biotech ETF (XBI). The ETF tracks the S&P Biotechnology Select Industry Index and holds 147 biotech stocks in mostly small (75% of the ETF’s assets) and midsize (17% of assets) firms.

That's good, because most of the groundbreaking innovation is happening among the smaller biotech firms; they are also primary acquisition targets. XBI's 12-month return is an eye-popping 58%.

The Virtus Biotech ETF (BBP) tracks an index of 65 equally weighted, mostly small and midsize biotech firms that have at least one drug therapy approved by the FDA.

Moderna, Iovance Biotherapeutics (IOVA) and Omeros (OMER) were top holdings at last report. The ETF has held up better than peers in down markets, and its 10-year annualized return, 12.2%, beats the S&P Biotechnology Select Industry Index by an average of nearly three percentage points per year.

We like actively managed biotech funds, too, because a manager's know-how can be vital to picking more winners than losers. Rajiv Kaul, manager of the Fidelity Select Biotechnology Portfolio (FBIOX), has been at the helm for nearly 21 years, so he has lived through at least four biotech cycles. Over the past five, 10, 15 and 20 years, the fund has outpaced the S&P Biotechnology Select Industry Index.

More than half of the fund sits in small-company stocks; evenly split doses of midsize and large-cap stocks make up the rest of the portfolio. AbbVie (ABBV), Krystal Biotech (KRYS) and Amgen (AMGN) were top holdings, at last report.

A broader approach to the healthcare sector

Each of the three active health funds that we highlight below emphasize biotech, though they invest in other health industries, too. Their returns are not as robust as that of pure-play biotech funds, but their volatility has been more down to earth.

The T. Rowe Price Health ETF (TMED) only launched in June 2025, but is off to a promising start. The fund has gained 27.9% over the past 12 months. Manager Rais, who has business and medical degrees, runs the fund with nine analysts. Though the portfolio tilts heavily toward biotech (37%) and life science tools (19%), the fund stretches across the sector.

"It's a very science-due-diligence approach," says Rais. "Is there a differentiated drug here? That's the guiding principle."

Alnylam Pharmaceuticals' (ALNY) drug for a deadly condition called cardiac TTR, for instance, stops the production of the toxic protein that causes the disease and significantly reduces the risk of death.

"If you can prove that a drug reduces the likelihood that you're going to die, that's the most powerful result you can have," says Rais.

At Eventide Healthcare & Life Sciences (ETNHX), biotech and pharmaceuticals firms make up 79% of assets. Another 9% is devoted to equipment — the tools, implements and machines used to make or develop drugs — and diagnostics; then comes a 6.3% stake in medical tech companies, which make smart devices such as diabetes insulin pumps.

The fund holds 62 stocks, most with small to midsize market capitalizations. Contributors to the fund's 34.4% return over the past 12 months include Guardant Health (GH), up 185%, and Revolution Medicines, maker of that pancreatic cancer breakthrough drug (up 340%).

Even before the fundamental research begins at this fund, only firms that pass certain standards for doing good — environmentally and socially, among other things — are considered.

"We embrace companies that we can be proud of that are promoting human flourishing," says Kuruvilla, who practiced medicine before joining the investment world. Eventide Asset Management allocates 1% of the aggregate assets it manages to socially impactful investments. "It's the right thing to do," says Kuruvilla.

Fidelity Select Health Care Portfolio (FSPHX) is a member of the Kiplinger 25, the list of our favorite actively managed, no-load funds. Over the past 12 months, the fund has gained 31.6%. Oruka Therapeutics (ORKA), up 333% over the past 12 months, and Merck, up 77%, are two of the outperformers in the portfolio.

Manager Eddie Yoon invests across the sector in companies of all sizes, blending high-quality firms that have stable earnings with innovative firms that are disrupting the marketplace. More than half of holdings are small or midsize.

Yoon has favored biotech since 2025. "The fundamentals are good, and there's great clinical data coming out," he says. He also likes life science tools. "The big AI companies talk about healthcare and drug discovery and bringing technology into that space. You're going to see that pick up in 2027 and 2028, and that will benefit the tools industry."

Yoon is "cautiously optimistic" about the turnaround in healthcare. "I don't want to call a victory too soon because it has been so tough over a long period of time. But I do think the fundamentals are getting better."

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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Stocks soared Wednesday after Tuesday's midterm elections offered little room for challenge on integrity grounds and left no question about control of Congress for the next two years. Indeed, President Donald Trump has said he will accept the results and work with Democrats over the balance of his term.

"We'll, you know, look forward to working with them," he said in an interview with The New York Times. "We'll probably work something out." At almost the same time, Trump posted an image of a MAGA-red "VETO" hat on Truth Social.

Note that Trump Media & Technology Group (DJT) was down 24.5% to close at $4.49 on Wednesday. The communication services stock has been in a steady slide since hitting an all-time high of $79.38 on March 26, 2024.

The front-month West Texas Intermediate crude oil futures contract was down 7.7% to $88.67 per barrel, as investors, traders and speculators priced in potential post-midterm changes in U.S. foreign policy.

Treasury yields were lower across the maturity spectrum, including the 2-year (-3.5 basis points, 4.579%), the 10-year (-6.2 bps, 4.888%) and the 30-year (-4.7 bps, 5.277%).

The tech-heavy Nasdaq Composite surged 1.4% to 25,736, the broad-based S&P 500 climbed 1.6% to 7,688, the small-cap Russell 2000 jumped 1.6% to 2,856, and the blue-chip Dow Jones Industrial Average was up 3% to 53,356 for its biggest post-midterm election rally since 1982.

Data centers and energy stocks lose

"Democrats won the Senate and the House, and governors favoring data center pauses won in a number of states, including Texas," observes Keith Parker, head of U.S. and global macro strategy at UBS. As Parker explains, exit polls show most voters oppose new data centers in their communities.

Price action for cloud computing platform CoreWeave (CRWV, -9.9%), data center operator Applied Digital (APLD, -6.7%) and Elon Musk's SpaceX (SPCX, -3.8%) reflected this rising electoral opposition.

"The blue wave will have implications for equities," the strategist writes, "with the biggest impact likely coming from an increase in data center regulation at the state level near-term."

At the same time, nine of 11 sectors, including tech stocks, consumer discretionary stocks and consumer staples, were up on Wednesday. But energy stocks were down 4.8%, and industrials shed 1.1% as a group.

Only Nvidia (NVDA, -3.2%), Chevron (CVX, -3.7%) and Caterpillar (CAT, -5.2%) among the 30 Dow Jones stocks closed in the red.

3M (MMM, +9.6%) was Papa Dow's top performer, though industrial stocks were generally lower on Wednesday. Sherwin-Williams (SHW, +6.6%) made another big move, as materials stocks did their part to paint it green.

Alphabet (GOOGL, +3.2%), Amazon (AMZN, +6.1%), Apple (AAPL, +5.3%) and Microsoft (MSFT, +6.7%) put up solid gains, too, as most of the Magnificent 7 stocks enjoyed fresh bids.

The chips are down

Advanced Micro Devices (AMD, +1.0%) stood out among semiconductor stocks after management beat Wall Street expectations with its third-quarter results and its fourth-quarter guidance on strong demand from data centers for its enterprise CPUs and its AI accelerators.

The chipmaker was up even as Nvidia and the VanEck Semiconductor ETF (SMH, -2.8%) were well down by the closing bell on this post-midterm Wednesday.

We'll hear from the leader of the AI revolution and CEO Jensen Huang when Nvidia reports fiscal 2027 third-quarter results after the closing bell on Tuesday, November 17.

What to do in November

You know what midterm elections mean for your portfolio. But the midterms are over now. And stock market seasonality says it's a particularly good time to be invested.

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.

Have some cash to deploy? Kiplinger contributor Kyle Woodley has some ideas about what you can do with it right now. And he avoids much mention of politics, other than to dismiss it.

"Don't worry," Kyle writes. "I'm on your side." Indeed, his look at some of the best investing options for November excludes factors such as Tuesday's midterms and Black Friday on November 27.

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When wealth transfer is discussed, people often focus (perhaps understandably) on the numbers: How much of our family's wealth will pass from this generation to the next? How should we divide those assets?

But that focus obscures how complicated and personal the transfer process can be. The process involves discussions about sickness and death, and about how equipped your children are to receive assets or take on responsibilities.

It means confronting questions many would rather put off:

• Who gets the vacation house?
• Who will take over the family business?
• Who will care for you when you cannot?

But procrastination carries financial and emotional costs.

According to a recent Bank of America survey, only 36% of ultra-high-net-worth respondents believe their heirs are very prepared to handle an inheritance, and 40% have experienced or expect family tension around inheritance.

These challenges aren't limited to the ultra-wealthy, as the results of the recent Kiplinger-Morning Consult survey show. Whatever the numbers, all families will benefit from starting preparations sooner rather than later.

A successful wealth transfer is an ongoing and complex process that requires more than moving assets from one generation to another. Knowledge, values and responsibilities are also being passed down. Yet I see far too many families focusing solely on the financial handoff.

Information must be passed down, too

The first step in any generational transfer is passing on information, and too many donors keep their heirs in the dark without realizing it. Unless you've explained how the family's financial life is managed today, your children may not know how to step in tomorrow.

Take a moment and consider who in your family knows:

• Where important financial and estate documents are kept (hint: don't put them in a safety deposit box no one can access but you)
• Which institutions hold the family's bank, investment and retirement accounts
• How to contact the family's accountant, attorney or financial adviser
• What bills and other recurring financial obligations need to be handled
• Who has authority to manage finances if a parent becomes incapacitated
• Who will coordinate caregiving, if needed

If circumstances permit, it's best to walk your heirs through at least some of this while you have the opportunity. Whatever discomfort that may create will pale in comparison to them having to perform forensics on your life in the middle of a health crisis or while grieving.

Prepare heirs before the transition

A perfectly documented estate plan doesn't prepare your heirs to step into the roles they may inherit. They need opportunities to understand the responsibilities before they're expected to assume them.

This can start with small steps:

• Tell heirs where your important documents are stored
• Introduce heirs to advisers and consider letting them sit in on meetings
• Show them how you expect your estate plan to flow — with or without numbers
• Educate your family about finances, trusts and other foundational concepts
• Explain why family finances are structured the way they are

You might eventually consider involving them in consequential conversations and decisions.

This gives heirs an opportunity to gain experience in the roles they may eventually assume. Importantly, it creates an opening to explain why you have made certain choices.

If there is a family business, consider explaining the values that shaped how the company was built and operated. If there is a vacation property you want to remain in the family, talk about why that matters to you and find out whether your heirs share that goal.

Those conversations can reveal misaligned expectations and goals early, when there is still time to adjust the plan rather than leaving the next generation to sort it out later.

The important part is beginning while the transitioning generation can still teach, listen and adjust.

Every family has a handoff to plan for

Succession issues are something everyone should consider, even if you're not handing off an operating company or a nine-figure estate. Of course, those families have lots of decision points, but all families must decide who will manage household finances, coordinate care and communicate with financial or healthcare professionals when parents are no longer able.

More time means more choices

No matter what or how much is being transferred, the best advice for every family is to start thinking about these issues early.

Unspoken assumptions are the root of many succession problems. Your children may have different expectations about who should take care of their parents or how much money they will receive. You may assume you know which child should handle the investments or business, only to be surprised that child has little interest in the responsibility.

These unmanaged expectations can lead to tension if the plans aren't discussed in advance.

Families who start early will have more time to communicate what's needed, to consider what structures best reflect their intentions and to decide who should take on which responsibilities.

That doesn't mean you have to give every detail about your financial picture or your estate plan (which may change over time). But by equipping your family with the tools they need to step into the roles you intend them to assume, you will also give them the confidence to handle those responsibilities.

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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.

Every amateur golfer knows the moment. The ball keeps finding the trees, and somewhere on the back nine, a thought creeps in: Maybe I need new clubs.

You buy the latest driver and walk to the tee convinced this round will be different. It usually isn't. The clubs were never the problem. The swing was.

Artificial intelligence is the shiny new club of personal finance, and it's genuinely impressive. Ask it to model a Roth conversion or compare two funds and you get an answer in seconds that once took an analyst an afternoon.

I'm not here to talk anyone out of using it. I use technology every day, and the math these tools do is remarkable.

But a tool only answers the question you ask, and in financial planning, knowing what to ask is the entire game. If you don't know what to ask for, you get an answer that looks confident and complete while leaving the most important decisions untouched.

These tools also sometimes fabricate answers outright, a failure the industry politely calls a hallucination.

It's not the answer, it's the question

Type "What should I invest in?" into any AI tool, and it will hand you a portfolio. What it won't ask first is the part that determines whether you keep what you make.

• Where should that investment live: a taxable account, a Roth, a trust, an entity?
• Should the business you built be held personally, in an S Corp, or in a structure that shields it from a lawsuit that hasn't happened yet?
• When you buy the next property, do you use your own capital or borrow, and what does that choice do to your taxes, liquidity and estate a decade from now?

Those aren't math questions, they're strategy questions, and the right answer depends on how you earn, what you own, who depends on you and where you're trying to go. A surgeon midway through her peak earning years, a business owner planning an exit and an executive holding concentrated stock can all type the same prompt and get the same answer.

In my 30-plus years working with clients in these situations, all three would be poorly served by AI, because the answer never accounted for the three different lives behind the question.

That's the worry that keeps successful people up at night. Not "Can I find a good investment?" but the quieter one: "Am I doing the right things with what I've built, or just the familiar things that sound smart?" A tool that only responds when spoken to can't reach that worry, because it doesn't know what you forgot to ask.

Club vs swing

The clubs are the tools. The swing is the strategy. We live in a culture obsessed with clubs. The hot stock tip is a club. The new app is a club. AI is the most impressive club anyone has handed us yet.

After three decades I would still rather have a professional's swing and an old set of clubs than a new bag and no idea how to use it. The best players in the world don't win on equipment; they win on the swing and the team reading the course beside them.

AI gives you better clubs. It does not give you a better swing. The swing is knowing which club to pull, when to lay up and how one shot sets up the next. In planning terms, the swing is coordination: how your tax strategy talks to your investments, how those investments talk to your legal structures, how your estate documents talk to your insurance and how all of it moves toward the life you want. No tool coordinates that, because coordination isn't a calculation. It's judgment.

You don't need to become the expert

You don't have to master AI, tax law, entity structuring and estate planning to win from here. You need a guide who already understands how the pieces fit and a bench to call on when your situation demands it.

Consider how quickly real planning stops being a math problem. The same investment in the wrong account can quietly cost you for decades. Tax strategy can't be an April event; it's a year-round design touching every other decision.

Legal structures determine how you own your business and real estate and how exposed you are when something goes wrong. Estate documents matter even without a taxable estate. Insurance, from disability to long-term care to liability, keeps one bad event from unwinding a lifetime of good decisions.

Then there's the question AI rarely raises on its own: when do you borrow, and when do you use your own capital? That one decision runs straight through taxes, investments, liquidity and estate. Answer it in isolation, and you can win the transaction and lose the plan.

Watch for shiny club syndrome

The most expensive mistakes at this level are the quiet ones. The asset owned in the wrong place. The entity never set up. The coverage never bought. The borrowing decision made in isolation. Nothing appears to go wrong in any single year, which is why it's easy to keep coasting, and the cost shows up later in taxes you didn't have to pay and protection you didn't have when you needed it.

If AI has you asking better questions about your money, that's progress. Do one thing this week: Pick the largest asset you own and ask why you own it the way you do. If the answer is "That's just how it ended up," you've found a conversation worth having.

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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 were mixed on the first Tuesday of November, though names related to the artificial intelligence trade lifted the Nasdaq Composite and the S&P 500 into the green. Crude oil was flat, but bond yields were up, as voters across the U.S. headed to polling stations for midterm elections.

By the closing bell, the tech-heavy Nasdaq Composite had risen 0.8% to 25,372, and the broad-based S&P 500 was up 0.4% at 7,568. But the blue-chip Dow Jones Industrial Average had slipped 0.4% to 51,786.

The front-month West Texas Intermediate crude oil futures contract was up 0.1% to $96.56 per barrel, amid continuing diplomatic efforts to end the war in the Middle East. Treasury yields were higher across the maturity spectrum, including the 2-year (+0.4 basis points, 4.623%), the 10-year (+6.4 bps, 4.958%) and the 30-year (+6.2 bps, 5.331%).

Nvidia (NVDA, +2.3%) was among the top two Dow Jones stocks as investors, traders and speculators saw value amid an AI boom, as opposed to traps in an AI bust, particularly with regard to chipmakers. Indeed, the VanEck Semiconductor ETF (SMH, +2.0%) ended a three-session losing streak.

Fellow Magnificent 7 stock Microsoft (MSFT, +2.7%) set the pace for Papa Dow, while Sherwin-Williams (SHW, -3.3%) was the 30-stock index's biggest loser a day after the materials stock was its biggest winner.

Nvidia surged ahead of Apple (AAPL, -1.9%) in the global market cap leadership standings after the iPhone maker slid on concerns about slowing growth and shrinking margins in its core services business.

Earnings and opportunities

Palantir Technologies (PLTR, -1.7%) was lower, too, in the aftermath of its third-quarter earnings report, as analysts focused on slowing total commercial contract value growth for the AI-powered software stock.

Both AAPL and PLTR "are great near-term buys," according to Louis Navellier of Navellier & Associates.

Apple's free cash flow rose by $136 billion, giving it plenty to spend on AI and acquisitions, while Palantir's commercial revenue rose 148%, making it less dependent on government contracts.

Navellier also notes market anticipation for results from Advanced Micro Devices (AMD, +3.7%) and Super Micro Computer (SMCI, +3.1%), which are reporting after the closing bell.

AMD and SMCI were among multiple semiconductor stocks posting solid gains, as tech stocks led the way higher today.

Why Eaton is one of the best stocks to buy

Eaton (ETN, +7.0%), meanwhile, demonstrated why it's one of the best stocks to buy now with another expectations-beating quarter and guidance for more growth.

As Kiplinger's Anne Kates-Smith notes, demand has never been higher for the mission-critical components Eaton makes for use in data centers, as well as by utilities and other customers to manage electric power production and other complex systems.

Management of the industrial stock reported earnings growth of 20% to $3.68 per share on revenue growth of 28% to $8.9 billion. Wall Street forecast EPS of $3.54 on sales of $8.5 billion.

Eaton estimates fourth-quarter EPS of $4.10 on organic revenue growth of 13% to 15%. Analysts expect earnings of $4.09 per share and organic growth of 11%.

In a press release announcing results, CEO Pablo Ruiz (PDF) highlighted segment margins above the high end of guidance and continued momentum across Eaton's electrical businesses.

"Record orders grew sequentially, backlog continued to expand, and we remain well-positioned to help customers deliver on their critical power infrastructure investments," Ruiz said.

What the midterms mean for your stock portfolio

"Positioning your portfolio with the outcome of electoral politics in mind is a bad idea," Kiplinger's Dan Burrows writes at the very top of his article on what midterm elections mean for your portfolio.

If you plan to mess with your portfolio based on Tuesday's results, "you might want to think again." To begin with, forecasts about sectors and stocks that could outperform or underperform following elections "are too often wrong."

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.

At the same time, we're right at the beginning of one of the best seasonal periods for the stocks. And the S&P 500 has risen during the 12 months following midterm elections 18 straight times since 1954. So why not sit tight.

Bottom line, whether Republicans or Democrats control Congress, sticking to a long-term plan maintaining a well-diversified portfolio is all you really need to do right now.

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In the many years that I have written this column, not once — until a few days before Halloween this year — was I left worried that callers would go off the deep end and do something violent to a business they felt had wronged them.

It all began with a voicemail from "Rick," asking whether I took cases of an auto dealer's negligence without personal injury or property damage.

Now, let's think about that statement. No injury. No property damage. Someone might have been negligent, but no harm resulted.

So what basis does Rick, or anyone else in this position, have for a lawsuit?

I ran that question by a friend and colleague who has practiced plaintiff's personal injury law for decades: Los Angeles-based Judy Gelfand, who comes from a remarkable family of physicians and lawyers. Her brother Gary is regarded as one of the nation's most respected medical malpractice attorneys and has been a great resource for this column. This article contains just some of his excellent advice.

Judy's answer was what every law student learns in the torts class we all take: "Negligence law is based on actual, recognized injury, loss or property damage caused by someone failing to do what they should have done. Just because something could or might have happened, but didn't, is not the basis for a lawsuit. When a mistake occurs but is immediately rectified with no harm, that's it."

Threatening phone calls

I called Rick and asked him to tell me what had happened.

"My truck's control arm needed to be replaced," he said. "I know the procedures required. They did the work under warranty. We drove over to pick it up, and, as my wife began to drive it, within a hundred feet or so, a wheel fell off. No one was hurt and they repaired the cosmetic damage, but she could have been killed!

"When I call lawyers, they all say if she is unharmed and the damage was repaired, there is no basis for a lawsuit, but I do not believe them. Since you are a consumer advocate I want you to represent us."

"Rick," I replied, "If damage to the vehicle was repaired, and the wheel came off within feet of the vehicle moving, you should thank the Lord that your wife was unharmed. There is no case."

At that moment, he began screaming: "But if this happened in traffic or on the freeway it would have been horrible — she could have been killed! I want them sued!"

He mumbled threatening language and hung up. I had immediate concerns about a seemingly out-of-control guy walking into the dealership with violence on his mind. Even if he thought that an attorney-client relationship had been established — which it had not — I still had a legal and moral obligation to warn the dealership, which I did.

Later that day, Rick's wife called, screaming at me in language that can't be repeated here, promising to "tell the media how incompetent and stupid you are."

She hung up, and I called her back, getting voicemail. I calmly explained that with no harm, there is no case, and she would be welcome to call and discuss this at any time.

Rick's not-so-hidden agenda?

Later, I learned that Rick hadn't told me the full story. The dealership's general manager filled me in, saying Rick had asked for an appraisal of the vehicle's resale value, which was roughly $17,000. He owed close to $25,000 on it, so he had negative equity.

The dealership's mechanics had accomplished the repair without having to take the wheel off. And in any case, they didn't have the wheel locks they'd have needed to remove its lug nuts.

The manager then described what happened when the couple left: "We have video coverage of the entire thing. She backs up, and — we do not know how — but the lug nuts came off. The wheel did collapse inward, but did not come off. We immediately took action, fixed it, cleaned it up — everything we could do.

"I attempted to speak logic to him, and offered to take him out of that vehicle completely, with no negative equity… He would not even listen but screamed, 'Unless you give me every payment back, my down payment and the negative equity, I'm going to an attorney.'

"I said: 'We fixed everything. Nothing happened to your wife. We understand there could have been a major catastrophe, but it didn't [occur] and fortunately it happened when she was driving one mile an hour on our lot.' He left the dealership screaming."

Was this attempted extortion?

I had my veteran private investigator, Riley Parker, look into Rick's public financial life, discovering that he has just been sued by a New York collection bureau that buys debtor judgments.

"It has the ring of a scam from someone who needs money and will do whatever it takes to get it," Riley said. We both wondered if Rick set this thing up, loosening the lug nuts before bringing the truck in for repairs.

Visit your house of worship, thank the Lord

My colleague, Judy, offers this story, told to her by Leo, her father, who was both an attorney and physician:

"A woman received a phone call from her GP recommending that she immediately see her as something suspicious was just found in a mammogram. Later that day they called her back, advising that the wrong patient's results were read to her and she has nothing to worry about. She wanted to sue her doctor for scaring her that she had cancer.

"Leo told her: 'Please go to your preferred house of worship, thank the Lord, and make a donation. Just be grateful for what did not actually happen."

Dennis Beaver practices law in Bakersfield and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or emailed to Lagombeaver1@gmail.com. And be sure to visit www.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.

I tell every client to remember one thing about Washington: Whatever Congress names a new law, expect it to do the opposite.

The SECURE Act is a perfect example. For most families, it secured very little. Starting January 1, 2020, it ended the "stretch IRA," which let heirs spread withdrawals over their lifetimes, and replaced it with a 10-year deadline.

Consider Lisa, a hypothetical heir who inherits a $500,000 traditional IRA from her father at 55. She and her husband earn $200,000 a year, and she doesn't need the money, so her plan is to leave it alone and let it grow. It feels prudent. It could hand the IRS about a third of her inheritance.

Lisa's instinct is the one I see most often, and it's one of five mistakes that quietly shrink inheritances. Each has a fix, and most fixes come down to decisions made in the first year.

1. Assuming you can ignore the account until year 10

Lisa's first question should be whether waiting is even allowed. As an adult child, she falls under the 10-year rule. (Spouses and a few other heirs get more flexible options.) Her account must be empty by December 31 of the 10th year after her father's death.

Whether she also owes a withdrawal every year depends on her father's age at death. If he died before his required beginning date for required minimum distributions (RMDs), she has no annual minimum in years one through nine.

If he died on or after it, IRS rules that took effect in 2025 require annual RMDs on top of the deadline. Miss one, and the penalty is 25% of the shortfall, or 10% if corrected in time.

The fix: In the year you inherit, ask the custodian whether the original owner had started RMDs, and get your annual requirement in writing.

2. Waiting until year 10 because you don't need the money

Now say Lisa's father died before his required beginning date, so she's free to wait. That's when the tax time bomb starts ticking. At a hypothetical 7% annual return, her $500,000 grows to about $984,000 in 10 years.

If she withdraws it all in year 10 while still earning $200,000, the IRS sees nearly $1.2 million of income that year. Using 2026 tax brackets for married couples filing jointly, the withdrawal alone would trigger about $322,000 in federal income tax, an average rate of roughly 33%, with about $383,000 taxed at the top 37% rate.

The only family member who appreciates that plan is Uncle Sam.

If she instead took about $71,000 a year, enough to empty the account over 10 years at the same return, each withdrawal would top out in the 24% bracket, for an average federal rate of about 23%.

That's roughly 10 percentage points less tax on every inherited dollar. (These figures hold today's brackets and income steady and are illustrations, not forecasts.)

The fix: Not needing the cash is a reason to reinvest withdrawals in a taxable account, not a reason to postpone them.

3. Assuming equal withdrawals are always the answer

Even withdrawals beat a year-10 lump sum, but they aren't automatically Lisa's best option. Her income won't stand still for a decade.

If Lisa plans to retire five years after inheriting, she may do better taking only what's required while her paycheck is high, then larger withdrawals in years six through 10, after it stops. If she'll work through the whole window, roughly one-tenth of the balance each year, adjusted for growth, usually wins.

The fix: Build a year-by-year income projection for the 10-year window, aim the largest withdrawals at your lowest-income years and revisit the plan annually.

4. Assuming a Roth conversion always helps the family

Lisa's story holds a lesson for parents, too. The comment I hear most from parents is, "If I convert my IRA to a Roth, the problem is solved." Maybe. It depends on whose tax rate is higher.

A Roth conversion is taxable income to the parent now. If your rate is lower than your children's will likely be, converting all or part of your IRA can make sense. If your rate is much higher and your kids expect modest incomes, leaving them traditional IRA dollars may be smarter.

For estates facing estate tax, there's a bonus: The conversion tax shrinks the taxable estate.

Timing is everything here. A nonspouse heir can't convert an inherited traditional IRA to a Roth, so the window closes when the parent dies.

The fix: Compare your tax rate with your children's expected rates. If yours is lower, consider converting a slice each year rather than all at once.

5. Overlooking what an inherited Roth can do

Had Lisa's father converted, her choices would look completely different. Heirs under the 10-year rule must still empty an inherited Roth by the deadline, but they owe no annual RMDs along the way, regardless of the owner's age at death.

They can withdraw at any time, and qualified withdrawals are tax-free.

What other investment do you own that can grow for up to 10 years and then pay out tax-free?

That flips the lesson from mistake number two. With a Roth, waiting is usually the smart move.

One caution: If the original owner opened their first Roth less than five tax years before a withdrawal, the earnings may be taxable.

The fix: If you inherit a Roth and don't need the money, let it grow and withdraw near the deadline, after confirming the five-year clock has run.

Make the 10 years work for you

There's no one-size-fits-all answer for an inherited IRA, but there is a wrong one: Doing nothing for nine years and letting the deadline decide. Lisa's $500,000 grows the same either way. What changes is how much of it reaches her family.

If you're a parent, run the numbers on partial Roth conversions while the choice is still yours. If you're an heir, use year one to confirm your RMD rules, project your income and circle the years with the most room in lower brackets.

Ten years sounds like plenty of time. It goes fast, and Uncle Sam is counting on you to wait.

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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.

Everywhere business owners look these days, there seems to be another reason to hit the brakes.

Inflation remains a concern, borrowing costs are still elevated, artificial intelligence is reshaping industries at a dizzying pace, and consumers are less confident, which means they're being more selective about where they spend their money. Taken together, the headlines make a compelling case for caution.

But some of the most costly business decisions get made when leaders let uncertainty do their strategic thinking for them. Contrary to what feels like common sense, periods of economic anxiety are often the very moments when growth-minded companies should lean in, not step back.

Growth opportunities

There's nothing wrong with proceeding carefully when the ground feels unsteady. The problem starts when caution becomes paralysis. When anxiety moves into the driver's seat, hesitation hardens, and the cost of freezing tends to be far worse than whatever risk a leader was trying to sidestep in the first place.

Think about a great hitter in a tough at-bat. He doesn't walk up to the plate planning to take strike three. He studies the pitcher, adjusts his stance, and waits for his pitch. Growth-minded companies should bring that same mentality to uncertain markets. Stay disciplined. Stay patient. But stay in the batter's box.

Here's a notion worth dispensing with entirely: There is no such thing as a "risk-free" moment to expand. Markets fluctuate. Consumer preferences shift. Technology disrupts industries that thought they were untouchable.

Uncertainty isn't a weather event that eventually clears. It's a permanent feature of the business landscape. Companies that keep waiting for ideal conditions tend to find themselves suspended in place while more decisive competitors quietly capture market share and strengthen their positions.

The real question isn't whether uncertainty exists. It does, and it always will. The real question is whether your growth plans are strategically sound and grounded in market reality.

Businesses that shelve well-conceived initiatives simply because the economic mood feels unsettled are, in effect, handing their future to circumstances beyond their control. In plenty of cases, the greater danger isn't in moving forward. It's failing to move at all.

History makes this case better than any consultant ever could. Research indicates companies that continue to invest in growth during tumultuous economic times thrive over the long term.

Uncertainty may rewrite the rules of growth. It doesn't eliminate the opportunity. For well-positioned businesses, it can actually create it.

How to proceed

That said, this isn't a green light for recklessness. Growth during turbulent times demands discipline and a clear-eyed read of market conditions. A few factors are worth keeping front of mind.

Start with the cost of capital. The era of borrowing cheaply to chase vague growth ideas is behind us. Higher interest rates and more cautious investors mean companies need a real execution plan and a credible path to profitability. "We're growing" is not a strategy. A clear return on invested capital is.

Margin pressure is equally unforgiving. Rising labor costs, supply chain disruptions and higher operating expenses leave little cushion for mistakes. Meanwhile, consumers are pushing back on price increases. The balance between protecting margins and delivering genuine value has rarely been harder to strike.

And then there's the customer. When economic anxiety rises, households tighten their spending and scrutinize every line item. Products and services that feel discretionary get cut first.

Companies chasing growth in this environment have to be able to answer a simple question with real clarity: What problem do we solve, and why does it matter right now?

In uncertain times, "nice to have" is a tough sell. "Can't do without" is a different conversation entirely.

A case study

The story of Mailchimp is worth revisiting here. The company launched in the aftermath of the dot-com bust in 2001 and later navigated the Great Recession without flinching. Rather than retreat, its founders adapted their model to fit the moment.

What looked like a survival strategy turned out to be the foundation for explosive growth, ultimately transforming a scrappy startup into one of the world's leading marketing platforms.

Companies that grow through adversity tend to emerge tougher than the ones that wait it out. They develop resilience early, make leaner decisions and build the kind of organizational muscle that's hard to replicate in calmer waters.

They're also better positioned to act on opportunities that more cautious competitors miss entirely — underserved markets, strategic acquisitions and top-tier talent that becomes available when other companies are pulling back.

The most dangerous four words in business right now aren't "let's take a risk." They're "let's wait and see."

Study the pitch. Know your market, protect your margins and be honest about your capacity to execute. But don't mistake prudence for passivity. The companies writing the next chapter of American business aren't waiting for the economy to give them permission. They're already building something worth reading about.

The window doesn't stay open forever. The leaders who understand that, and act with discipline and purpose, are the ones who will look back on this moment not as a season of anxiety, but as the turning point that defined everything that followed.

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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 mixed on Monday, as an early across-the-board bounce for the main equity indexes softened during the second half of the trading session. There's renewed optimism about peace in the Persian Gulf, though investors, traders and speculators remain cautious about the AI trade.

According to Axios, President Donald Trump told Israel's Prime Minister Benjamin Netanyahu that he's open to diplomacy as a way out of the stalemate in the Middle East. In a separate but related development, the Islamic Republic News Agency (IRNA) said Supreme Leader Mojtaba Khamenei has permitted Iran's government to engage in peace negotiations.

The front-month West Texas Intermediate crude oil futures contract declined 8% to $95.84 per barrel, while Treasury yields were mixed, with the 2-year (+1.3 basis points, 4.594%) ticking higher, but the 10-year (-2.5 bps, 4.904%) and the 30-year (-2.9 bps, 5.28%) tracking lower.

"The stock market's longer-term bullish narrative may have taken some hits in recent weeks, but it's still intact," E*TRADE from Morgan Stanley Managing Director Chris Larkin observes. "The challenge has been short-term momentum — stringing together more than a few days without being disrupted by surging oil prices, concerns about AI spending, inflation, or geopolitics."

By the closing bell, the blue-chip Dow Jones Industrial Average was up 0.4% to 51,983. But the broad-based S&P 500 had shed 0.5% at 7,541, and the Nasdaq Composite was down 1.1% to 25,164.

As Larkin notes, the market's "volatility triggers" this week include midterm elections on Tuesday and the October jobs report on Friday. "Its ability to bend but not break under pressure has been a positive sign," he concludes.

Who's bigger, Apple or Nvidia?

Apple (AAPL, -1.8%), which is reporting fiscal fourth-quarter earnings after the closing bell, went back and forth atop the global market cap leaderboard with Nvidia (NVDA, -1.3%), amid another down day for semiconductor stocks.

Amazon (AMZN, +2.2%) and Tesla (TSLA, +1%) and were well in the green on Monday, with some Magnificent 7 stocks catching bids despite general skepticism about the group.

Hyperscalers Alphabet (GOOGL, -0.3%), Meta Platforms (META, -1.3%) and Microsoft (MSFT, -2.8%), for example, lagged amid lingering concerns about capex, cash flow and return on AI investment.

Idexx Laboratories (IDXX, +21.9%) led S&P 500 stocks after management of the pet healthcare outfit reported better-than-expected third-quarter results and raised its full-year outlook.

Sherwin-Williams (SHW, +6%), meanwhile, was the top-performing Dow Jones stock, as materials, financials, industrials, consumer staples and real estate, as well as consumer discretionary stocks, rose more than 1%.

Note that a Nasdaq stock with significant AI exposure, Palantir Technologies (PLTR, -3.1%), joins iPhone maker Apple on the earnings calendar this evening.

Marvell is buying Lumentum

Marvell Technology (MRVL, -12.7%) will buy Lumentum Holdings (LITE, -18.6%) in a tie-up of tech stocks with "complementary electrical and optical capabilities" that will "address increasingly complex connectivity requirements across next-generation AI infrastructure."

Lumentum shareholders will receive 4.5 MRVL shares for each LITE share they own. The deal values LITE at approximately $1,132 per share, a premium of about 24% based on each company's closing price on October 28.

Marvell says its portfolio will span "leading-edge CMOS, silicon photonics, compound semiconductors, advanced packaging and manufacturing capabilities" and deliver "highly optimized connectivity solutions across a wide range of distances," including distributed data centers.

Management expects the transaction to boost revenue growth and margin expansion over the long term, with "line of sight to more than $1 billion in annual run-rate cost synergies."

It'll be bottom-line accretive in "year one post-close." But both MRVL and LITE were down double digits in the immediate aftermath of the deal's announcement, despite the AI optimism.

Anthropic reports revenue of $17 billion

Anthropic (ANT), on track to complete what could be the biggest initial public offering (IPO) in stock market history before Thanksgiving, reported third-quarter revenue of $16.96 billion in an updated registration statement filed with the Securities and Exchange Commission (SEC) on Monday.

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Top-line growth was about 1,127% on a year-over-year basis. But growth slowed quarter to quarter, to 47% from 144% in Q2 and 132% in Q1. Management of the self-described AI research and safety company reported a net loss of $23.29 billion.

Indeed, whether to buy ANT stock is a simple question with more complex ramifications as investors, traders and speculators continue to price the durability of the AI revolution.

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If you own a profitable business and are maximizing your 401(k), you're doing more than most. You're also likely leaving a six-figure gap in your retirement strategy every year.

It's not because you aren't saving, but because you stopped at the first layer — and two more are sitting unused above it.

Here is what the full stack looks like, why it matters, and what you need to do before December 31.

Layer No. 1: The 401(k) you already know

The IRS increased the 401(k) employee contribution limit to $24,500 for 2026, with a combined employee-and-employer ceiling of $72,000. If you're 50 or older, you can add an additional $8,000 catch-up contribution — and if you're ages 60 to 63 and your plan allows it, a super catch-up of $11,250 applies..

That is Layer No. 1. Most business owners know it exists. Many are not maximizing it, and almost none have turned on what comes next.

Layer No. 2: The cash balance plan most business owners have never modeled

A cash balance plan is a defined-benefit plan — a different structure from a 401(k). It's actuarially determined, meaning the contribution you can make each year is based on your age, your compensation and what the plan calculates is required to fund a target benefit at retirement.

The numbers are significant. At age 50, a business owner in a cash balance plan might be able to shelter approximately $175,000 or more annually in pre-tax contributions.

At age 60, that number can approach $290,000 per year. The IRS lifetime funding cap under a defined-benefit structure can reach approximately $3.7 million — a ceiling most 401(k) savers will never approach.

A cash balance plan and a 401(k) can run simultaneously. Both are available to the same business owner in the same tax year. The combined pre-tax shelter can potentially exceed $250,000 annually at the right age and income level.

What makes this urgent right now? There is a hard deadline.

Why December 31 is not a suggestion

A 401(k) plan can be established and funded retroactively up to the tax-filing deadline, including extensions. A cash balance plan cannot. To claim the deduction in a given tax year, the plan must be established and contributions must begin before December 31 of that year — no grace period; no extension.

For a profitable business owner generating $1 million or more in gross revenue who has never adopted a cash balance plan, the cost of waiting another year can be measured directly: it's the tax rate applied to income that could have been sheltered but was not.

A roofing contractor I sat across from recently had been running profitable crews for more than a decade — good revenue, consistent work, a business that knew what it was doing. He had never heard of a cash balance plan, not because he was not serious about his finances — but because tax season came fast every year, the planning conversation got pushed to the side, and another year slipped by. That pattern is not unusual; it's the norm.

What the stack looks like by revenue

• At $500,000 gross revenue. A $72,000 401(k) maximum plus approximately $100,000 to $150,000 in estimated cash balance plan contributions equals a total pre-tax shelter of approximately $172,000 to $222,000.
• At $1,000,000 gross revenue. $72,000 plus approximately $150,000 to $200,000 equals $222,000 to $272,000.
• At $2,000,000 or more in gross revenue. $72,000 plus approximately $175,000 to $290,000 or more equals $247,000 to $362,000 or more.

Cash balance plan figures are actuarially determined and vary by age, compensation and plan design. Consult a licensed enrolled actuary and qualified tax adviser before adoption.

Layer Three: Taxable strategy and the estate planning trap

The third layer — a taxable account strategy, Roth conversion sequencing and after-tax investment structure — sits above both. But most business owners never reach it because they stopped at the first.

Worse, failing to coordinate these multilayered retirement vehicles creates a massive tax time-bomb for your estate. Under the current rules of the SECURE Act, non-spouse heirs are generally required to fully distribute inherited retirement accounts within 10 years.

If you successfully build a multimillion dollar cash balance plan stack but pass it on without a targeted estate-coordination strategy, your children could be pushed into their highest lifelong tax brackets during their peak earning years.

Maximizing pretax sheltering today requires an equal commitment to proactive asset-location planning and legacy structures — such as specialized trust planning or strategic Roth conversions — to ensure your tax savings aren't simply kicked down the generation gap to your beneficiaries.

Three things to do before December 31

If you're a profitable business owner and have never adopted a cash balance plan, here is where to start.

1. Ask whether you qualify. Cash balance plans are generally most effective for business owners with consistent, profitable income. Your financial adviser and a licensed enrolled actuary can confirm eligibility and model the impact for your specific situation quickly.

2. Run the five-year model. Ask your financial team: "What would a stacked retirement plan have cost us in taxes over the last five years if we had adopted one?" That number makes the conversation concrete.

3. Start now. Plan adoption, actuarial determination and contribution funding all take time. Waiting until November compresses the implementation window significantly. The December 31 deadline does not move.

If your financial team has never raised this conversation, that's worth noting. The gap between what is available and what most profitable business owners use is not a knowledge problem. It is a coordination problem which is correctable — before December 31.

Mitchell Monson is a certified estate planner, an educational credential that does not authorize the holder to provide legal advice or draft legal documents. This article is provided for educational purposes only and should not be construed as legal, tax, or investment advice. Cash Balance Plan contribution estimates are illustrative and actuarially determined; consult a licensed enrolled actuary and qualified tax professional before adoption. Past performance is not indicative of future results.

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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.

Kiplinger's recent coverage of the Great Wealth Transfer describes an estimated $124 trillion passing from older generations to heirs and charities through 2048. For parents, that inheritance tsunami raises a personal question: What will this money do to my children?

Sometimes an adult child hasn't found their way. Jobs come and go. Parents repeatedly pay the bills. Retirement savings never seem to get started. You want to help, but you worry that an inheritance — or simply the expectation of one — could make financial independence less urgent.

An incentive trust is one possible response. It ties distributions to specified actions or achievements, such as earning income, completing education or saving money. The appeal is understandable: Your assets could encourage the habits you hope your children will develop.

The difficulty is deciding what to reward, whether the reward will work and what happens when life departs from the plan.

Start with the behavior you want to encourage

"Be responsible" is a reasonable parental wish. It is a poor instruction for a trustee.

Suppose your daughter earns a steady income but saves little. A trust could match qualifying savings up to an annual limit. That gives the trustee something concrete to verify and your daughter a choice about how much to participate.

There is research supporting the potential of matching incentives. In a randomized experiment involving roughly 14,000 H&R Block customers, researchers offered IRA contribution matches of zero, 20% or 50%. Participation rose from approximately 3% without a match to 8% and 14%, respectively.

That is encouraging, but it answers a limited question. These were immediate incentives to contribute to retirement accounts. The study did not establish that participants increased their total household savings rather than moving existing money. Nor did it test whether an inheritance promised decades later would produce the same response.

The practical lesson: Matching deserves consideration. Its success in an estate plan should not be assumed.

Make sure the formula rewards what you value

An earnings match sounds straightforward: Earn a dollar, receive a dollar.

But imagine two siblings. One works in a lucrative industry. The other teaches elementary school or leaves paid employment to raise children. An identical matching formula produces very different benefits.

Legal scholar Joshua Tate's review of incentive trusts identifies this problem, along with the difficulties posed by illness, disability and circumstances the parent never anticipated.

If your goal is productive engagement, salary alone may be an inadequate measure. Your plan might recognize education, caregiving or public service separately. A fixed benefit for raising a child is another possibility, provided the document defines who qualifies and when payment becomes due.

These choices express your values. They should be deliberate.

Consider when the inheritance will arrive

Your children could be in their 60s when they inherit. By then, much of their working and saving life will be behind them.

If you hope to influence decisions in their 30s and 40s, consider discussing the arrangement while you are alive. A secret incentive cannot guide earlier choices.

For example, a plan could supplement retirement income supported by assets a child accumulated independently. A more ambitious version could offer higher matching rates as those independent resources grow.

That is a design possibility, not a proven behavioral strategy. The document would need to distinguish qualifying resources from other inheritances, account for pensions and avoid rewarding withdrawals that merely move money between accounts.

The family would also need to understand how changes in your finances could affect the eventual benefit.

A modest savings match during your lifetime may offer a useful opportunity to observe how your child responds before committing to a lasting arrangement.

Money cannot do every job

Some children need help developing skills, confidence or judgment. A financial reward may not address the underlying difficulty.

Psychological research also cautions against assuming that rewards invariably strengthen motivation. A review of 128 experiments found that certain expected tangible rewards reduced people's subsequent voluntary engagement in activities.

These experiments were not studies of inheritances, and they do not establish that incentive trusts fail. They do suggest caution about turning every valued activity into a paid transaction.

A trust can also pay for financial education, career counseling or help developing a workable budget. Those provisions may complement an incentive — or serve your child better than one.

Find an attorney who can work through the details

Incentive trusts require individualized drafting, and some estate planning attorneys may have little experience with them. Ask whether your attorney has drafted one and how they would address the practical difficulties.

Before signing, work through realistic examples. What happens after a layoff? During cancer treatment? When a child becomes a caregiver? Who verifies savings, and how much financial information must the beneficiary disclose?

For married couples, a QTIP marital trust may provide another safeguard. It can support the surviving spouse while preserving the remaining assets for children under incentive provisions fixed at the first spouse's death.

As long as the trust is properly drafted, the survivor cannot simply rewrite those conditions under family pressure. The children's payments from those assets would begin after the survivor's death, and the plan must preserve adequate support for the survivor.

The work begins with understanding your child's circumstances and translating your objectives into instructions a trustee can actually apply. Clear definitions, workable verification requirements and flexibility for unexpected events deserve as much attention as the incentive itself. The arrangement also needs to fit the assets available to fund it.

The question to bring to your attorney is specific: "What support would help this child build a more independent life, and how can we provide it without creating another obstacle?"

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

When it comes to investing, wisdom from the late Jack Bogle remains relevant years after his death. The founder of Vanguard, now one of the world's largest money managers, focused on developing index funds with ultra-low costs. He advised investors not to time the market, meaning sell during a crash and buy when it's rising.

With that guidance in mind, we asked Wall Street experts to name the five investment funds you really need.

1. U.S. stocks

For U.S. stocks that provide steady high returns, Richard M. Rosso, director of financial planning at RIA Advisors, suggests the Vanguard Equity-Income Fund Admiral Shares (VEIRX).

"You're getting large-cap companies and focus on undervalued stocks with hefty dividends," he says. This approach to U.S. stocks also avoids "roller-coaster" returns, meaning huge up-and-down swings in returns, which could stress out many people in retirement.

The fund posted double-digit returns over six years between 2016 and 2025. It only lost money in one year, 2018. Even better, the annual expense for holding the fund was a mere 0.17%.

2. U.S. bonds

"In the long term, bonds are a ballast to a portfolio," says Sam Stovall, chief investment strategist at CFRA. In other words, having fixed income as part of your holdings will help stabilize the fund's performance. "Things that work in the past end up working in the future."

Stovall recommends the iShares Core U.S. Aggregate Bond ETF (AGG). The ETF's holdings are overwhelmingly (99.99%) investment grade, which generally means the fund's components are not high-risk investments.

However, recent returns through mid-September have been weak, with a loss of almost 1%. That loss likely reflects the current inflation surge and drop in government bond prices. The cost of holding the fund is a tiny 0.03%.

3. Emerging market stocks

Foreign stocks are worth a look, says Todd Rosenbluth, head of research at VettaFi. He points to the Vanguard FTSE Emerging Markets Index ETF (VWO). The holdings include strong companies such as Taiwan Semiconductor Manufacturing (TSM), Alibaba Group Holding (BABA) and Tencent Holdings (TCEHY).

"Here you get broad diversification, and market cap weighting in the holdings," Rosenbluth says. Recent returns have also been strong. Over the last three years through mid-September, the fund has returned an annualized 17.4%. The fund expenses are low at 0.06%.

4. Commodities

Alternative investments also matter because they tend to move in different cycles than stocks. Notably, commodities are a useful addition to a portfolio in relatively small portions.

Rosenbluth suggests the ABRDN Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD). "Here you get diversification in energy, precious metals, and agricultural products," he says. It's also relatively cheap, with an annual expense ratio of 0.3%.

One benefit of commodities is the tax on profits known as K1, which Rosenbluth says is "a better tax experience." It tends to mean lower payments to the Treasury.

Commodity returns can be volatile. Over the last 12 months, especially after oil prices skyrocketed, the fund was up 34% through to mid-September.

5. Real estate

Stovall suggests another alternative investment: Real estate. As many of us know, the price cycle for this asset tends to move up and down over the years. He suggests including a small portion of a portfolio in this asset.

He suggests picking the Vanguard Real Estate Index Fund ETF (VNQ). From 2018 through 2025, it lost money in only two years. This year through mid-September, the fund gained 8.9%. The expenses are also low at 0.13%.

Choosing the right mix of stocks, bonds and alternative investments depends on your financial goals, risk tolerance and time horizon. A financial adviser can help you build a diversified portfolio that balances growth opportunities with long-term stability.

Use the tool below to connect with a vetted financial professional:

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

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The past two decades have been dominated by digital innovations. From mobile to social to cloud computing and now AI, technology and communication services companies have become the biggest stocks on the planet.

The Invesco QQQ Trust (QQQ) exchange-traded fund, which comprises the 100 largest nonfinancial stocks on the Nasdaq, has been a great way to play the market's biggest secular growth story of the past 20 years. Just look at this murderers' row of its five biggest holdings: Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Micron Technology (MU) and Amazon.com (AMZN), which collectively account for 30% of the ETF.

When it comes to cheap and easy diversification, you can't go wrong with an S&P 500 ETF, such as the Vanguard S&P 500 ETF (VOO) or SPDR S&P 500 ETF (SPY).

Technology and communications names account for almost 48% of the S&P 500, but holding five times the number of stocks versus QQQ means the mega-caps have less influence. Apple, Microsoft and Nvidia represent a significantly larger percentage of QQQ's total assets, amplifying its returns as those specific companies have reached multi-trillion-dollar valuations.

The S&P 500 also holds lots of banking and insurance stocks, which, as noted above, QQQ excludes. The great financial crisis and subsequent era of rock-bottom interest rates did the financial sector — and the S&P 500 — few favors. Financial stocks account for almost 12% of the benchmark index today.

The steady ascent of tech and the worst downturn since the 1930s pretty much explain QQQ's extraordinary returns over the past 20 years. To be sure, the S&P 500 has been very good to patient investors, but it lags QQQ by wide margins.

The bottom line on QQQ vs SPY

Have a look at the above chart and you'll see that if you invested $1,000 in QQQ 20 years ago, it would today be worth $20,000. That's good for an annualized total return (price change plus reinvested dividends) of 16.1%.

By comparison, the same sum socked away in SPY would be worth $8,000, or 11% annualized. That's pretty darn good and, importantly, it came with much less volatility.

This last point is key. As they say on Wall Street, there is no such thing as a free lunch. True, QQQ greatly outperformed the broader market, but that outperformance is a risk premium. When the Federal Reserve started rapidly raising interest rates in 2021 and 2022, QQQ fell 36% from its peak. SPY suffered a drawdown of roughly 25%.

As gaudy as QQQ's past performance has been, remember that it comes with more risk. And if all things AI really do lead to a burst bubble, this ETF is sure to take an outsized beating.

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 Amazon Stock 20 Years Ago, Here's What You'd Have Today

If the upcoming Thanksgiving holiday and Giving Tuesday have you thinking more about giving generously, you're not alone. Charitable giving typically ramps up in the holiday season as the end of the year approaches. When done right, giving can benefit both you and the causes you care about.

Turn RMDs into tax-free giving A qualified charitable distribution (QCD) allows you to donate up to $111,000 a year directly from your IRA to a qualified charitable organization. That limit is $222,000 for a married couple when both spouses qualify and have eligible IRAs.

The donation counts toward your required minimum distribution (RMD), lowering your income (and lowering your tax obligation) while also allowing you to support a charity of your choice.

Qualified charitable organizations are typically 501(c)(3) organizations. Individuals can make QCDs to charities where they serve on the board, provided the organization and donation meet IRS eligibility requirements. QCDs can be an impactful way to extend generosity to a worthy cause, but also to potentially lower your tax bill.

If you're looking for a way to give to other causes you care about, while also decreasing your taxable income, ask your financial adviser if a QCD might be a good option for you.

Donor-advised funds: Give now, decide later

A donor-advised fund (DAF) establishes an irrevocable giving account to a 501(c)(3). The account allows you to consolidate several years of donations into one tax year to maximize deductions. You then recommend grants over time.

A DAF can be ideal for high-income years or in preparation of retirement years since this route can grant you flexibility, control and lasting impact.

A DAF allows you to take on an advisory role to suggest where the funds should go, but the giving account falls under the legal ownership of the sponsoring organization. A sponsoring organization can be a foundation, or the charitable arm of a financial institution, or even a specific charitable organization.

It's up to the sponsoring organization to handle the bookkeeping and to distribute the funds, keeping your recommendations in mind.

If you want to maximize your charitable donations and create a lasting impact, a DAF might be a good option to explore. But if you want full control over where your donations go, or if you want to give to a cause that's not a 501(c)(3), other giving options might be more appropriate for you. It's definitely worth a discussion with your financial adviser.

Donate appreciated assets, not just cash

One method for giving more while paying less to Uncle Sam is to donate appreciated assets. Gifting stocks, ETFs, or mutual funds that have grown in value can help you avoid capital gains taxes while also potentially claiming a tax deduction for the full market value.

Instead of cashing in appreciated assets and then turning around and donating that money to a charity, directly donating the appreciated assets can result in a bigger donation overall. You get to avoid capital gains taxes, and the charity benefits from the full donation.

Not every charitable organization will have the capability to accept appreciated assets, though even the smallest charities can typically partner with a third-party processing agent to accept the donation. If that's not an option, consider a DAF, which can typically accept appreciated assets before distributing funds to charities.

Make giving a family value

Giving can feel quite personal, but bringing your kids and grandkids into the philanthropy conversation can foster a family culture of giving that can endure for generations. By making charitable giving a family decision, the next generation learns about the power of stewardship.

Take a cue from the Rockefeller family. For nearly a century, they have met twice a year, not only to discuss family news, but to discuss shared values. Charitable giving by the family has the buy-in of the entire family, and legacy and impact are at the forefront of philanthropic conversations. A shared purpose can be powerful, especially when it endures through the generations.

Set time aside for an annual "family meeting" to discuss the causes everyone can get behind. This demonstration of solidarity and philanthropy sets the stage for kids and grandkids to eventually regard giving as a joyful act instead of something that's someone else's responsibility.

If you're at a loss as to how to facilitate a family meeting, your financial adviser likely has tips and resources they can offer you.

Define your 'why' before you write the check

The most meaningful giving starts with clarity about the causes that align with your values. It's important to be intentional about your giving and to support charities that do the work that is meaningful to you.

Potentially lowering your tax obligation is only one of the many benefits that come with being generous to charitable causes. Research suggests that being charitable can benefit your mental well-being and provide a deeper sense of purpose.

Beyond those benefits, of course, are the benefits derived from your donation by the charitable organization and the surrounding community as a whole.

Whether it's education, health or community, focus your donations on causes that align with your values. Get your family involved so you create a lasting legacy of joyful giving.

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• If You're in Your 50s or Nearing Retirement, Protecting Your Well-Being Is as Important as Protecting Your Savings

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

Jim and Mary, now 76, had been taking their required minimum distributions (RMDs) for several years and were quite diligent in following the RMD rules. But as it turned out, their "rule following" wasn't doing them any favors.

I asked these new clients to bring in their tax return for a review.

"How do you take out income and RMDs each year?" I asked them.

"Well, we don't need the income," Jim replied, "but we have to take out the RMDs. Each January, we called our previous investment adviser and sent the RMD to our bank account. I know other people wait until December, but we never want to miss a year."

"Then in December each year, Mary and I figure out which charities we want to donate money to and we generally give away our full RMD each year, since we don't need it ourselves. We keep records of it all to give our tax person so we get our tax deduction."

I asked Jim and Mary if either of those advisers had introduced them to the concept of qualified charitable distributions (QCDs), or if they had ever figured out how much of their charitable giving was actually tax deductible.

"We haven't heard about QCDs," they replied, "and isn't all of our charity tax deductible anyway?"

"A QCD is available once you turn 70 ½," I told them. "You can then have your IRA custodian send money directly to an eligible charity. The distribution doesn't show up as taxable income to you, but it still counts towards your RMD amount."

It turns out that despite giving $10,000 a year — their whole RMD — Jim and Mary weren't getting even one dollar in a charitable deduction, because they weren't itemizing.

They had missed out on $2,200 in tax savings in both 2021 and 2022, and neither of their trusted advisers had told them.

Jim and Mary thought they were doing the right thing. They got all the right forms, took care of their RMDs and tracked all their donations.

They also thought their days of high taxes and complicated returns were over, so they were paying less attention to their tax situation.

But like many retirees, they were unwittingly making more of their Social Security taxable, paying more in taxes because of how they were giving to charity, and failing to plan for the future tax changes the surviving spouse was likely to face.

Here are the three biggest tax mistakes I see people making in their 70s — often because they assume that once RMDs begin there is nothing left to plan for tax-wise.

1. Treating your RMD as an isolated event, not part of your retirement tax plan

Jim and Mary were quite focused on meeting the RMD rules — even doing the calculations and distributing the RMD in January, much earlier than most.

What they weren't doing was seeing how their RMD fit into their retirement tax plan.

For them, making use of QCDs would have met their goals and lowered their taxes significantly.

For others, using RMDs to do tax withholding, instead of estimated payments might work better.

2. Assuming you're 'too old' for Roth conversions once RMDs begin

I must have heard it a thousand times over the past 23 years as a financial adviser: "My CPA says I'm 'too old' to do Roth conversions."

Thankfully, there are no age limits with Roth conversions, and beginning your RMDs doesn't stop you from doing them.

If they are a good idea — because they're projected to save you, your widowed spouse or your heirs on the total taxes paid from your IRA — your age shouldn't be a factor in your decision.

You do need to follow some extra rules, though, once you hit RMD age:

• You cannot convert your RMD
• You must satisfy your RMD before you do a Roth conversion

Jim was a retired pastor, and the income tax treatment from his minister pension was going to change if he died first. Mary would thankfully get the same amount, but now it would be all taxable instead of nearly tax-free.

Once we helped them meet their RMD obligations, we found the right amount for them to convert to their Roth IRA each year so Mary could start building up tax-free money, assuming the Roth IRA distribution rules were met, for when her tax situation changed after Jim's passing.

3. Giving to charity but missing out on tax benefits

Jim and Mary were quite generous giving to the charities they supported, but they were also quite generous to the IRS. They were overpaying their taxes by $2,200 each year just because they got the sequencing wrong with their giving.

Once they sent their RMD to their bank account, they weren't able to later count that distribution, or the gifts they personally sent out, as a QCD. To meet those rules, they needed to have the money go directly from their IRA to an eligible charity.

Like many other retirees I've seen over the years as a financial adviser, they thought it really didn't matter since they would get a tax deduction anyways.

But there are two other factors they forgot about.

Because the RMD payout showed up as taxable income, it made more of their Social Security taxable. In 2026, that could also cause someone to miss out on part of the enhanced senior deduction.

Because the standard deduction level is so high now, many retirees think they are getting itemized deductions when they aren't.

There is now a charity deduction for non-itemizers that helps you deduct up to $1,000 for single and $2,000 for married filing joint taxpayers in 2026, but Jim and Mary were giving well beyond that number.

They were keeping great tax records for their $10,000 in charitable donations, but they weren't getting the large tax break they thought they were.

Tax planning doesn't stop in your 70s

The underlying problem in each of these three mistakes is that the decision was made in isolation, not in coordination.

There's nothing wrong with taking care of your RMDs, doing Roth conversions or giving to charity and keeping track of your donations.

Where Jim and Mary went wrong was treating their RMDs as a get-it-over-with transaction, not as a part of their larger retirement puzzle.

Putting those individual retirement, investment and tax decisions into the right place in the puzzle can help you avoid tax mistakes not just in your 70s, but before and after.

That's why I developed the 5-step "Retirement Master Plan" process, which you can learn about in my book Retire Today.

Many people hit their 70s thinking their tax planning days are behind them. That's the kind of stuff you do when you're working and saving for retirement, right?

Nope. Don't fall into the trap of thinking that the start of your RMD years means the end of your tax planning years.

When you hit your 70s, the IRS starts choosing the minimum amount that has to come out of your IRA each year. But it doesn't choose your charitable, tax withholding, investment and Roth conversion strategies.

With thoughtful planning, and a coordinated retirement process, you can still make tax planning choices in your 70s that help you avoid common mistakes.

Related Content

• Year-End RMDs: 10 Ways to Invest, Spend or Donate Them
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
• QCDs Are a Tax-Smart Way for Retirees To Donate to Charity
• The 3 Biggest Tax Mistakes Retirees Can Make in Their 60s: One Involves Roth Conversions
• Just Retired? This Could Be Your Once-in-a-Lifetime Opportunity to Lower Your Lifetime Taxes

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 looking for swing plays in November need to keep an open mind.

I know what you're thinking: "November just started. Can't we please enjoy a little more fall before yammering on about the holiday season?"

Or maybe, "The last thing I want to read about right now is anything politics."

Don't worry. I'm on your side.

That's why I'm going to look at some of the best investing options for November … without considering the month's two biggest events.

November's 2 best sectors aren't the usual suspects

All I'm going to say about Black Friday is that it's not as big a factor here as you'd think it would be.

The consultant set expects another banner shopping year in 2026, according to recent estimates from Bain & Co. Their research shows that some $85 billion should be spent from Black Friday to Cyber Monday — almost 9% more than during the same period last year.

That number ignores the rest of the month, which is increasingly falling victim to the mushrooming blob that is "early Black Friday" sales.

But it's enough to set up the idea that (at least as far as headlines are concerned) the month would seem to belong to retailers, and thus consumer discretionary stocks … and to a lesser extent, tech stocks, which power and even produce many of the big-ticket products pushed during the holiday rush.

In reality? Not so much.

* The XLC was launched in 2018, while the XLRE was launched in 2015, amid changes that created these specific sectors. Each of these sectors' percentages represent their actual returns multiplied by a market-average-difference factor to approximate how they might have performed in those environments.

The consumer discretionary sector has been historically fine during November, but there's nothing to suggest that Black Friday pushes the sector as a whole forward. Why would it? Many of those names are competing against one another for the same consumer dollars, and Wall Street generally expects people to spend during that period.

Sure, I could try to handicap individual consumer names anyways, but that would boil down to a childless man trying to divine the next Tickle Me Elmo, Furby or Grogu. Not happening.

Technology has been relatively weak during November — both before and after the 2018 sector shake-up in which names such as Meta Platforms (META) and Alphabet (GOOGL) became communication services stocks.

We should've been listening to "Santa Baby" for hints. Eartha Kitt wasn't asking for dolls and iPhones. She wanted convertibles and mines, which belong to the realms of industrials and materials.

What about the election?

What about it?

You find me someone who predicted all the market-moving political events of the past 18 months, and I'll ask you to get their stock picks for me, too.

Personally? I side with Dan Burrows, who dropped this recent gem about what the midterms mean for your portfolio:

"Predictions about which sectors are set to outperform or lag are too often just plain wrong. Recall that ahead of President Donald Trump's first term, investors were advised to load up on Big Oil and small-cap stocks (wrong and wrong) and avoid Big Tech and renewable energy names (wrong and wrong, again)."

If we're going to do this, we're going to do this by the numbers. In the past 20 years, materials and industrials boast at minimum top-five average returns in all Novembers, all election Novembers, and all midterm Novembers.

Each of the picks below enjoys some of the highest analyst ratings in their sectors, as determined by their average broker recommendations, courtesy of S&P Global Market Intelligence.

Data is as of October 29.

2 industrial stocks to buy in November

SPX Technologies (SPXC) is an industrial manufacturing and infrastructure equipment company that specializes in heating, ventilation and air conditioning (HVAC), as well as detection and measurement.

The company is off by nearly 20% year to date amid general weakness in the industrial sector (and small- and midcap industrials specifically), but it maintains a highly convicted bull camp of 13 Buys vs one Hold and zero Sells.

"Our confidence in sustained HVAC outgrowth is unchanged, D&M (development and managerment) remains well positioned to leverage critical infrastructure and defense technology spending, and we see no reason to question SPX's proven M&A playbook and flywheel value creation runway," Oppenheimer analyst Bryan Blair, who rates SPXC at Outperform (equivalent of Buy), wrote in an early October note. "Combining that setup with increasingly attractive valuation, SPXC remains among our top picks, and we believe recent weakness affords a strong buying opportunity in shares."

While SPXC currently trades at 19 times next year's earnings and a PEG (price/earnings-to-growth) of one, which indicates it is merely fairly priced, Oppenheimer says the stock warrants a premium compared to its peers.

GXO Logistics (GXO) is a contract logistics provider offering warehousing, distribution, order fulfillment and e-commerce services. It followed the rest of the market south during the March swoon, then it never really got up off the mat, despite posting a pair of better-than-expected quarterly results.

But Wall Street continues to believe in GXO — unanimously, in fact. The company has 17 ratings, all of which are Buys, according to S&P Global Market Intelligence data.

"GXO remains near the top of our ‘misunderstood-and-undervalued' list, trading at trough valuation levels despite having a highly visible and predictable earnings profile," say Jefferies analysts, who rate the stock at Buy. "The company's underlying commercial signals are the strongest they have been in years, with a record $2.7 billion sales pipeline and accelerating wins in strategic B2B (business to business) verticals like aerospace and life sciences."

GXO has a potential November catalyst: its Investor Day, scheduled for Monday, November 16. Jefferies believes it "will be a significant catalyst for a multiple re-rate as investors gain confidence in the company's structural margin expansion and robust free cash flow generation."

2 materials stocks to buy in November

One of the best-rated materials-sector stocks on the market right now also made a list of undervalued stocks a couple of months ago.

I'm talking about Smurfit Westrock (SW), which is a global provider of containerboard, corrugated containers and other paper-based packaging products. A boffo holiday shopping season would indeed benefit Smurfit, whose fortunes have been lifted by worldwide growth in e-commerce. But it would take a better-than-expected result for the entire online shopping season, which we wouldn't really be able to confirm until December.

Here's a more material headline: paperboard producer Paperworks recently said it would raise prices on all grades of recycled paperboard by $60 per ton, which Truist analysts believe is positive for several industry names, including Smurfit, which it rates at Buy.

If you're buying with more than November in mind, Argus Research's Alexandra Yates (Buy) sees "long-term upside potential and expects earnings growth congruent with growth in e-commerce and growth in demand for sustainable paper and packaging goods." They're two of the unanimously Buy-rated 17 analysts on this value-priced name.

Smurfit also pays us a generous dividend that currently yields 4.4%.

Lastly, there's Newmont (NEM), the world's largest gold mining company, though it produces far more than the yellow metal. Its Peñasquito operation in Mexico is one of the world's largest silver mines; it produces copper, silver, zinc, lead and molybdenum, too.

Newmont has the largest analyst following of these four stocks, which makes a unanimous consensus less likely. But it still boasts 19 Buys to three Holds and one Sell, which is still mighty bullish.

The stock is up by double digits, albeit in roller-coaster fashion. But UBS analyst Daniel Major (Buy) believes there's more room to roll, writing in September that "clarity on cash returns and ability to grow [gold equivalent ounces] production per share through the combination of sustained share buybacks and modest improvement in production differentiates Newmont vs gold peers."

He adds that the company's August agreement to settle a joint-venture dispute with rival Barrick (B) eliminated a significant overhang on the stock — and that the market is underappreciating how much relief that provides.

While Newmont doesn't mine for platinum, it does own shares in Canada's Metallic Minerals, which does. I hope that's enough for Catwoman.

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Should I convert? And if so, how much? And when? And how do I actually do it? This is usually the sequence of questions I receive around Roth conversions. And the answer to all of them, I know you'll be surprised to hear, is it depends.

Each person has a unique financial, tax and life situation. What makes perfect sense in one situation might not be as elegant in another.

Roth conversion basics

A Roth conversion is when you move money from a pretax retirement account, such as a traditional IRA or, in some cases, a 401(k), into a Roth IRA.

You pay the tax when you convert. Generally, the amount you convert that hasn't previously been taxed is added to your ordinary taxable income for that year.

Suppose you have $100,000 in a traditional IRA and convert $20,000 to a Roth IRA. Assuming all of the money in the IRA is pretax, that $20,000 generally gets added to your taxable income for the year.

If those dollars fall within the 22% federal tax bracket, the conversion could create roughly $4,400 of additional federal income tax.

Of course, the actual amount depends on your entire tax situation, including your income, deductions, state taxes and whether you have any after-tax money in your IRAs.

Why would you voluntarily pay the tax before you have to? Because you are essentially making a decision about when you want to pay it.

With a traditional IRA, you get tax-deferred growth, but taxable distributions are generally taxed as ordinary income when the money eventually comes out.

With a Roth IRA, you pay the applicable tax on the conversion today, the assets can continue to grow inside the Roth, and qualified distributions can ultimately come out free from federal income tax. Roth IRAs also don't have required minimum distributions during the original owner's lifetime.

This is where it gets really interesting. Reducing the amount of money sitting in pretax accounts can potentially reduce your taxable income later in retirement. That can help with things like Medicare premiums and IRMAA, the taxation of Social Security, your capital gains tax rate and the taxes you pay on your other sources of income.

But, and this is a big but, a Roth conversion increases your taxable income in the year you actually do it. So doing too much at once could push you into a higher tax bracket, increase future Medicare premiums through IRMAA or cause more of your Social Security to become taxable.

This is why the question isn't really, "Should I do a Roth conversion?" It is, "How much should I convert, when should I convert it, and how much tax am I willing to pay to do it?"

Three factors to consider: Income tax rates, longevity and Social Security

Broad strokes, we are in a relatively low federal income tax environment compared with several periods in modern U.S. history. The highest federal individual income tax rate for 2026 is 37%.

For some perspective, the top marginal rate was 91% through much of the 1950s and early 1960s, 70% through much of the 1970s, 50% from 1982 through 1986, 28% from 1988 through 1990, 39.6% from 1993 through 2000, 35% from 2003 through 2012, 39.6% from 2013 through 2017 and 37% beginning in 2018.

Does that mean taxes are definitely going up? No. Does it mean you should run out and convert your entire IRA tomorrow? Also no. But it's important context when we're deciding whether we want to pay a known tax rate today versus an unknown tax rate 10, 20 or 30 years from now.

No one knows what Congress will do with tax rates in the future. What we do know is what the tax rules look like today, how much you currently have sitting in pretax accounts and, with reasonable assumptions, what those accounts could look like in the future if we do absolutely nothing.

Another consideration is that the number of Americans age 65 and older is growing rapidly. The Census Bureau has projected that by 2034 there will be approximately 77 million Americans age 65 and older.

At the same time, Social Security is facing a significant long-term funding challenge. According to the 2026 Social Security Trustees Report, the combined Social Security trust funds are projected to have sufficient reserves to pay scheduled benefits until 2034.

If no changes were made, continuing program income would be sufficient to pay about 83% of scheduled benefits when those reserves are depleted.

That doesn't mean Social Security disappears in 2034, but it does mean that something eventually has to change.

It's like a household budget: When we're consistently spending more than we're bringing in, there are only so many levers to pull. More money needs to come in, less money needs to go out or some combination of the two needs to happen.

What exactly that means for future tax rates, Social Security or Medicare is impossible to know today, and I certainly don't have a crystal ball. But "let's wait and see what happens" isn't much of a retirement tax strategy either.

Your future tax liability

Here's the other thing people miss. If you have $2 million in a traditional IRA, you see $2 million on your statement. But you don't necessarily have $2 million available to spend.

If those dollars have never been taxed, the government still has a claim on some portion of that money when taxable distributions occur. We don't know exactly how large that claim will ultimately be because we don't know what your income or tax rates will be at the time.

That is your future tax liability. And if you have accumulated $2 million, $3 million, $5 million or more almost entirely in pretax retirement accounts, that is something I want to understand before the IRS starts telling us how much you have to take out every year.

There are also certain windows where Roth conversions can become particularly interesting.

• Maybe you retire at 62 and have several years before required minimum distributions begin
• Maybe your income temporarily drops
• Maybe you delay Social Security
• Maybe you have unusually large deductions in a particular year
• Maybe we deliberately convert just enough each year to use a particular tax bracket without unnecessarily spilling into the next one

This is where tax planning becomes financial planning, rather than simply tax preparation.

Regardless of whether right now is the right time for you to execute a Roth conversion, it is the right time to be evaluating your future tax liability and planning for how you're going to deal with it.

I have so many clients who come to us when they're nearing or recently retired. When we review their circumstances, there are things they could have done five or 10 years earlier that are no longer possible, or simply aren't nearly as attractive, because they missed the window.

Saving $100,000 in taxes may not seem like too much in the grand scheme of things when you have a net worth of several million dollars, but money has an opportunity cost.

If that $100,000 remained invested over a 25-year retirement and hypothetically earned a 6% annual rate of return, it would grow to approximately $429,000. That is $429,000 that could have gone to your children or grandchildren, your favorite charity or that amazing trip around the world you always wanted to go on.

Of course, a 6% return is hypothetical and isn't guaranteed. Actual investment returns fluctuate, and this example doesn't account for taxes, fees, inflation or differences in investment strategy.

The point is simply that every unnecessary dollar that goes out the door is a dollar that no longer gets to compound for you.

How to get ahead

So, if you're a high-income earner or have accumulated a lot of assets that are currently sitting in qualified accounts such as IRAs, 401(k)s and 403(b)s, you need to get ahead of this. Ask the following:

• What will your required minimum distributions eventually look like?
• What will your taxable income look like in retirement?
• What happens to your Medicare premiums?
• What happens when one spouse dies and the surviving spouse is suddenly filing as a single taxpayer?
• What happens when your children inherit these accounts?
• And, most importantly, if you don't like the answers, what can you do about it while you still have options?

The goal isn't simply to pay the least amount of tax this year. The goal is to understand what you and your family could pay in taxes over your lifetime and make intelligent decisions today while you still have the ability to influence that number.

Related Content

• The 3 Biggest Tax Mistakes Retirees Can Make in Their 60s: One Involves Roth Conversions
• Here's Why You Shouldn't Put All Your Money Into Roth IRAs
• 5 Times You Should Absolutely Not Do a Roth Conversion
• Avoiding IRMAA Can Actually Cost You More in Retirement: A Financial Adviser Explains Why and What You Can Do Instead
• The Retirement Move That's Quietly Taxing Your Social Security to the Max (and How Early Roth Conversions Can Help)

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 have $2 million invested towards your retirement, you've accomplished something most Americans haven't. You're likely right around the top 10% by net worth.

But here's the problem: Being "ahead" of most Americans doesn't mean you are ready to retire, even if you are sitting on a seven-figure nest egg.

For many 65-year-olds, $2 million might be more than enough to support their retirement goals.

For others, $2 million might not.

When you have a $2 million net worth, you're "ahead" of 90% of Americans and averages and comparisons stop mattering as much.

What matters is: Does your $2 million support your specific retirement goals?

$2 million, 2 very different retirements

Dave and Susan are both 65. They live in a $600,000 home with no mortgage. Their ongoing housing costs are limited to property taxes, insurance and maintenance.

Dave has a pension of $25,000 per year, and between their two Social Security benefits, the couple collects another $50,000 annually. That's $75,000 per year in reliable, predictable income.

Dave and Susan want to spend about $115,000 per year, including income taxes. They have no credit card debt, their cars are paid for, and their travel plans consist of a couple of road trips each year to visit their grandchildren.

Because their guaranteed income covers $75,000 of their $115,000 lifestyle, Dave and Susan only need their $2 million portfolio to generate $40,000 of income per year. That's an initial withdrawal rate of just 2% — half the percentage of the often quoted 4% rule.

That relatively low initial withdrawal rate gives them more flexibility to weather market downturns or unexpected expenses without immediately making significant changes to their lifestyle.

For Dave and Susan, $2 million seems plenty.

Mark and Karen are also 65. They live in an $800,000 home that has a $300,000 mortgage balance, in addition to property taxes, insurance and maintenance.

Mark and Karen were high earners during their careers, so their Social Security benefits will be substantial — nearly $70,000 combined.

Neither has a pension or any other source of reliable retirement income.

They want to live on $170,000 per year. In addition, they also plan to purchase a $1 million vacation home in Florida.

They are asking their $2 million portfolio to generate $100,000 every year to cover their annual spending budget, including a mortgage payment, at a 5% withdrawal rate.

According to Morningstar's latest retirement spending research, the 5% portfolio withdrawal rate is within the range supported by a dynamic, or guardrail spending approach. These flexible withdrawal methods suggest a higher initial portfolio withdrawal if you're willing to reduce your withdrawals when needed, based on the market or inflation.

But here's where they might get into trouble.

Their $2 million will also have to produce the down payment for a second, million-dollar property, as well as cover a second set of mortgage payments, property taxes, utility payments and maintenance costs.

If they take out $400,000 total from their retirement nest egg for their down payment, including the income taxes due on their large traditional IRA withdrawal, that leaves them with $1.6 million.

Asking your $2 million portfolio to generate $100,000 income does fall within the ranges supported by some of the flexible spending strategies, but those approaches make assumptions, too, about your stock mix, retirement length and willingness to reduce withdrawals in times of market volatility or high inflation.

But asking your $1.6 million portfolio to generate $100,000 income is a 6.25% withdrawal rate, much higher than the percentages supported in the flexible withdrawal research — and that's without accounting for the new mortgage from their vacation home.

With two mortgages now, Mark and Karen are running out of room to be flexible.

If the market drops, Dave and Susan have the room to cut back.

Mark and Karen, however, have to pay their monthly mortgage no matter how their investments perform. For them, $2 million seems like a stretch.

Two couples, both with $2 million dollars saved, with two very different visions for retirement. An account balance is only one part of a retirement plan.

What $2 million actually has to accomplish

When I meet soon-to-be retirees for the first time, they often worry that their investments need to replace their entire working salaries.

That's almost never true.

Your retirement portfolio only needs to fill the gap between what you want to spend and what you already receive from other reliable income sources, such as a pension and Social Security.

The question is: How big is that gap? How much work will your portfolio need to do?

Let's go back to Dave and Susan. Their gap was $40,000. With Dave's pension and their Social Security benefits, they have a manageable initial withdrawal rate of 2%.

Meanwhile, Mark and Karen were asking for much more from their portfolio, at a 6.25% withdrawal rate.

Both sets of retirees had $2 million, but the right question isn't "How does $2 million compare with the rest of America?"

The right question is, "Will $2 million be enough for me in my retirement?"

5 questions that determine if $2 million is enough

1. How much will you spend?

Don't rely on a generic general rule that tells you to spend 70% or 80% of your pre-retirement income or withdraw 4% every year. Start instead with your current spending — that's how much is going to your current lifestyle, and often you'd prefer to maintain your current lifestyle.

The easiest way to estimate your spending is to look at your current take-home pay. You'll have to adjust for taxes and healthcare costs, but as I always say, "What goes into your checking account usually gets spent."

2. How much guaranteed income will you make in retirement?

Every dollar of guaranteed income from Social Security or a pension is a dollar your portfolio doesn't have to produce. If you're able to optimize your Social Security and pension, you don't have to rely as much on your investments in retirement.

3. How much money will you keep after taxes?

This largely depends on which types of accounts hold your money:

• Traditional IRAs and 401(k)s. Withdrawals are generally taxed as ordinary income.
• Roth IRAs. Qualified withdrawals are generally tax-free
• Taxable brokerage accounts. Long-term capital gains from investments held for more than one year are generally taxed at preferential federal capital gains rates.
• Cash savings. Withdrawals out of savings aren't by themselves taxable, although the interest earned is reported as taxable.

Your choices on which accounts you withdraw money from, and when you withdraw that money will be a big determinant to how much taxes you pay each year.

4. How will you invest your money?

In retirement, you need both short-term money to pay your living expenses and long-term money that's positioned for growth.

If your portfolio is exposed to too much market risk, you might feel uneasy about spending.

But if you're not exposed to enough market risk to drive up long-term returns, your money might not grow enough to support you in the later years of retirement.

5. What type of legacy will you leave?

Think about our second couple, Mark and Karen, who were planning to buy a $1 million vacation home. While that might be a worthy goal, they need to consider how things work out if their projections don't go as planned.

What's their plan for long-term care expenses, or what happens if one of them passes away earlier than expected?

How will the surviving spouse deal with a lower income? What are the tax consequences to how their kids inherit their remaining money?

In my book, Retire Today, I show retirees how to coordinate their answers to these questions into a simple five-step master plan: Spend, Make, Keep, Invest and Leave.

Your account balances matter. But only after you understand what the money needs to accomplish can you create your own retirement master plan.

Is $2 million enough to retire at 65?

For many retirees, the answer is yes.

That's a more likely yes if the lifestyle and spending needs you're planning for in retirement are aligned with your Social Security choices, tax planning, investments and legacy planning.

But high-earners whose salaries are paying for an expensive lifestyle today might find that a $2 million portfolio can't do all the work once their paychecks stop coming in.

Being 'ahead' doesn't always count as 'having enough'

Building a $2 million nest egg by age 65 puts you well ahead of most Americans.

But retirement isn't about being ahead of your peers. It's about having enough to support your lifestyle, your bucket list goals and your legacy.

So stop asking yourself, "Do I have enough compared with everyone else?"

Instead work on answering, "What does my money need to do for me in retirement?"

Once you answer that question, you'll stop comparing your retirement with everyone else's and start building the retirement that works for you.

Related Content

• The Average Retirement Savings by Age
• The Average 401(k) Balance Hits Record High in the Second Quarter — Is Your Nest Egg Keeping Up?
• Retirement Savings On Track? How Much You Should Have By 60 and 65
• If You're Nearly 65, You Need to Know How to Avoid These 5 Common Medicare Mistakes
• Just Retired? This Could Be Your Once-in-a-Lifetime Opportunity to Lower Your Lifetime Taxes

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.

All three main equity indexes gapped down at Friday's open, as the rotation out of technology and artificial intelligence infrastructure accelerated to a frightful pace on All Hallows Eve. Investors, traders and speculators are seeking safety in energy, consumer staples and healthcare stocks, as well as Treasury bonds, amid rising concern about capex plans and return on AI.

By the closing bell, the Nasdaq Composite had fallen 2.9% to 25,437, the tech-heavy index's steepest single-day decline since March 2025, turning what had been a modest weekly gain into a 2% weekly loss.

The broad-based S&P 500 was off 1.8% at 7,580, resulting in a 0.6% decline for the week. The blue-chip Dow Jones Industrial Average was down 1.1% today to 51,770. Papa Dow dipped 0.9% this week.

"Mega-cap stocks have faced increased selling pressure over the past two weeks as elevated AI-related spending and rising financing costs raise concerns over the path to profitability," LPL Financial Chief Cross-Asset Strategist Adam Turnquist observes. "Recent earnings reports have added to these concerns, revealing slowing growth in select hyperscalers' core businesses."

Alphabet (GOOGL, -1.4%) reported its weakest ad revenue growth in five quarters, while e-commerce sales for Amazon (AMZN, -1.4%) slowed to a three-year low. But Microsoft (MSFT, -1.6%) reported a nice pop for cloud revenue, including expectations-beating Azure sales.

Still, according to Turnquist, the Magnificent 7 stocks are showing signs of weakness from a technical perspective.

Indeed, the Magnificent Seven Index has broken below support near its May highs and is approaching another key level. Relative strength "is also at a critical inflection point," with more deterioration from here suggesting leadership "is rotating away from mega-cap stocks."

The wider technology complex was also destabilized on Friday by a reported $6.3 billion hack of cryptocurrency exchange Binance engineered by agents of North Korea's government.

Intel is way outside

Intel (INTC, -28.6%) was the worst S&P 500 stock on Friday after management reported mixed results and offered weak guidance, amid a more-rapid-than-anticipated deceleration for its core PC market.

The chipmaker expects to report earnings of 25 cents per share for the fourth quarter on revenue of $15 billion to $16 billion. Wall Street forecast EPS of 45 cents on revenue of $17.3 billion.

Other semiconductor stocks got dragged down, too, including Advanced Micro Devices (AMD, -10.9%), which is scheduled to report third-quarter earnings after the closing bell on Tuesday.

Nvidia (NVDA, -4.2%) was the worst Dow Jones stock. Fellow Mag 7ers Meta Platforms (META, -1.5%) and Tesla (TSLA, -0.9%) looked better by comparison.

Apple (AAPL, -1.2%) will be the sixth Magnificent 7 stock to report this season when it reveals fiscal fourth-quarter results after Monday's closing bell.

As Turnquist explains, AAPL outperformed this month because the iPhone maker is "more asset-light compared to peers" and is still generating strong positive free cash flow.

Crude oil up, bond yields down

The front-month West Texas Intermediate crude oil futures contract rose 2.4% to $104.45 per barrel, and Brent futures added 1.5% to $112.44, reflecting expectations the war in the Middle East will intensify after midterm elections in the U.S.

The 2-year Treasury yield (-6.4 basis points, 4.592%), as well as the 10-year (-5.8 bps, 4.931%) and the 30-year (-1.9 bps, 5.31%), declined as investors bid up bond prices in their search for safety.

Meanwhile, the Bureau of Labor Statistics (BLS) will share its October update on the employment situation before the opening bell next Friday. Markets expect the data to reflect continuing stability.

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, even after a cooler-than-expected September jobs report, the Federal Open Market Committee (FOMC) remains focused on the inflation problem.

That includes Cleveland Fed President Beth Hammack, who dissented from the decision to hold interest rates steady at the October Fed meeting and promises to generate economic calendar sparks next Thursday.

Note that the Treasury Department announced an I-bond rate of 5.51%, which is fixed for the six months through April 30, 2027, and looks even more attractive after today's price action.

What is it about Berkshire Hathaway?

Berkshire Hathaway (BRK.B, +0.3%), because of what's inside Warren Buffett's and Greg Abel's portfolio, is a lot like an equity index fund. It's actually the biggest financial stock in the S&P 500.

But Berkshire's holdings include American Express (AXP, -1.4%) and Bank of America (BAC, -2.2%), as well as Apple, which remains the biggest holding, and Alphabet, which will go down as Buffett's last major equity buy.

It also includes consumer staples such as Coca-Cola (KO, +1.4%), energy stocks such as Chevron (CVX, +1.7%) and industrials such as Delta Air Lines (DAL, -1.8%).

Today, the blue chip stock traded like a safe haven. Next Saturday, Abel's team will report quarterly earnings for the first time since Buffett's retirement as chairman of the board in September.

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I frequently have to remind myself of the old parental axiom "it's not bad, it's just different" whenever I think about rising-rate environments.

You can always catch a little funk in someone's voice when they discuss Federal Reserve interest-rate hikes. That's in part because stocks often throw short-term tantrums in response to climbing rates. Not to mention, rising rates make mortgages, auto loans, credit cards and other lending products — and thus the goods they're used to purchase — more expensive.

Yet there's a wealth of data that shows stocks can be plenty productive no matter rates' direction. While Fed cuts help ease lending costs for corporations and help spark big-ticket consumer spending, hikes are often a response to a hot economy in which demand is usually expanding and corporate earnings are usually rising.

Still, going back to what I said originally, a rising-rate environment might not necessarily be bad, but it's certainly different than a period of flat or declining rates … and for some investors, that might prompt a little tweaking to their playbook. With that in mind, let's discuss a few exchange-traded funds that make sense during periods of rising rates.

Rising rates … and nothing else

You'll frequently hear that no two bear markets are perfectly alike. While there are a variety of investments that have provided defense and even positive performance during market downturns, they don't always act the same way because a bear market driven by, say, a financial crisis might affect sectors differently than one sparked by a tech-bubble collapse.

The same goes for rate environments. The Federal Reserve literally has a "dual mandate" for both inflation and employment. That means two entirely different inputs can hold enormous sway on its monetary-policy decisions. Consider this from Kiplinger's David Payne, describing the circumstances around the Fed's September 16 hike, its first in more than three years:

"Chairman Kevin Warsh's tough inflation talk at his press conference boosted long rates above 5.0%. Bond investors likely interpreted his words as a promise to raise rates more than they had expected over the next year. … The September 16 Fed policy meeting did tell us one thing about Warsh: That he has settled on conventional rate increases as his primary means of fighting inflation."

I say that to say this: If September was more than just a one-off, and we're in for a period of rising rates, how different parts of the market respond might be different than in the past. There's simply no way of knowing.

Instead, the best we can do is consider rising interest rates in terms of their most direct effects, then look for investment products that are shielded from these mechanics … or actually benefit from them.

Data is as of October 29. Dividend yields represent the trailing 12-month yield, a standard measure for equity funds. SEC yields reflect the interest earned for the most recent 30-day period after deducting fund expenses, a standard measure for bond funds. Seven-day SEC yields reflect the interest earned after deducting fund expenses for the most recent seven-day period, a standard measure for money market funds.

Vanguard 0-3 Month Treasury Bill ETF

• Type: Ultra-short bond
• Assets under management: $14.3 billion
• SEC yield: 3.7%
• Expenses: 0.06%, or $6 on every $10,000 invested annually

We'll start with bond ETFs, but first, a bond primer:

Bond yields and bond prices move in opposite directions. If interest rates rise, the yields on existing bonds look less attractive compared with new issues, prompting investors to sell. If rates fall, the higher yields on existing issues look more attractive and draw buyers' interest.

However, that effect isn't felt equally across the bond spectrum. An investor might not be so quick to jump ship for a higher yield if both their old bond and the new bond have, say, just one year's worth of coupon payments to make before they expire. But that switch will look a lot sweeter if those bonds don't mature for another 20 years.

Summed up: The shorter a bond's maturity, the less its interest-rate risk.

That's why investors who want to collect bond income but want to hedge against future Fed hikes often gravitate toward ultra-short bond funds such as the Vanguard 0-3 Month Treasury Bill ETF (VBIL). This dirt-cheap Vanguard index fund currently owns 25 T-Bills with maturities between zero and three months. U.S. Treasury debt is among the best-rated debt on the planet.

This mix of sky-high credit quality and uber-short maturity translates into a duration of just 0.1 years, which implies that a 1-percentage-point rise in market interest rates would result in a mere 0.1% decline in VBIL's net asset value (NAV), and vice versa. But while it's very difficult for this bond fund to lose value, it also pays nearly 3.7% right now, meaning investors can come out ahead even in the face of future rate hikes.

The iShares 0-3 Month Treasury Bond ETF (SGOV) is often called out to fill this need because it has roughly 10 times the assets. But VBIL's annual expenses are 3 basis points cheaper; it's not an enormous difference, but when you're dealing with the thin returns of ultra-short bond ETFs, it's still meaningful.

Learn more about VBIL at the Vanguard provider site.

VanEck IG Floating Rate ETF

• Type: Ultra-short floating-rate bond
• Assets under management: $3.7 billion
• SEC yield: 4.4%
• Expenses: 0.14%

A traditional bond pays a fixed coupon that is set when the bond is issued. The yield you receive depends on the price at which you bought it, but the coupon itself generally doesn't budge.

But floating-rate bonds pay a coupon that's based on a short-term benchmark — nowadays, that's usually the Secured Overnight Financing Rate (SOFR) — plus a fixed credit spread. When the benchmark rate goes up, the coupon increases; when it goes down, the coupon decreases.

You can own these securities via the indexed VanEck IG Floating Rate ETF (FLTR), which invests in roughly 450 investment-grade corporate debt issues with an average maturity of a little more than three years.

That's considerably longer than Vanguard 0-3 Month Treasury Bill's average maturity. However, because FLTR's components are floating rate, they have a similarly almost nonexistent duration of 0.13 years. For that marginally higher risk and just 8 more basis points in annual expenses, we get about 50 more basis points in yield … making this an ETF that should do just fine in a rising-rate environment.

The flip side is that you won't get as much out of FLTR as you would from similarly built traditional bonds in the event that interest rates decline.

Learn more about FLTR at the VanEck provider site.

iShares Prime Money Market ETF

• Type: Money market
• Assets under management: $797.1 million
• 7-day SEC yield: 3.9%
• Expenses: 0.20%

Money market funds own low-risk, short-term debt like T-bills, commercial paper and certificates of deposit (CDs). They're the ultimate volatility hedge, quite literally designed to remain at a $1 NAV.

There's no price upside in money-market funds, but you collect income — and when benchmark yields go up, the new debt they eventually buy will pay more, too.

Money market funds have historically been the realm of mutual funds, but in early 2025, BlackRock's (BLK) iShares division launched one in an exchange-traded wrapper.

The iShares Prime Money Market (PMMF) owns U.S. government agency repurchase agreements (repos), CDs, asset-backed commercial paper and other short-term debt with an average maturity of just about 40 days.

It's not a perfect facsimile of the traditional MMF, but it's mighty close. Rather than trading at $1, PMMF typically trades at little more than $100. During its first year or so, its prices ranged from $100.04 to $101.40 — a band of about 1%. But since about April 2026, its band has tightened to between $100.23 and $100.37, which is a much thinner 0.14% spread and a negligible amount of volatility. Meanwhile, you can collect almost 4% at today's prices.

Unlike a mutual fund, there's no required minimum investment threshold. If you can afford a single share — or less, if your brokerage offers fractional shares — you're in.

Learn more about PMMF at the iShares provider site.

State Street SPDR S&P Regional Banking ETF

• Type: Regional bank stock
• Assets under management: $4.0 billion
• Dividend yield: 2.3%
• Expenses: 0.35%

Bonds aren't the only option for leveraging higher interest rates. You can make hay with a few areas of the stock market, too.

Financial stocks and bank ETFs are popular choices when interest rates are on the rise. Banks, after all, make much of their income from the spread between the interest they charge on products such as mortgages and auto loans, and what they pay to depositors via savings and other accounts. This is called the net interest margin, or NIM.

When rates rise, a bank will offer higher yields on savings and money market accounts, but they'll typically boost what they charge on loans by even more, further boosting their NIM.

That's the logic behind owning funds such as the State Street SPDR S&P Regional Banking ETF (KRE), an index fund that owns predominantly mid- and small-cap regional banks. Holdings include the likes of Montana-based Glacier Bancorp (GBCI), New Jersey's Valley National Bancorp (VLY) and online banking specialist Axos Financial (AX).

Why regionals? Local banks largely stick to many of the rate-tied business lines I mentioned above, whereas Big Four banks and super-regionals tend to have additional businesses such as trading desks and global wealth management that aren't as directly tethered to interest rates.

Unlike bonds, regionals provide both a decent amount of income (more than 2% in yield as I write this), as well as the much more significant upside potential that comes with owning equities.

Even then, there are risks to using regional banks as a rate play. Too-aggressive hiking can depress lending activity. Competitive environments for customer deposits can depress banks' margins.

Learn more about KRE at the State Street Investment Management provider site.

Simplify Interest Rate Hedge ETF

• Type: Trading
• Assets under management: $256.3 million
• Dividend yield: 1.9%
• Expenses: 0.50%

If you're tired of all this subtlety, you're probably ready to hear about the Simplify Interest Rate Hedge ETF (PFIX).

This is a complex trading fund that uses over-the-counter derivatives to create performance similar to what you'd get by owning long-dated put options on 20-year U.S. Treasuries. (Buying a put option is a wager that the underlying asset's price will decline.)

Note that I said "20-year U.S. Treasuries." While the other four ETFs I mentioned are primarily influenced by shorter-term rate moves, PFIX is a hedge against rising long-term rates. Yes, the Fed's rate policy can eventually bleed down to longer-term debt, but many other factors — inflation expectations, economic growth, Fed balance-sheet actions such as quantitative easing/tightening — exert influence, too.

Still, Simplify's ETF is effective at what it does. The 20-year Treasury's rate has bubbled up from about 4.8% at the start of the year to 5.3% recently. PFIX has delivered a 21% total return (price plus dividends) during that time, outdoing the S&P 500.

Learn more about PFIX at the Simplify provider site.

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If you run a small business or work for yourself, you may be preparing for Affordable Care Act (ACA) marketplace open enrollment this fall. Business owners and the self-employed account for roughly 28% of working-age marketplace enrollment.

Most people in this position are also their own benefits department. There is no HR team to walk through the options during open enrollment, and no enrollment specialist to follow up with.

That's worth keeping in mind this year in particular, because eligibility rules changed in a way that affects the plans this group buys most, and the change is easy to miss.

What changed

Starting in 2026, enrollment in a Bronze or Catastrophic plan through the ACA marketplace makes an individual eligible to contribute to a health savings account (HSA). That's true even for Bronze or Catastrophic plans that don't meet the IRS definition of a high-deductible health plan (HDHP), which was previously the only avenue to funding an HSA.

More than seven million people fall into this newly eligible category, making it the largest expansion of access to HSAs to date.

The newly eligible group is also growing. For 2026 coverage, nearly 9.2 million marketplace enrollees selected Bronze plans — nearly 40%, up from roughly 30% the year before — as many buyers moved to the lowest-premium tier when enhanced federal premium subsidies expired.

How an HSA can help your finances

First, the limitation: An HSA can't be used to pay insurance premiums, which many Bronze-plan enrollees saw increase substantially this year with the end of the enhanced ACA subsidies. If premiums are where your budget hurts most, an HSA does not address that directly.

What an HSA can do is reduce the after-tax cost of the healthcare you pay for out of pocket. If you chose a Bronze plan, out-of-pocket costs are precisely the trade-off you accepted: A lower premium in exchange for a higher deductible.

An HSA is built for that structure. No other type of account, whether for spending or investing or both, offers the combination of:

• In most states, no taxes on funds added to the account
• No taxes on growth within the account (whether bank interest or investment returns)
• No taxes on withdrawals from the account, so long as funds are used for qualified healthcare expenses

Here is a simplified example for someone who pays income tax. Say you add $1,000 to your HSA for the 2027 calendar year, and this $1,000 is part of your overall income that would otherwise be subject to income tax. When you use that $1,000 to pay for healthcare expenses, you have the full $1,000 available.

Contrast that with paying a $1,000 healthcare bill from ordinary funds. In that case, you would have needed to earn more — say, $1,100 or $1,200, depending on your tax rate — to pay the same bill. You are functionally reducing your healthcare expenses by $100 or $200. For someone who is self-employed, that difference comes straight out of the income the business generates.

There is also no "use it or lose it" provision with HSAs. The balance in your HSA can grow year over year, which is why the tax-free growth can become more significant over multiple years of contributions.

Open enrollment elections

Open enrollment for 2027 marketplace coverage runs November 1 through December 15 in most states — a shorter window than in past years. If you are shopping for Bronze and Catastrophic plans, the plan information will note that HSAs are permitted.

However, insurers generally don't promote that fact, and most state and federal exchange sites are only beginning to incorporate HSA guidance. For those buying coverage on their own, knowing the option exists is the first step.

Putting an HSA to work

You can open and set up an account with a qualified custodian, typically a bank. In 2027, the maximum contribution is $4,500 for individuals and $9,000 for those with family coverage, plus an extra $1,000 if you are 55 or older.

If you contribute on your own, you report those contributions when you file your taxes, and the amount nets off your income — reducing taxes due or increasing your refund.

Balances can be spent on qualified medical expenses for you and your covered dependents, including telehealth services and — new this year — fees for direct primary care arrangements, up to an IRS monthly limit.

Be sure to keep your receipts because you can reimburse yourself for a qualified expense even years after incurring it, allowing the account to grow tax-free in the meantime.

With steady contributions, you may eventually build a balance larger than your plan's annual out-of-pocket maximum. At that point, you may want to consider shifting some of your HSA into investments with the potential to grow faster than bank interest.

The process is similar to making choices within a 401(k) plan, subject to your custodian's options and minimums.

For a business owner or self-employed professional without access to a workplace retirement plan's full toolkit, an HSA used this way becomes a second tax-advantaged savings channel that's specifically matched to a category of expense that tends to grow later in life.

Healthcare costs are a fact of running your own working life. For the millions who became HSA-eligible this year, the account won't solve the premium problem, but it is a durable tool for the costs that come after the premium. This open enrollment season is the natural time to put it to work.

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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.

Few career moves in wealth management generate as much excitement, or as much deliberation, as going independent. Yet advisers keep making the leap, and the data suggests most are glad they did.

The shift isn't a passing trend. Over the past decade, the number of advisers working at independent RIA firms grew at a compound annual rate of 5.2%, according to Cerulli, while other channels stayed flat or shrank.

Freedom is the draw, but it isn't free

When we asked advisers in Betterment's 2024 Advisor Survey why they went independent, 59% pointed to business freedom as their top reason, ahead of personal freedom (51%), access to better technology (44%) and earning potential (43%).

That tracks with what we hear every day. Advisers want to run their practice their way and choose the tools and investments that fit their clients best.

But freedom comes with a new set of responsibilities. On top of giving advice, a breakaway adviser now has to build a brand from scratch, stand up compliance, pick a tech stack and manage every piece of business operations without the infrastructure a larger firm provides.

The first year won't be easy, and many decisions made in the early months will shape the business for years to come.

The good news is that most of the missteps that slow new firms down are avoidable. Here are three we see most often, and how to sidestep them.

1. Skipping the legal review

In the rush to get started, it can be tempting to focus on your new firm before fully understanding your obligations to the firm you are leaving. Questions about client information, outreach and employment restrictions deserve attention before you set a resignation date.

What to do instead: Hire an attorney to review your employment agreement, noncompete and non-solicit terms, and broker protocol status before you resign. Keep your resignation letter short and professional, and don't tell clients your plans until after you've officially resigned.

A compliance consultant can also be worth the investment here, since one small misstep can delay a launch by months and/or result in fines.

2. Underpreparing for client conversations

While reasons for going independent may be clear to you, your clients need to understand what the decision means for them and their money. Advisers often overestimate how hard it will be to bring clients along to their independent practice, and that anxiety can lead to one of two mistakes: Winging the conversation or over-engineering it.

What to do instead: Plan your announcement around what independence means for clients, whether that's better service, stronger technology, transparent fees or a fiduciary commitment.

Anticipate the questions you'll get:

• Why are you leaving?
• How will my accounts transfer?
• Will my investments change?
• How long will it take?

Have clear, confident answers ready, and choose the format that fits each relationship, from an email to a phone call or a face-to-face meeting. Then trust the relationships you've built. Your clients chose you once, and most will choose you again.

3. Trying to manage everything yourself

Launching a new firm involves many moving parts: Selecting technology, establishing workflows, preparing paperwork, coordinating transfers and keeping clients informed. That's a recipe for burnout and a fragmented tech stack, which, according to InvestmentNews, more than half of advisers already cite as their biggest technology pain point.

What to do instead: Treat your custodian as a partner, not just a place to hold assets. The right custodial relationship can provide a dedicated transition team, communication templates, digital onboarding, automated account transfers and real-time tracking of where each client stands.

When evaluating options, ask direct questions:

• Who will support my transition?
• How long will it take?
• What help is available after launch, and is any of it restricted to larger firms?

The degree of human and technology support you can receive will make a significant difference in how heavy that first year feels.

Build the right team around you

A common thread runs through all three potential pitfalls: Going independent doesn't mean going it alone. Legal counsel, tax advisers, compliance experts, peers who have made the move before you and a custodian invested in your success can all take real weight off your plate. That frees you to focus on what you set out to do in the first place, which is serving clients better.

Independence offers the chance to build the business you've always envisioned, serve clients without conflicts and create lasting value. With the right preparation and the right people by your side, the challenges of year one can become the foundation for all the success that follows.

There's no sugarcoating it: Launching your own firm takes grit, planning and a tolerance for a demanding first year. But the advisers who've done it overwhelmingly say they would do it again.

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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.