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

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

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

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

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

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

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

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

That may be the organization's superpower.

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

The accessibility problem

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

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

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

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

This distinction is important.

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

The Garrett difference

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

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

The practical impact of this policy cannot be overstated.

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

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

Advice when you need it

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

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

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

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

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

Finding the needle in the haystack

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

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

By contrast, professional financial planners focus on providing advice.

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

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

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

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

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

How to find a Garrett planner

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

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

The bottom line

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

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

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

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

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

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

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

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

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

What makes Medicare so different

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

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

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

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

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

Mistake No. 1: Assuming Medicare is automatic

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Medicare Part D helps cover the cost of prescription drugs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related Content

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

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

You probably know that money is taken out of your paycheck to help fund the Social Security program. But did you know there's a limit on how much of your income is subject to the tax? That threshold is rising in 2027, which means higher-paid workers could see more money withheld from their paychecks next year.

The Social Security Administration (SSA) just announced a new wage base for 2027 (roughly 4.2% higher than the 2026 tax limit), along with the annual cost-of-living adjustment (COLA) for more than 70 million Social Security recipients.

The new 3.6% COLA will boost monthly checks for beneficiaries, while the wage base determines how much of a worker's income is subject to Social Security payroll taxes.

Also worth noting: These updated numbers come as some lawmakers weigh proposals to shore up Social Security — including whether to eliminate the Social Security tax cap. Here's more to know.

New 2027 Social Security payroll tax limit

Every year, the SSA sets a limit on how much of your earnings can be taxed for Social Security. Any money you earn above this limit — also called the tax cap or wage base — isn't taxed and doesn't count toward your future retirement benefits. This limit usually goes up each year based on average wage changes across the country.

For 2027, the tax limit is $192,300, up about 4.23% from $184,500 for 2026.

High Earners: If you're at or above the taxable limit, you will pay the 6.2% tax on more of your income.

• The maximum tax an employee will pay in 2027 is $11,922.60, up from $11,439 for 2026.
• The taxable wage base is increasing by $7,800.
• So, an employee earning at least $192,300 will pay an additional $483.60 in Social Security taxes in 2027 (i.e., 6.2% of $7,800).

Other Workers: If your income is below the taxable limit, all of your income is already subject to Social Security tax.

Note: The wage base also matters for future benefits. Social Security uses a worker's earnings history to calculate retirement benefits, generally based on the highest 35 years of indexed earnings. Earnings above the annual cap don't count toward that calculation.

How much Social Security is taken from a paycheck

Employees pay 6.2% of covered wages toward Social Security, and employers pay another 6.2%. The combined rate is 12.4%. Self-employed workers generally pay both portions, for a combined rate of 12.4% on net earnings up to the annual wage base.

Self-employed individuals can generally deduct the employer-equivalent portion of their self-employment tax when calculating adjusted gross income (AGI).

It's also important to distinguish Social Security taxes from Medicare taxes.

• Medicare payroll taxes don't have the same wage cap.
• Employees generally pay 1.45% in Medicare taxes on all covered wages, and employers pay another 1.45%.
• Higher-income workers may also owe an additional 0.9% Medicare tax on wages above $200,000 for single filers and $250,000 for married couples filing jointly.
• Those thresholds are separate from the Social Security wage base.

Will the Social Security tax cap be eliminated soon?

As Kipliner has reported, Sens. Elizabeth Warren, D-Mass., and Bernie Moreno, R-Ohio, are calling for the elimination of the Social Security payroll tax cap. The proposal would require people with higher wages to pay Social Security taxes on more of what they earn.

If the tax cap were eliminated and assuming the 2026 limit, a worker earning $1 million, for example, would have another $815,500 of wages subject to the Social Security tax.

At the current 6.2% payroll tax rate, that would be about $50,561 more in Social Security taxes for the employee. The employer would generally owe another $50,561.

Warren and Moreno say the additional revenue could help protect Social Security benefits without raising the payroll tax rate for most workers (i.e., those whose wages remain below the taxable maximum).

But changing the Social Security tax cap would be more complicated than simply asking high earners to pay more taxes. Key questions Congress would have to address include how to change the cap and whether additional taxes would increase Social Security benefits for high earners.

• As mentioned, Social Security benefits are based in part on a worker's earnings history, and under current law, earnings above the existing cap don't count toward benefit calculations.
• Ultimately, the financial effect of eliminating the cap would depend partly on whether and how those additional earnings would be credited toward benefits.

For now, there's no major legislative change involving the tax limit, except for the just-announced annual adjustment.

Still, the debate surrounding Social Security taxes comes as the Social Security program faces a long-term funding shortfall. According to the 2026 Social Security Trustees Report, the retirement and survivors trust fund is projected to be depleted in late 2032 if Congress doesn't act.

At that point, continuing revenue would pay 78% of scheduled benefits. That could mean a 22% cut in benefits across the board. Stay tuned.

Related

• What Eliminating the Social Security Tax Cap Would Mean for High Earners
• Midterm Election Tax Measures Target High-Income: What to Know
• Federal Income Tax Brackets and Marginal Tax Rates for 2026

We retired last year at 65 with $1.1 million, and our $6K monthly Social Security covers most of our expenses. I want to spend $80K on a pool so it's more fun for the grandkids to visit. My husband says it's a waste and we can't afford it. Who's right?

When you have grandchildren, your mindset tends to shift. Things you never would’ve spent money on for yourself, or even your own kids, are suddenly purchases you’re willing to seriously contemplate.

Here, we have the example of a couple who can’t agree on whether a pool is a sound investment. With $1.1 million saved and an estimated cost of $80,000, a pool would eat up a little under 7.5% of their portfolio.

Is that too much to spend? Let’s see what our experts have to say.

The actual math probably works

Spending your entire retirement nest egg on a pool probably isn’t wise. Spending a portion of it is a different story.

Derilyn Freeman, a financial planner with Prudential Wealth Advisors, says, "If you were my client, I would tell you the question at hand is: 'Can you buy an $80,000 pool without it negatively affecting your retirement plans?'"

If the answer is "yes," then that answers the math problem.

Since our couple covers most of their expenses with Social Security, they’re probably withdrawing minimally from their savings. So the question is, what sort of pressure does the pool place on their nest egg going forward?

"Let’s assume you withdraw the $80,000 for the pool, so now you have $1,020,000 left," says Freeman. "Let’s also assume you need an additional $1,500 per month for maintenance. That’s $18,000 per year, or about 2% that you’re withdrawing from your $1,020,000 in savings annually."

Freeman says high-yield savings accounts and CDs are paying 3% or more these days, which means even if all of your money was in savings and/or CDs, you could still see your account grow annually after withdrawing $18,000 for pool maintenance (assuming taxes and inflation don't outpace your conservative yields). And while these rates probably won’t stick around forever, you can shift into other stable assets, like bonds, that could offer comparable returns.

"This tells me that you can afford a pool for $80,000 without it negatively impacting your retirement," she says.

To argue that case even more, pool rental marketplace Swimply puts the average annual cost of owning a pool at $3,000 to $6,000. If you’ll be outsourcing everything, you might need to estimate at the higher end of that range. But that’s well below Freeman’s much higher number, which may be more relevant to upscale pools.

So clearly, the math works. But another issue may be whether your husband can part with the money mentally.

"You and your husband are not alone in struggling to spend for enjoyment in retirement," Freeman says.

Prudential just released a survey on retiree spending confidence, and it found that most respondents feel guilty spending their savings on things they enjoy. Your husband’s pushback may stem more from fear or guilt than from worries about the math.

It's also possible that your husband just doesn't want a pool as much as you do. If so, you'll need to find ways to compromise. For example, you could opt for a cheaper above-ground pool that, with a custom deck, can be attractive. If your grandchildren are older and you live in a colder climate, they may be just as happy with an outdoor hot tub for winter chats and cold plunges in the summer.

Is a pool the best way to spend your "fun bucket" savings?

With the math problem out of the way, Freeman says the next thing to focus on is whether a swimming pool aligns with your values and priorities.

"Think of your savings as a tool that you can use to build a life that reflects what matters most to both you and your husband," she says. "To me, this purchase reflects a priority on spending quality time with family and creating fun for the grandkids."

In other words, is a pool the best use of money you've set aside for family fun and bonding?

Freeman says, "There are other ways you could prioritize quality time with your grandkids, too, that do not include purchasing a pool."

If maintaining a pool, or making sure young children don't fall in it, feels overwhelming, you could put some of that money toward more flexible uses. For example, you could fund annual family vacations or cruises, stays at upscale national park lodges, or even an RV so you can visit the grandkids.

Also, just because you can afford pool maintenance doesn’t mean you want to deal with it. And you should also know that, from a resale-value standpoint, a pool isn't necessarily a smart investment. You'll need to weigh additional swimming pool issues such as higher home insurance costs, safety fencing and energy bills for heated pools.

As Steve Azoury, a Chartered Financial Consultant and owner of Azoury Financial, explains, "The $80,000 pool cost could be a good investment if it adds value to your home. However, sometimes pools in certain areas make homes harder to sell and can actually decrease a home’s value."

Geography could play a role in your decision. If you live in an area where you can use a pool year-round, it could be a smart purchase. But if you’re in a part of the country where the swimming season is only three months long, a pool may not be worth it. And it won’t solve the problem of what to do with your grandkids for the majority of the year when they visit.

That’s why Azoury, like Freeman, says you should think about what you really want. If the goal is to get your grandkids to come over more often, you can find other activities to entertain them that could do the job at a fraction of the cost, without forcing you to maintain a feature you don’t otherwise use much.

But if you both decide a swimming pool is the backdrop you want for your family’s memories, go for it. You’ve earned it.

Read More

• 9 Upgrades That Transform Your Family Home Into a Retirement Oasis
• In-Ground vs. Above-Ground Pools: Which Is the Best Investment?
• We're 78 and Want to Use Our 2026 RMD to Treat Our Kids and Grandkids to a Vacation. How Should We Approach This?
• Our Children Want Us to Take Care of the Grandkids This Summer at Our Lake House. How Do We Say No?

AI became a larger part of our ordinary lives quickly.

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

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

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

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

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

The chatbot doesn't know:

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

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

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

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

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

Where AI helps

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

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

Other ways it can help include:

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

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

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

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

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

What's next

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

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

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

Related Content

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• If AI Is Doing More of the Work, What Are You Paying Your Financial Adviser For?
• More of Us Are Using AI for Financial Advice: Here's Where I'd Draw the Line
• AI Can Build a Budget, But Does It Know the Person Behind It? Why Your Financial Plan Will Benefit From the Human Touch
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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.

"Perhaps it takes courage to raise children," John Steinbeck wrote in 1952's East of Eden. The American classic has a lot to say about parenting — and a lot to say about how money can twist relationships within families, despite good intentions.

Without giving away spoilers, I'll just say that East of Eden is ultimately a story about what we do and do not inherit from our parents. Because of that, with a new adaptation of the Cain-and-Abel tale now available to stream on Netflix, we partnered with our sister site CinemaBlend to ask some cast members about handling inheritances.

CinemaBlend sat down with actors Hoon Lee, Joseph Zada and Joe Anders. The latter two play brothers Cal and Aron, the younger generation of the story. Where Aron (Anders) is kind and trusting, Cal (Zada) is scheming and suspicious. To put it another way, a Kiplinger-Morning Consult survey found that 33% of adult children expect an inheritance will create conflict with their siblings: Cal and Aron are the types of squabbling siblings trusts and professional executors were created for in estate planning.

CinemaBlend asked Anders and Zada what they think would've happened if their characters' parents passed their businesses down to the brothers to run.

"I think I would've killed that," Zada said, in characteristically Cal fashion.

Turning to his onscreen brother, he said, "I don't know about you, dude. You're a little all over the place. I think you really wouldn't have done very well. You would've thought that you would've done great."

"Aron would've been totally convinced he was doing amazingly," Anders agreed. "And then I think he would've had a wake-up call at some point."

The 'wake-up call' of inheritance

There's a lot of confidence when it comes to inheritance. Our survey found that 70% of adult children feel confident in their ability to manage an inheritance.

But expectations and confidence don't always align with reality. Eight percent of adult children said they believe their parents' estate includes business assets — but only 2% of parents said business assets were in their estate. On the flip side, 54% of parents said real estate, including their home, is part of their estate — but only 32% of the younger generation said the same. These differences demonstrate the lack of understanding adult children have about what they may inherit, and those surprises could lead to, as Anders put it, shocking "wake-up calls" about how prepared you actually are.

"Confidence and competence are different things," Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth®, told me in our Kiplinger Conversation about inheritance. That's why it's important for parents to have open and honest conversations about their estate with their children (although, well, Aron and Cal may not have wanted to hear all about it from their mother).

By having these conversations, and especially by having these conversations throughout life stages from a young age, parents can better ensure that their legacy won't be squandered by overconfident and underprepared children. They can help their children know what to be ready for and how to manage certain money challenges.

When we asked adult children in our survey what they'd want to use an expected inheritance for, one respondent said, "I hope to use it to get a nice family business going for our future generations."

It's a lofty idea to start a business you hope to be a family legacy, but as each generation steps up with their own hopes, dreams and, let's face it, faults, it's not a given that even a successful business will survive a second generation. It's often not enough to simply build an estate; you also have to educate your children to be capable of managing it.

Because while it may seem like a gift to leave an inheritance, East of Eden is a prime example of how it can all go terribly wrong.

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The Social Security cost-of-living adjustment (COLA) for 2027 will be 3.6%, the Social Security Administration (SSA) announced Wednesday. The increase matches Kiplinger staff economist David Payne's final estimate of 3.6%, follows a 2.8% boost in 2026, and sits near the long-term historical average of 3.8% since automatic COLAs began in 1975.

According to the SSA fact sheet, the 3.6% increase will translate to an additional $75 per month for the average retiree. In January 2027, the average payment will be $2,170, up from the pre-COLA amount of $2,095. Married couples will see an average increase of $117, raising the average monthly benefit for couples to $3,355 from $3,238.

The 2027 COLA in context

The 3.6% COLA is 0.8% more than the 2.8% increase in 2026 and is close to the historical average of 3.8%.

Payne, economist for The Kiplinger Letter, was right on the mark and projected a 3.6% COLA, arguing that "high energy prices bleed into other categories." September's inflation numbers supported his conclusion. The Bureau of Labor noted in its press release that "the index for gasoline rose 9.1% in September, accounting for over half of the monthly all items increase" and that "the energy index increased 5.2% over the month."

Will this increase help retirees? "Retirees shouldn’t interpret a higher COLA as having more spending money. If their benefit rises 3% or 4%, it is because the prices used to calculate the adjustment have risen, as well. The objective is preservation of purchasing power, not an increase in purchasing power," Martha Shedden, co-founder of the National Association of Registered Social Security Analysts (RSSA), told Kiplinger.

Historic COLAs. The COLA hit a low of 0.0% in 2016 during a period of price declines but surged to 8.7% in 2023 when pandemic-fueled inflation peaked. The biggest COLA increase was 14.3% in 1980. That was also the same year the U.S. prime rate reached a record high of 21.50% on December 19, 1980.

Below are the three lowest and highest COLAs beneficiaries have received since the formula was implemented in 1975.

Earnings test when you receive benefits while working

Earned income can cost you if you continue to work after claiming Social Security benefits before your full retirement age (FRA). How? The Social Security earnings test for annual income is applied to your gross wages and reduces your monthly benefit. Bonuses, commissions and vacation pay also count as income for the earnings test.

The SSA does not count:

• Other government benefits
• Distributions from tax-deferred accounts, such as 401(k) or tax-exempt accounts, including Roth IRAs
• Investment earnings, including interest, dividends and capital gains
• Pension benefits, including Social Security benefits
• Payments from annuities.

How much SSA withholds. The SSA temporarily withholds $1 of your benefits for every $2 earned above $25,560 or $2,130 per month for 2027. This is an annual increase of $1,080 from $24,480 and a monthly increase of $90 from $2,040 in 2026.

In a year the worker hits FRA, the test is more generous — the worker forfeits $1 in benefits for every $3 in 2027 earnings above $67,920 or $5,660 per month. This is an increase of $2,760 and $230, respectively, over the 2026 earnings limits of $65,160 or $5,430 per month.

Social Security tax wage cap for 2027

Social Security caps the amount of income you pay taxes on and get credit for when benefits are calculated. The new Social Security tax limit is $192,300 in 2027, up $7,800 from $184,500 in 2026. The tax limit is indexed to inflation, so you can anticipate it will rise again in 2028.

How much you need to earn to qualify for Social Security credits in 2027

You must earn a minimum of 40 Social Security credits to qualify for retirement benefits, up to four credits per year. The SSA cannot pay you benefits if you don’t have enough credits.

The SSA also uses the number of credits you’ve earned to determine your eligibility for retirement or disability benefits, premium-free Medicare Part A and your family’s eligibility for survivor benefits.

To earn one credit in 2027, you must have wages and/or self-employment income of $1,970, and you must earn $7,800 to get four full credits. In 2026, you only needed to earn $1,890 to earn a credit, $80 less than what you need to earn in 2027. This amount increases annually and will rise in 2028.

How is the COLA calculated?

The Consumer Price Index (CPI-W) for Urban Wage Earners and Clerical Workers is the benchmark the SSA uses to determine the COLA, but that is a recent development. Initially, a new act of Congress was required each time benefits were increased.

However, the rapid and persistent inflation in the 1970s quickly eroded the purchasing power of fixed pensions and Social Security benefits. As a result, Congress enacted the COLA provision in the 1972 Social Security Amendments, and automatic annual COLAs began in 1975.

The COLA is now determined by the inflation observed in July, August and September in the CPI-W. The SSA calculates the percentage change between average prices in the third quarter of the current year (2026) and the third quarter of the previous year (2025).

This is the formula: (328.746 - 317.265 ) / 317.265 x 100 = 3.6%

Some proposals call for the COLA to be based on the Consumer Price Index for Americans age 62 or older (CPI-E), but they have so far failed. Proponents of using this price index argue that it reflects the costs older adults incur more accurately than the broader CPI-W. Medical expenses, an increasing burden on older adults, are weighted more heavily in the CPI-E than in the CPI-W.

However, the COLA applies not only to retirement benefits but also to disability and survivor benefits. A COLA geared toward older beneficiaries wouldn't necessarily address the needs of the other two groups.

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

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

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

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

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

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

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

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

1. Build an investment plan around your pension

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Prepare for RMDs

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

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

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

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

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

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

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

4. Consider whether Roth conversions make sense

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

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

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

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

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

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

5. Plan for the 'widow's penalty'

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

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

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

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

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

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

6. Don't overlook legacy planning

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Income annuity keeps on giving

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

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

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

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

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

It's foolproof

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

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

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

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

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

Guaranteed annuities with cash value also work

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

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

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

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

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

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

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

Tax matters

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

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

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

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

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

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

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

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

Then his Mexican pension pulled up a chair.

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

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

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

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

Five dates. Each had an argument in its favor.

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

First confirm which choices are available

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

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

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

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

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

The pension changed the question

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

"About $2,200," he said.

Carlos was single and already owned his home there.

"And how much will your Mexican pension provide?"

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

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

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

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

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

Waiting meant postponing generosity

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

For the first time, the committee went silent.

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

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

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

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

That required calculation. It also required listening.

Give the math the right assignment

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

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

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

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

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

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

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

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

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

A proposed bill could be a game changer for families with well-funded 529 plans. Sens. Ted Cruz, R-Texas, and Lisa Blunt Rochester, D-Del., are calling for an end to a current law that places a $35,000 lifetime cap on rollovers from 529 education savings plans to Roth IRAs.

Both sponsors of the bipartisan bill, dubbed the 529 Retirement Enhancement Act of 2026, say it will give parents and 529 account owners more flexibility to save and invest in a child’s future.

If passed, the bill would further reduce the uncertainty about what happens to unspent money in 529 plans, adds Paul Stanley, a wealth adviser at Arca.

"It would be a positive development," says Stanley. "One of the biggest impediments to people saving money in a 529 was the risk that the money was going to just go to waste (and be subject to taxes and penalties) if the kid didn't go to college."

While 529s are not so-called "use it or lose it" plans, if you withdraw savings for nonqualified educational purposes, the earnings portion is taxed as ordinary income plus a 10% federal penalty. Account holders, though, can retain the funds for future qualifying educational expenses or change the beneficiary to an eligible family member, such as a sibling.

However, having the ability to roll over more 529 dollars into a Roth IRA, a retirement fund that offers tax-free withdrawals, enables parents to avoid taxes and penalties to access unspent 529 savings and gives their child a jumpstart on retirement savings.

The SECURE Act 2.0, passed by Congress at the end of 2022, allows individuals to roll over $35,000 from a 529 plan into a Roth IRA. Aside from eliminating the $35,000 lifetime cap on unused funds, the proposed legislation keeps all other requirements from the 2022 law, which allows excess 529 assets to be transferred into a Roth IRA over time rather than leaving the assets stranded in 529 accounts.

"The initial SECURE Act was a really, really great idea," explains Ernie Wingard, a financial adviser at Capital Choice Financial Group. "This proposal (if passed) will make it even better."

How the new bill could boost financial flexibility

When introducing the bill, Cruz said the existing law "penalizes" families who build up savings in a 529 plan but don't use all the money because their child got a scholarship, went to a less expensive school, or chose not to attend college.

The new bill, adds Blunt Rochester, gives 529 savers other uses for the money if education plans change.

"Families should be able to preserve financial flexibility regardless of what their child's education decisions are years down the road," says Blunt Rochester.

529s are a popular educational savings tool. Funded with after-tax dollars, the money in these savings accounts grows tax-deferred. While there's no federal upfront tax deduction for contributions, some states offer deductions for in-state 529 plans, according to Fidelity Investments.

Increasingly, the dollar amounts that pile up in 529s can reach sizable numbers. Why? There's no annual federal contribution limit for 529 plans, although each state's plan sets a maximum total balance per beneficiary. For gift-tax purposes in 2026, contributions of up to $19,000 per person ($38,000 for a married couple) per 529 beneficiary qualify for the annual exclusion. What's more, in 2026 a 529 contributor can front-load 529 deposits, giving five years of annual gifts in a single year, or $95,000 per person or $190,000 for a married couple.

These huge balances can potentially result in unused dollars. The downside of using leftover 529 dollars for nonqualified educational expenses is that they are subject to income tax and a 10% federal tax penalty on any earnings associated with the distribution, according to Fidelity.

"That's where a transfer to a Roth IRA could make sense," according to a Fidelity blog post.

Four things to know about 529 to Roth IRA rollovers

Consider a few things before transferring unused 529 dollars to a Roth IRA.

1. The 529 plan in the beneficiary's name must have been open for at least 15 years prior to the rollover. The new rollover IRA must also be in the beneficiary's name.

2. The amount rolled over in any given tax year must not exceed the Roth IRA annual contribution limit applicable to the beneficiary. The Roth contribution limit for 2026 is $7,500 for those under 50. Because transfers are capped annually, moving a large 529 balance into a Roth IRA can take many years — meaning families must start the process early while the child is still working and earning income.

3. The transfer amount must come from contributions to and earnings from the 529 account at least five years prior to the transfer date.

4. The beneficiary must have earned income that equals or exceeds the amount rolled over to a Roth IRA in any given year.

Turning leftover college funds into a multimillion-dollar nest egg

Passing the bill would likely boost 529 savings plans, as parents would no longer have to worry about the downside of this savings product if their kid doesn't go to college. "It gives the 529 more power," says Wingard.

Extending the amount of time 529 savings can stay tax-deferred can add up to huge dollars for beneficiaries through compounding. Under current law, Wingard notes that a 22-year-old who rolls over the maximum $35,000 and earns a 9% annual return can watch that money double every eight years, turning it into $1.12 million by age 62.

"That’s why I think this bill is huge," says Wingard.

But eliminating the lifetime cap takes that growth potential to a whole new level, as shown in the table below.

Under the proposed bill, if that same 22-year-old has $75,000 in excess 529 plan funds, they could roll over the entire amount over 10 years. By age 62, those tax-free contributions could compound into an estimated $2.1 million nest egg.

"Financial flexibility is incredibly important," says Stanley.

Currently, families concerned about penalties for non-educational distributions from 529s are reluctant to put all college savings in a single 529 bucket.

In contrast, the new bill "allows planners to look at planning purely from the perspective of saving in the best tax-preferred way we can," says Stanley.

Will the bill pass?

Financial advisers are split on whether Congress will pass the bill. Stanley thinks the odds are low, citing high U.S. deficits and lost tax revenue. But Wingard thinks the odds are higher, as both parties would benefit from making it easier for families to save for their children's futures.

The bottom line: If the child goes to college, the money grows tax-deferred under the proposed changes. And if the child takes another route in life, the dollars keep growing tax-deferred and become a retirement nest egg.

"That’s going to give your kid a leg up in retirement," says Stanley.

Read More

• 529 Plans and College Savings: 4 Urgent Questions
• Best 529 Plans of 2026
• Grandparents' Guide to 529 Plans for College and Private School
• Roth IRA vs 529 Plan for College Savings

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

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

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

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

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

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

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

Replacing your paycheck

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

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

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

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

Creating multiple sources of income

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

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

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

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

Don't miss your window; plan early

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

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

Interest rates and opportunity

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

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

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

The bottom line: Retirement confidence comes from income security

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

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

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

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

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

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

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

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

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

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

What is a Medicaid Asset Protection Trust?

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

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

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

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

Why is this important?

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

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

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

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

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

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

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

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

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

Who should consider an MAPT?

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

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

Consult an experienced elder law attorney

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

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

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

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

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• How to Turn Your Parents' Estate Tax Exemption Into a Capital Gains Miracle
• Worried Your Estate Plan Will Unravel When One of You Passes Away? Why a QTIP Trust Can Give Married Couples Peace of Mind

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

Dear Wealth Wise: My 72-year-old wife and I are retired with a net worth of around $10 million. About $3 million is in real estate, including a rental house that provides $1,500 a month in net income and has a $180,000 mortgage. We own a home and a vacation home outright. Our investment portfolio is aggressive. We have $3.8 million in IRAs, another $850,000 in Roths and $900,000 in a generation-skipping trust of which I am the trustee. We get about $9,600 a month in Social Security, pension and annuity payments. We have $800,000 in non-tax-deferred accounts, including $150,000 in cash accounts. My philosophy is that we have enough money to never have to worry, so I’m investing for my heirs. Therefore, we’re heavily invested in mutual funds and ETFs, some of which are fairly aggressive. Is this OK?
— Legacy Builder

Dear Legacy Builder: Retirees are often encouraged to reduce portfolio risk. The logic is that when you’re tapping your portfolio for income, you don’t want to be in a position in which you have to take losses on stocks or other assets to pay the electric bill or put food on the table.

Here, we have a wealthy couple who are still investing aggressively, but for a good reason. Are they taking on too much risk? Here’s what our experts have to say.

'Risk' is all relative

A stock-heavy portfolio can be dangerous for retirees with limited income outside of it. That’s not the case here, which is why Phillip E. Battin, president and CEO of Ambassador Wealth Management, says he’s not particularly worried.

"With about $10 million in net worth and $9,600 a month in combined Social Security, pension and annuity income, they indicate their income needs are met," he says.

"There is a risk that the current renters don’t renew their current lease, or that the couple will have trouble renting the home in the future," he continues. However, it doesn’t seem as if our couple is particularly dependent on that income. They could probably unload the rental home if needed and use the proceeds to generate income another way.

As such, Battin doesn’t think our couple’s stock holdings sound too risky. However, he cautions, investing "aggressively" doesn't have to mean taking an overweight position in technology or speculative investments.

Robert Jeter, CFP and financial planner at Back Bay Financial Planning & Investments, agrees.

"I would be careful conflating 'aggressive' with asset allocation vs speculating," he says. "Higher-net-worth individuals tend to have extra confidence in deviating from simple investment strategies, costing themselves money. The best course can be to remain aggressive from an allocation standpoint, but simplify the investment strategy to reduce tracking error and tax drag."

Focus on tax efficiency

When you’re a couple with a roughly $10 million net worth who's focused on passing down a legacy, tax optimization becomes extremely important, which is why Jeter says this couple needs to allocate assets properly.

"Your most aggressive investments should be in your taxable and Roth accounts, while any conservative investments [should] be in your deferred accounts," he says.

Battin agrees. "With the assets outside the retirement accounts, they may want to consider investing those aggressively to take advantage of the step-up in cost basis upon their passing," he says.

Speaking of inheritances, Brandon M. Cox, CFP and founder at Coastline Complete Wealth, says this couple should not overlook the benefits of a Roth conversion.

"The tax brackets today may be as friendly as they will ever be for you or your heirs," he says. "I would absolutely be looking at whether it makes sense to start converting some of that IRA money to Roth."

As he explains, if either our reader or his wife outlives the other by a substantial amount of time, that IRA eventually gets taxed at the much less favorable single tax brackets.

"Then," he says, "whatever is left could go to your children, who generally will have to empty inherited traditional IRAs within 10 years. They may be taking those distributions in their 50s or 60s, right in the middle of their peak earning years, and stacking that IRA income on top of everything else they already earn."

By doing a Roth conversion, Cox explains, "you may actually have an opportunity to pay less tax on some of that money today than you, your surviving spouse, or your children will pay on it in the future."

Have a spending plan, and make sure you can handle market dips

Given our couple's net worth, it's easy to see why they say they have "enough money to never have to worry." But to figure out an appropriate investment strategy, you first need to understand their spending and emotional needs, says Chris Berkel, president and founder of AXIS Financial and an investment adviser.

"Risk tolerance, practically speaking, is made up of two components — ability and willingness to accept risk," he says. "The most common way to assess ability is through a robust financial plan, and so to help this gentleman and his wife, we really need to understand his spending goals."

As Berkel explains, if our reader and his wife spend $150,000 a year, their situation is very different than if they’re spending $400,000 a year. If their guaranteed income can’t fully support their near-term spending without using their invested assets, their ability to handle a stock market downturn might be more limited.

If our couple relies at all on their aggressive assets for near-term needs, they might want to rethink that part of their plan.

Berkel further explains that willingness to accept risk is typically "emotionally driven."

"Some people are the go-get-'em type and will gladly accept a 50% loss to maximize their longer-term gains," he says. "Other people like to be steady, and even a 10% drawdown can have them waking up in the middle of the night."

If our reader thinks he and/or his wife will struggle emotionally during market downturns, they might want to reduce at least some risk, even if they don’t need to spend the money soon and want to leave it to their heirs.

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

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More than one-third of Americans (37%) plan to make a change to their portfolio or investment strategy this year.

That's according to New York Life's Wealth Watch 2026 Midyear Outlook. It is not hard to see why. Inflation, interest rates, market volatility, the boom of generative AI and a steady run of unsettling headlines have left many investors feeling they should do something different with their money.

The instinct is understandable, but acting on it without a detailed financial plan can be costly, and your portfolio is only one part of your strategy.

Changing your portfolio can be one of the smartest moves you make, or one of the most damaging. The deciding factor is rarely the market itself. It's whether the change reflects your long-term strategy or reacts to short-term noise.

Before you rebalance or reallocate, here is how to tune out the distractions.

Know what is driving the urge

Begin by naming the pressure you feel, because the trigger for a portfolio change is not always the same as the source of financial stress. Headlines and market swings could prompt the urge to act, but our data show that day-to-day costs are weighing more heavily on many investors.

Higher costs of living topped the list of financial concerns, cited by 61% of respondents, while market volatility was named a top concern by just 15%.

In other words, many people feel the squeeze most directly through groceries, housing and gas, even if market news is what gets their attention.

That distinction counts, because pressure on your monthly budget likely calls for a change to how you spend or save, not how you invest.

Avoid two common mistakes

When people act, they tend to err in one of two directions.

The first is to overreact: Chasing last year's winners, trying to time the market or making decisions based on whatever is trending. Today, that often means turning to technology for answers.

In our survey, 13% of people said they research financial topics with generative AI. These tools can help with education, but they might not know your full financial picture, including your goals and your timelines.

The second mistake runs the other way: Doing nothing. About 29% of people told us they took no action in response to factors affecting their finances.

Paralysis and panic look different, yet they often share a root cause: the absence of a strategy.

Run every change through five lenses

Whether you manage your own investments or work with a financial adviser, test any proposed change against five questions before you act.

1. Does it serve your long-term goals? A portfolio move should ladder up to something specific, such as a retirement date, a home or a college fund. If you can't explain how a change advances a goal, treat that as a warning sign.

2. Does it match your risk tolerance? Adjusting your asset allocation — the mix of stocks, bonds and other holdings — is the change that most directly reflects your comfort with risk. Any shift should reflect how much volatility you can absorb, not how you feel this week.

3. What are the tax consequences? Taxes are an often overlooked cost of trading. Selling an appreciated asset, moving money between account types or realizing gains can trigger a bill that erases the benefit of the change. Model the after-tax outcome before you trade.

4. Are you diversified and protected? A resilient plan involves more than the assets you hold. Insurance and guaranteed income belong in the same conversation as your investments. Diversification and protection are what keep a single bad year from derailing an entire plan.

5. Will it hold up against your retirement income needs? This is where changes get personal. Any change you make today should be judged against the income you'll need to generate for decades, not against this year's return.

The case for working with a financial adviser

If this data holds one lesson, it is that the investors who feel most confident about their money are the ones who aren't going it alone. Close to a third (30%) of American adults say they don't have a strategy. Among people who work with a financial adviser, however, that figure is 5%.

That gap follows through to financial confidence: 44% of those who work with a financial adviser are very confident their retirement savings will last the rest of their lives, against 24% of adults overall.

Across nearly every measure of preparedness we track, from emergency savings to debt to retirement readiness, the advised group runs roughly one and a half times ahead of the general population.

None of this means advice does the work for you, and it doesn't mean sitting still. People who work with a financial adviser are more likely to plan portfolio changes this year, not less: 44% vs 37% of Americans overall.

That's the point. A financial adviser gives you a framework for deciding when to change course and how — based on a full picture of your financial life.

Should you make changes to your portfolio this year? Perhaps. If a change reflects your goals, your timeline and your tolerance for risk, it might be the right move.

If it reflects a headline, an app or the knot in your stomach, treat that as your signal to pause and consider talking it through with a trusted financial adviser before you act.

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

I once worked with a family in which the parents had built substantial wealth and didn't share the details with their children for decades.

Their four adult children were all successful in their own right, but they didn't discover the full financial picture until they were in their 50s and early 60s, when their parents finally brought everyone together with an attorney and a financial adviser to review their estate plan.

This isn't an uncommon issue. According to Kiplinger's Trillion Dollar Talk survey, conducted by Morning Consult, more than half of parents ages 55 and older say they rarely or never discuss money with their children.

These parents hoped one child would step in to help manage the portfolio and that the others would take on roles like executor or trustee. Instead, the children left the meeting feeling frustrated and unprepared. They urged their parents to hire someone outside the family entirely.

The wealth wasn't the problem. The problem was that nobody had built the muscles for stewardship until the day they were suddenly required.

As a legacy planning specialist at Novare Capital Management, I think about preparing the next generation less like a single event and more like a curriculum, one where the lessons grow with the child instead of arriving all at once in a conference room.

Here's the road map I walk families through, stage by stage.

Elementary and middle school: Save, spend, give

The foundation starts simple: Help a child become intentional with every dollar they receive.

One family I worked with paired basic money lessons with a values-based twist. Each year, their three children picked a charity, researched it and presented why it mattered to them.

The child who showed the strongest research and conviction chose that year's family vacation destination, and every child still made their own donation, matched by the parents.

It turned saving and giving into something the kids competed to get right, and by the time they were adults, they brought that same confidence into estate planning conversations instead of feeling overwhelmed by them.

A savings match works the same way. If a child saves a dollar, the parents contribute 25 cents. It's a small practice, but it introduces the idea of matching contributions years before that child will encounter an employer 401(k) match.

Whatever structure you use, keep the terms consistent and let the child retain some control, including the freedom to spend within clear guidelines.

High school: Real costs, real stakes

Teenagers need lessons that move from abstract to practical. If you started a savings match earlier, high school is when a teen can begin contributing a percentage toward bigger costs, such as a car, a musical instrument or sports equipment.

That shared stake teaches delayed gratification in a way allowance never will.

This is also the right window to introduce responsible credit use, while the teen still has parental guardrails at home rather than encountering credit for the first time during their freshman year of college.

For investing specifically, I like mock trading exercises that let teens experience real market swings without real money on the line.

Investors with a Schwab brokerage account can use paperMoney, a free virtual trading platform, to practice buying and selling with fake money. It's a lower-pressure way for a teen to get comfortable with market swings rather than jumping straight into a real account, like an UTMA a grandparent funded with $10,000, where mistakes carry real consequences.

One mistake I see often: Trying to get a 16-year-old to care about retirement, which is too abstract at that age.

The more effective play is teaching the underlying skills, delayed gratification, budgeting, paying yourself first and comparing fees and providers, since those transfer directly into retirement readiness later without requiring a teenager to care about something that's 50 years away.

The 20s: Building independence without a safety net

Young adults need a budgeting approach that covers both savings and debt at the same time. That means understanding high-yield savings accounts, prioritizing high-interest debt paydown and building an emergency fund that can cover three to six months' worth of expenses.

This lesson is more important than many people realize: If parents become the automatic backstop for every setback, that precedent is hard to undo later.

This is also the age to talk through what support looks like if that emergency fund isn't enough. If an adult child needs to move home for a few months, will they pay rent or contribute to groceries? Is there an end date?

Working out those terms before a crisis hits keeps the conversation feeling like a plan instead of a rescue.

30s and beyond: From teaching to partnership

Once adult children reach their 30s, the goal shifts from teaching habits to preparing them for real roles in the family's financial future.

If regular family meetings haven't started yet, this is the time, and I recommend starting with a "ground rules" session rather than a numbers session: How does this family want to communicate about wealth going forward?

You don't need to open the full balance sheet to have this conversation. Plenty of families aren't ready to disclose the size of an estate, and that's fine. Disclosure comes later.

What matters first is whether the family has built the communication and trust to handle it when it does.

Four signs your children are ready for more

Age is a poor predictor of readiness. What I look for:

• Can they explain where their money went and why?
• Do they consistently save before they spend?
• Can they compare options and ask questions before making a decision?
• When they make a financial mistake, do they learn from it instead of hiding it or expecting someone else to fix it?

Those four behaviors tell you more about a child's readiness to handle money than any birthday will.

Let's revisit the family I opened with. Their children weren't incapable — they were simply never given the stage-by-stage practice that would have made a room full of legal documents feel familiar instead of overwhelming.

You don't need a perfect plan or a full disclosure meeting to start. You need one honest conversation at whatever stage your kids are at right now — and a willingness to keep having it as they grow.

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

More retirees are asking AI the money questions they used to ask financial advisers.

The appeal is obvious. AI chatbot answers arrive in seconds, nothing is embarrassing to ask, and it costs nothing. The problem is that a wrong or incomplete answer looks exactly like a right one.

This guide explains why AI gets retirement questions wrong and provides seven steps you can use to check an answer before you act on it.

Why AI gets retirement numbers wrong

A chatbot does not look anything up. It was trained on a large body of text gathered up to a cutoff date, and it answers by predicting which words most plausibly come next. When it states a figure, it is reproducing what appeared most often in that text — it's not reading a current government page.

Retirement rules are badly suited to that, because most of the important numbers change every year.

Contribution limits are the clearest case. For 2026, the amount that can go into a 401(k) rose to $24,500, and the IRA limit to $7,500. A year earlier, they were $23,500 and $7,000. A model trained before that announcement would provide last year's figures with complete confidence, and nothing in the phrasing would suggest the numbers are stale.

Other figures can be changed by legislation, after the former figure has circulated for years. For example, the age when retirees must start taking required minimum distributions (RMDs) used to be 70½, then it was 72, then 73, and it reaches 75 in 2033. All four ages appear across the internet, usually with no date attached.

Basically, AI handles concepts reliably and specifics unreliably. The seven steps below are built around that split.

Step No. 1: Check the year on every number

Any answer containing a dollar amount, an age, a percentage or an income threshold needs a date attached before it is worth anything.

Ask the chatbot directly which tax year the figure applies to. When asked, a chatbot will often admit its information may be outdated, even though it volunteered the number without hesitation a moment earlier.

Consider any figure with no year attached suspect.

Step No. 2: Ask which agency sets the rule

This is the one question a chatbot answers reliably, because it is a concept question rather than a numbers question.

Information about contribution limits, RMDs and tax treatment should come from the IRS.

Benefit amounts and claiming ages should come from the Social Security Administration.

Information about Medicare premiums and income surcharges (IRMAA) should come from Medicare.gov and the SSA.

Pension rules sit with the Department of Labor.

Knowing which agency oversees the rule turns vague verification into a single page to open.

Step No. 3: Verify at the source

Once you get an answer from a chatbot, go to the agency's own site rather than simply reading a summary. For example, federal agency pages will state which year a figure applies to.

Skipping this step could be expensive. Missing an RMD triggers a penalty of 25% of the amount that should have been withdrawn, reduced to 10% if corrected quickly.

On a $40,000 distribution, that is $10,000 for a deadline a chatbot might have gotten wrong.

Step No. 4: Feed it your own circumstances

A chatbot answers in generalities unless you provide specifics.

Supply the details that actually influence the outcome: Age, types of accounts, pension income, state of residence and marital status, including whether your spouse has their own earnings record. (Never provide details that are personally identifiable, though.)

Then compare the answer with the answer you get when you provide none of those details.

If the response barely changes, then the advice for your particular situation cannot be trusted.

This matters most when it comes to thresholds. Medicare's IRMAA works as a cliff rather than a gradual increase — income above $109,000 in 2026 for a single filer and $218,000 for a couple.

A chatbot that suggests you do a Roth conversion without making any reference to IRMAA can lead to you facing four figures in annual premiums two years later (since IRMAA is based on your income two years ago).

Step No. 5: Ask the same question twice

Pose the question again in different words, ideally on a different day, and see whether the original response holds.

Then change one detail, such as adding five years of age or removing pension income, and check that the answer moves in a direction that makes sense.

Answers that swing wildly when you rephrase the question are being generated, not recalled. When two responses conflict, the tie gets broken by checking the relevant agency's page, not by asking the chatbot a third time.

Rawad Baroud, CFO of ZeroGPT, says that consistency should never be confused with accuracy when evaluating AI-generated information. "Generative AI can produce an answer that is clear, detailed and convincing without having verified the facts behind it.

"Asking the question again can expose inconsistencies, but getting the same answer twice doesn't prove it is correct. For financial information, the final check still needs to be against an authoritative source."

So use repetition as a warning system, not as proof of accuracy. Whether the answers are different or the same, you should always verify any important numbers or rules.

Step No. 6: Ask what it left out

Chatbots answer the question asked and rarely flag what sits outside it.

Two prompts do most of the work here:

• Ask what assumptions the answer depends on
• Ask what would make this the wrong move

A recommendation to convert to a Roth, for instance, should surface the tax due this year, the effect on Medicare premiums and the five-year rule before it counts as complete.

According to Gregor Emmian, deputy chief growth and finance officer at Rise, "The most dangerous AI answers are the ones with no caveats attached. If a chatbot tells you to convert to a Roth or claim (Social Security) early without mentioning what could go wrong, that's not a complete answer — it's half of one.

"Retirees should treat 'what am I not being told?' as a mandatory follow-up question, not an optional one."

An answer that mentions no downside is incomplete — every retirement decision requires tradeoffs.

Step No. 7: Consult an adviser when an irreversible decision is involved

Some actions cannot be undone once you do them. Claiming Social Security, converting a large sum to a Roth, buying an annuity or taking a pension as a lump sum all belong in that category.

The cost of a wrong turn here is permanent. Claiming Social Security at 62, for someone whose full retirement age is 67, reduces the monthly benefit by about 30% for life, and that reduction extends to the survivor's benefit.

On a $2,400 benefit, it is roughly $720 a month, or more than $8,600 a year, for as long as either spouse lives.

For anything in this category, print the chatbot's answer and take it to an adviser or accountant. Ask which parts are wrong and why.

That conversation will be quicker and less expansive than one you start from nothing, and it puts the specifics in front of someone who can be held responsible for them, which no chatbot can.

The bottom line: If you're using AI this way, the main thing you should keep in mind is that the moment an answer sounds the most authoritative is the moment when you should question its accuracy and explore further, preferably through the relevant agency.

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

Required minimum distribution season sneaks up on many retirees.

RMDs are the amounts you must withdraw from tax‑deferred retirement accounts once you reach the required age, which is 73 for individuals born from 1951 through 1959 and 75 for those born after 1960.

Failing to take an RMD can be an expensive mistake. Vanguard research estimates that missed RMDs cost investors as much as $1.7 billion a year, and most of that loss is avoidable with better organization and planning.

Every year, millions of people log into their IRA, withdraw the smallest amount required and move on. The RMD becomes a chore to complete before December 31.

This approach misses the point. An RMD is one of the most important annual decisions in retirement planning. How you handle it can influence your:

• Taxes
• Medicare premiums
• Charitable giving
• Investment allocation

It can also affect the legacy you leave to heirs.

The question is not how to merely satisfy the RMD requirement, but how this year's distribution should fit into your spending, tax strategy, charitable goals and estate plan.

Get organized, then get clear on what you need

One of the biggest challenges with RMDs has nothing to do with taxes. It is simply tracking down every account and calculating what you owe, which turns into a headache when your savings are scattered across several institutions.

If you are approaching retirement, consolidate your retirement accounts wherever possible. Fewer accounts require a simpler calculation, and a simpler calculation means fewer costly mistakes.

Once your accounts are in order, determine how much money you actually need from your IRA.

If the full RMD covers your living expenses, the decision is straightforward.

If it does not, the RMD becomes a spending plan waiting to be written, one that can support charitable giving, fund a Roth conversion, get reinvested or build a cash cushion.

That shift — treating the RMD as a cash flow event rather than an automatic spending requirement — unlocks everything that follows.

Let charitable intent drive a QCD and watch your AGI

A qualified charitable distribution, or QCD, lets anyone who is 70½ or older send money directly from a traditional IRA to a qualified charity, excluding it from taxable income entirely.

For 2026, the limit is $111,000 per person, and each spouse with their own IRA gets a separate limit.

The temptation is to treat this purely as a tax trick. Resist that. Start instead with a simple question: How much were you already planning to give to charity this year?

If the answer is $25,000, a QCD is simply the most efficient way to move money you were donating anyway.

Here is where the strategy gets powerful. Picture a 75-year-old with a $1.5 million traditional IRA and a $60,000 RMD. She needs only $20,000 for living expenses and already gives $25,000 a year to charity.

Instead of taking the full $60,000 as taxable income and separately writing a $25,000 check, she can direct $25,000 straight from the IRA to charity through a QCD. That portion never touches her tax return. The remaining $35,000 comes to her as a normal distribution. Same total withdrawal, same charitable gift, considerably less taxable income.

The reason this matters goes beyond the tax bracket. Most people fixate on their marginal rate and stop there, but a QCD reduces adjusted gross income (AGI) directly, and AGI quietly drives a lot of other costs in retirement.

A higher AGI can trigger Medicare IRMAA surcharges, increase the taxable portion of Social Security benefits and push you past thresholds tied to other deductions.

Before adding an additional $30,000 or $50,000 to your income, do not just ask what tax bracket that lands in. Ask what it does to your entire financial picture for the year.

Time your RMD deliberately

There is a common instinct to take the RMD in January and be done with it. Unless you need the cash immediately, there is usually no advantage to rushing.

Waiting lets the year's full tax picture come into focus first, including income, charitable plans and whether a Roth conversion makes sense.

The RMD portion itself cannot be converted to a Roth IRA, but you can take the required distribution first and then, separately, convert an additional amount if your bracket allows it.

The real annual question becomes a combination of:

• How much goes out as the RMD?
• How much becomes a QCD?
• How much room remains for a Roth conversion?

Getting that mix right, year after year, is where real tax savings accumulate.

Also, remember that any amount withdrawn beyond your RMD does not carry over to reduce next year's requirement, since every year resets on its own. Extra distributions should have a clear purpose, whether that is a large expense, a gift or a Roth conversion, rather than being taken casually on the assumption they will count later.

Timing extends to the assets themselves, not just the calendar. When it is time to raise the cash, do not simply sell whatever happens to be sitting there. Look at the full portfolio first.

If stocks have run up and your allocation has drifted more aggressive than intended, the RMD is a natural chance to trim appreciated positions, generate the required cash and rebalance at the same time, turning a required withdrawal into a disciplined investment decision instead of an afterthought.

Think beyond this year

For retirees with substantial IRAs and genuine charitable interests, QCDs can become part of a longer-term legacy strategy.

IRA assets left to heirs are generally taxed as ordinary income when withdrawn, while assets given to charity through a QCD are not taxed at all.

Directing a portion of the IRA to charity during your lifetime, rather than leaving the whole balance to be taxed later, accomplishes the same charitable goal more efficiently than doing it through your estate. And by drawing down the IRA instead of a taxable account, which gets a step up in basis at death, you may leave your noncharitable heirs better off, too.

The retirees who handle this best treat it as an ongoing process rather than a once-a-year fire drill.

Early in the year, estimate income, review charitable intentions and identify the right RMD and QCD amounts.

Confirm everything is executed well before the December rush and keep simple records of every QCD, including the charity, the date and the amount, since documentation matters for tax reporting.

Markets shift, tax laws change and personal goals evolve, so an RMD strategy built once and never revisited will eventually fall out of step with your life.

The retirees who get the most value out of this season stop thinking of it as a withdrawal requirement and start treating it as one of the most useful planning conversations they have all year.

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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.

During my years as a full-time staffer for Kiplinger Personal Finance Magazine, I wrote or edited nearly a dozen stories about potential retirement destinations. We profiled college towns, beach communities and overseas enclaves for expats in search of adventure.

I enjoyed researching, and occasionally visiting, cities that were popular with retirees. Our stories usually generated a lot of feedback, sometimes from readers who disagreed with our choices ("The traffic here is terrible!") or believed we overlooked features that made their own communities desirable.

Inevitably, while writing those stories, I thought about where I would like to retire. Likewise, when my husband and I went on vacation, I often found myself wondering what it would be like to live in places we had grown to love. But after some discussion, I think we'll probably stay where we are — in Northern Virginia, just outside Washington, D.C.

We're not unusual. A 2024 survey by the Transamerica Center for Retirement Studies found that 62% of retirees were staying in the home they lived in before they retired. Among those who relocated, 36% wanted to be closer to family and friends, about a third downsized into a smaller home, and about a quarter moved to a community that offered a lower cost of living.

Those results match what I'm hearing from retired friends. One couple I know moved across the country to be closer to their adult children; I also have friends who moved to the Midwest because the cost of living is lower.

One couple I know downsized to a home in a 55+ community, where they pay it forward by driving older residents to doctors' appointments.

Why we're staying put

Our decision is based on a couple of factors. A big one is access to healthcare. We live less than two miles from a major hospital center, and there are plenty of specialists in the Washington, D.C., metropolitan area. As much as I love the rural area where I grew up, it's not unusual for people in my hometown to drive more than an hour to see a cardiologist, and general practitioners are becoming hard to find, too.

Another plus is strong public transportation. If at some point we have to give up our car keys, we'll still be able to get around. We live less than two miles from a station for the region's Metro rail service, and there's a bus stop a block from our house. In a pinch, we can use a ride-sharing app such as Uber or Lyft.

By contrast, there's no public transportation in my hometown, and "ride share" means getting someone from church to give you a lift to the grocery store.

There are drawbacks to staying where we are. The cost of living is higher here than it is in many other parts of the country. Virginia doesn't tax Social Security benefits, but most other types of retirement income are taxed at a top rate of 5.75%, although eligible retirees can deduct up to $12,000. Our property taxes are high, reflecting a sharp increase in the value of our home.

For now, I think our plan is manageable, but I'm also aware of the need to be flexible. Our neighborhood could change, or we could determine at some point that aging in place is no longer practical. In the interim, I'm viewing retirement as an extended staycation. I'm familiarizing myself with local parks, museums and other venues that I didn't have time to visit before I retired.

I'm enrolling in adult education classes. And I'm making an effort to get to know more of my neighbors. Last winter, we shoveled snow for some of the elderly homeowners on our street, and I hope someday a younger person will do the same for us.

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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Do you remember the spring of 2021? It felt like we had all been let out of COVID-19 jail. Sure, there were new variants of the virus, but most people were vaccinated and eager to swipe, tap or hand over cash.

We promptly took our then-3-year-old to Jamaica. This was the inflation liftoff.

An eagerness to spend, a money supply that was about 30% higher than pre-pandemic levels and supply shortages from shuttered factories quickly caused prices to accelerate.

If you'd told me then that I would still be writing about inflation five years later, I would have been seriously concerned. But here we are.

We have now been through what most consider an interest rate-cutting cycle that was cut short. We also have a new Federal Reserve chair, Kevin Warsh, who has been (not so) tacitly tasked with cutting rates at the same time inflation has reawakened.

The two things are at odds: Raising rates is supposed to cool inflation by making things more expensive, while cutting rates is stimulative to the economy and often inflationary.

The majority of this inflation is headline inflation (food and energy), caused by the oil shock in Iran. Because of this, the market had moved from a less than 1% chance of a rate hike at the beginning of 2026 to an almost 45% chance as of mid-May.

Indeed, in September, the Fed raised the federal funds rate by 25 basis points, to 3.75% to 4%. The Fed is expected to raise the rate again before the end of the year.

So, here's what that means for retired folks.

A bounce back in cash rates

It doesn't seem that long ago when cash was paying basically nothing. More recently, you could get cash equivalents over 5% in a high-yield savings account.

Today, most things have settled in the mid-3% range. In the 5% range, it was a pretty easy decision for retirees who needed liquidity to keep it in cash.

In the 3% range, it's a tougher question. That question is a bit easier to answer now that the Fed has hiked rates.

If you still have a lot of cash sitting in a checking account at a large bank, there is probably a better way.

Most brokerage houses have a plethora of cash-equivalent options that pay significantly more.

Good for guaranteed income

Similar to cash equivalents, guaranteed income in the form of fixed annuities tends to move up with interest rates. The higher the rate environment, the more an insurance company is willing to pay you for the same pot of money you turn over to them.

In the previous hiking cycle, we were able to replace the majority of our clients' annuities with higher income guarantees — often significantly higher.

If you have an annuity issued between 2000 and 2022, it's worth having it looked at.

Time to de-leverage

When rates rise, floating-rate loans become more expensive.

For our clients, floating-rate loans most often take the form of home equity lines, securities-backed lines of credit and adjustable-rate mortgages. If you have floating-rate debt and some money in the bank, it may be a good time to pay down those debts.

My wife's car lease ended in 2022, and we were quoted rates of 9% or more for five-year car notes. Though it shouldn't be anything like last time, this is a strong argument for buying vehicles in cash should the funds be available.

I often use 5% as a sort of back-of-the-envelope line in the sand. If the note is over 5% and you have the cash, you probably want to do that. Below 5% and financing likely makes sense.

Your financial plan should dictate this decision. In our software, we can raise the rate and then see what happens to the plan success rate if a client were to accelerate the paydown. You can play around with that same software for free.

Continued struggles in the broader housing market

If you were waiting for mortgage rates to come down to bring more buyers into the pool for your home, you'll either have to keep waiting or pull off the Band-Aid and sell.

Nationally, the housing market is struggling. There are many more sellers than buyers. It's the opposite of the insane environment coming out of the pandemic.

However, real estate is hyperlocal, and we have clients who are selling their homes with little issue.

Zooming out, higher rates are bad for the housing market. Buyers focus on what they can afford in a monthly payment more than the total price.

As interest expense goes up, that same monthly payment buys less, which should bring down housing prices.

It's good for buying, but not so good for selling.

How you can help your kids if they're trying to buy a home

Just as the pool of buyers for your property is now reconsidering a purchase, your adult children who are trying to get into the market are probably equally frustrated.

In 2022, someone who took on a $1 million, 3% mortgage was paying $2,500 per month in interest expense. Today, that same loan amount at 6.5% has a monthly interest expense of about $5,400. That's $2,900 more per month for the same loan amount.

There are a lot of factors to consider before writing a large check to your kids to help them buy a home.

Here are a few to keep in mind for intrafamily loans:

• The loan must not materially impact your situation: While this is a secured loan and you could take ownership of the home should they default, that is an ugly situation. Lend only money you know you don't need.
• This is an actual loan, not a gift: Interest must be charged at a minimum federal rate, which can be referenced at the IRS website.
• Lending money can make Thanksgiving dinner uncomfortable: This isn't just a math problem. You have to accept that you are signing up for a long-term financial arrangement within your family. For some, that's a plus; for others, it's a red line.

If the stars align, these loan rates will be lower than what your kids could get in the market, and the interest you earn will typically be higher than what you're earning at the bank.

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

Many women find themselves managing a financial life that became theirs alone, often after divorce or a loss, at the end of a career they built. And it tends to arrive on top of everything else they're already carrying, because women are so often the ones taking care of everyone else first — the kids, the aging parent — which means their own retirement plan is the one that never gets made.

You can see the result on a desk. The stack of papers, statements, policies, beneficiary forms and the envelopes you've been meaning to open grows taller every month.

For many, the easiest response to that stack is to look away and hope it somehow resolves itself. It rarely does, and the longer important financial decisions sit untouched, the harder they can become to unwind.

But there's a version of this that looks completely different: A Saturday morning, a cup of coffee and a single page laying out everything you'll accomplish this year in three or four clear steps.

Closing the distance between those two pictures comes down to several key things I've learned over 24 years as a wealth manager: Asking the right questions before focusing on investment returns, working through your finances as one connected system rather than a pile of separate decisions, and refusing to build a plan that takes care of everyone you love but leaves you out of it.

Why I see this differently

I didn't arrive at this work from a textbook. I married young, and we had two children. Then the marriage came apart, and I found myself raising my young kids largely on my own.

Suddenly, I wasn't just managing their day-to-day lives; I was carrying the responsibility for their financial future, too — college, first cars, opportunities and all that I wanted to make possible for them.

The lesson I took from it is one I'd offer any woman: A financial future can land on one person with no warning, and hoping it won't isn't a solid plan.

At 24, I was also diagnosed with cancer, and for a time, I needed people to care for me. That taught me something no spreadsheet could: Almost none of us is as prepared as we think for the moment we need care, emotionally or financially.

I haven't experienced widowhood, but I know loss and I know illness. Those experiences gave me a deep respect for the emotional and financial weight women can carry when life changes without warning.

I'm also one of the professional businesswomen I serve, which taught me one of the most common mistakes of all. You pour everything into your work, tell yourself you'll get to your personal finances later, and "later" keeps moving.

When a woman who has built a successful career thinks about stepping away from work, she's untangling two things at once: Her identity from the work that shaped so much of her life, and her financial future from everything she worked so hard to build.

Those experiences shaped how I work, and what follows is what they taught me.

Ask the questions that actually matter

When a woman sits down with me, she almost never opens with a question about her rate of return. She opens with the people she loves. Will my family be covered? Can I help my aging parent? Those are the questions that keep her up at night, and they tell me far more about what her plan needs to do than any performance number could.

There's another question women rarely say out loud, and it matters just as much: What do I want my life to look like now? Can I build a life I love, too?

You don't have to choose between these questions, but you do have to name them, because every one takes money, planning and foresight. I know, because I did it myself. My kids are 18 and 22 now, and both know they had their opportunities because their mother asked those questions about a decade ago and then made a plan to make it happen.

Use a framework to help guide your planning

Answering those questions takes more than good intentions; it takes a way to work through everything at once. Here's a framework you can apply to your own financial life. I call it SMART, and its five parts cover what a plan should include: How you spend, what you make, how you invest, what you leave behind and the strategy for tax efficiency.

Spend. Spending isn't one number. Over 30 or 40 years of retirement, some expenses are inflationary, some fixed, some one-time, some seasonal. It's about how much you spend and, just as importantly, when.

Make. It's not simply about how much you make today, but how much you make over your lifetime — and how thoughtfully you coordinate these income sources so they are there when you need them most.

Assets. Through market cycles, including 2008 and COVID, I learned the conviction I hold most firmly: It's not about timing the market; it's about time in the market.

Remaining assets. For your heirs, the question isn't what you leave behind but how you leave it to them. Without thoughtful planning, an inheritance can create unintended taxes and complexity for the people you love. This is where legacy, estate, trust and risk planning come together.

Taxes. The goal is to lower your lifetime tax bill, not just this year's. Wealth isn't about how much you make. It's about how much you keep.

Focus on the whole picture, not one component

I keep a Rubik's Cube on my desk because it mirrors how the SMART process works: Turn one face, and the others shift. Spending affects taxes, taxes affect what your heirs receive, and an income decision at 62 changes what's possible at 80.

A spreadsheet treats each as its own column, but your life doesn't work in columns. So don't optimize one variable at a time; sometimes the right move is to undo a step, because it sets up the two that follow.

And because every move depends on where you're headed, the only place to start is your ideal retirement lifestyle. Start there, name it specifically, and reverse-engineer the steps that help get you there.

Write yourself into the plan

This is where I see women shortchange themselves. When they name that ideal life, it's almost always built around other people: The grandchildren's education, the trip the whole family takes, the cushion that protects everyone if something goes wrong. Those are worthy goals. But notice what's missing. Her own line, the one that funds what she wants, is the first to get trimmed when the numbers feel tight, and often it was never written in at all.

I treat that line as non-negotiable, and I'd urge you to do the same in your own planning. When you map out the years ahead, give your own life a specific, funded place on the page: The second act you want to start, the part-time passion, the standing date with friends, the travel you keep deferring.

Put a number on it, the way you would your children's or grandchildren's tuition.

A plan that assumes you'll make do with whatever is left over isn't balanced; it's just the old habit of putting yourself last, written into a spreadsheet. The equation only solves when both sides, the people you love and the life you want, are actually on it.

What planning is really for

I often think about women a generation ahead of mine who spent their whole lives caring for everyone else and never once pictured what they wanted for themselves. They reach retirement and ask, almost in surprise, what now?

I want a different next chapter for the women I work with, and it's within reach for any woman willing to do the work: Ask the questions that are really about the people you love, run them through a process that treats your finances as one connected whole, and make sure your own life is written into the answer.

Do that, and the stack of papers and the dread that comes with it turns into a Saturday morning, a cup of coffee and one clear page. That is what it means to solve the equation: Not choosing between the people you love and the life you want, but building the one plan that carries both.

You can take care of everyone, leave behind something you're proud of, and still keep a life that's unmistakably your own. You just have to put yourself on the page.

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

A 60-year-old retiree is reviewing her retirement plan. Her accounts, Social Security and withdrawal strategy all appear to work through age 85.

Then she asks the question that changes everything: "What if I live as long as my mother did? She made it to 95."

In one sentence, a 25-year income plan becomes a 35-year income plan. The issue is not whether you will live to 95; it is whether your income plan can survive if you do.

The same assets may need to fund another decade of withdrawals, market cycles and inflation. That possibility is more common than many plans account for.

According to the Social Security Administration's current actuarial life table, roughly 8% of men and 14% of women who reach 65 survive to 95.

That is why age 95 belongs in your core retirement income plan, not just in long-term care conversations.

A longer timeline changes the withdrawal math

A withdrawal percentage can create false comfort if the timeline is wrong. Recent retirement-income research estimates a 3.9% starting rate for 30 years of inflation-adjusted spending with a 90% probability of funds remaining. At 35 years, the modeled rate falls to 3.5%.

For a $1 million portfolio, that difference reduces first-year withdrawals from $39,000 to $35,000 before taxes and fees. Weak returns in retirement can make the higher spending level harder to sustain.

Retirement rarely gets cheaper simply because the projection ends. Even a steady 3% annual increase in prices would turn $60,000 of spending today into roughly $146,000 after 30 years and almost $169,000 after 35.

Build the floor before reaching for more return

An income floor starts with a simple calculation. Add up your essential annual expenses. Separate expenses that must be paid — housing, food, utilities, insurance and basic transportation — from those that can change, such as travel.

Then subtract reliable lifetime income, such as Social Security and a pension.

This is where protected lifetime income, including income from an annuity, may help.

Research from the Stanford Center on Longevity found that pooling longevity risk may support higher expected lifetime income in some scenarios than self-funding it.

An annuity with a lifetime-income feature is one way to close that gap, but it is not right for everyone. It may fit retirees who want help covering essential expenses for life and are comfortable trading some liquidity for dependable income.

Too often, retirees consider protected lifetime income only after a portfolio takes a hit. It may be more useful if you select it while you still have planning flexibility and adequate liquid reserves.

The goal is not necessarily to cover every dollar of spending with protected lifetime income. It is to protect the bills you cannot afford to miss, while keeping liquid assets for growth, emergencies and discretionary spending.

Keep the conversation about income, not products

Before comparing annuity illustrations, riders or product features, start with four practical questions:

• Which monthly bills do you need to cover no matter what the markets do?
• How much dependable income is already coming in for life?
• If the market fell 20% next year, where would spending money come from?
• How much savings do you want available for emergencies?

Those answers clarify what your income strategy needs to accomplish before product features enter the conversation. Fees, surrender periods, inflation features, death benefits and access to principal can change the result.

FINRA cautions consumers to understand costs and restrictions. Guarantees depend on the issuing insurer's financial strength and claims-paying ability.

Keep a separate reserve for surprises and an inflation strategy because a fixed payment can lose purchasing power.

Make age 95 part of the next review

At your next financial plan review, rerun the strategy through age 95, test the first five years against a severe market decline and inflate essential expenses across the full horizon.

Then ask: "Which bills do I never want the market to vote on?" If too many essential expenses depend on strong returns arriving on schedule, consider building a stronger income floor while you still have choices and liquidity.

A durable income floor may give retirees more confidence to use the rest of their portfolio for the life they planned, even if that life lasts longer than expected.

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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.

Receiving a financial windfall through an inheritance can trigger feelings of guilt and sadness that come as a result of losing a loved one.

What you've been left with is so much more than a number; it's a lasting legacy, and the kind of generosity that can feel overwhelming. You want to remember what the person meant to you — not waste what they worked so hard to leave behind.

Used well, a large windfall can wipe out high-interest debt, build an emergency fund or boost your retirement savings contributions. Used frivolously, it can disappear as fast as it arrived. A recent study shows that 42% of heirs spent their entire inheritance within one year.

New Morning Consult-Kiplinger research shows that adult children are far less likely to think they'll get an inheritance than parents who expect to leave one; 42% of younger respondents say they don't expect to receive a sizable amount. However, about twice as many parents plan to leave a meaningful inheritance.

That’s encouraging, given that 60% to 65% of Americans live paycheck to paycheck, according to a Wealthvieu survey, and another 56% can’t cover a $1,000 emergency. If $100,000 showed up in your bank account, it would probably feel like a lot of money.

If you’re expecting a windfall or you’ve already received a large inheritance, here’s a guide to set up your financial future so the money lasts, instead of disappearing in the first year.

Take time to breathe

According to Capital Group, two-thirds (65%) of Gen Xers and millennials say they regret how they used their inheritance money, with nearly two in five wishing they had invested more. While only 18% of millennials turned to financial advisers for investment advice, 27% were more likely to turn to social media and "finfluencers" for advice when they inherit.

Srbuhi Avetisyan, a research and analytics specialist at Owner.One, offers this advice. "Don't rush to make the money productive. Give yourself permission to do nothing with it for a while. An inheritance is unusual money because it arrives together with emotion."

She says that depending on the circumstances, there can be grief, relief, guilt and a strange sense that you need to "do something sensible" immediately. "That's not a great state in which to make a $100,000 decision."

If you receive the $100,000 in cash, consider putting it in an FDIC-insured high-yield savings account or money-market fund and leaving it there while you figure out what you want to do with it longer term. Then give yourself time to breathe. You don’t have to rush into any decisions. Coping with grief isn't easy, and adding $100,000 to the mix can only complicate matters.

Don’t treat a promise like a payday

Planning ahead is a sound strategy in many situations. But when it comes to an inheritance, making plans for how you'll spend the money before it lands in your bank account can be reckless. Wait until you know what you have, then incorporate the funds into your retirement plans.

While you might anticipate a certain amount, remember that circumstances for the person leaving you the money can change, and so can the inheritance. Your friend or relative might need to go into a nursing home or an expensive long-term care facility, or they might decide to give all their money to their favorite charity and leave you with a future you can't guarantee.

Even Thomas Jefferson said, “Never spend your money before you have it.” Talk with an inheritance planning adviser who can help you decide the best way to handle the money in the short term, as well as help devise a long-term financial plan that takes all of your assets and obligations into consideration.

Focus on debt reduction first

Paying down debt with an inheritance isn’t the most exciting first move, but it is one of the most valuable. Credit cards can carry an interest rate of 20% or more, which can eat away at even the largest inheritance.

Paying off high balances is a guaranteed return on your money. It also frees up cash flow and makes it easier to save or invest the rest of the inheritance. Paying off student loans or your home mortgage might also help, especially if your goal is to be debt-free.

Consider investing the money

With the help of a financial planner, you might want to invest the money from your inheritance. Diversify your investments across different options with varying risk levels, depending on how knowledgeable (and risk-tolerant) you are. Rather than investing it all at once, consider investing over time, using a strategy such as value or dollar-cost averaging.

Boost your contributions

An inheritance can also provide an opportunity to boost your contributions to a 529 college savings plan account or retirement accounts, such as a 401(k) or IRA. You can’t put inherited money in a retirement account because it isn't earned income or other taxable compensation. However, knowing you have it can give you the comfort needed to boost your contributions.

Take more out of each paycheck for your 401(k). Your take-home pay will be less, but now you can use the inheritance money in your bank account to cover your expenses, such as rent, groceries and bills that your paycheck used to cover. You’ll have the same lifestyle, but you’ll also have more money in your 401(k) for retirement. You can put $24,500 in a 401(k), even more if you’re 50 or older.

You can also put $7,500 in an IRA. If you have a qualifying high-deductible health plan, you can put $4,400 in an HSA for yourself or $8,750 for your family. Those accounts accept a check or a transfer, so inheritance cash can go in directly, as long as you stay under the yearly limits. You could choose a Roth IRA if you think your tax rate will be higher in the future.

Understand the tax implications

Unless you inherit a great deal of money, you probably won't have to worry about federal estate taxes ($15 million per individual or $30 million for a married couple in 2026).

However, certain assets have tax implications. For example, if you inherit securities, jot down what they were worth on the day that the person you inherited them from died. You’ll need to know your cost basis if you decide to sell them.

The tax rules for individual retirement accounts (IRAs) vary depending on whether you inherited them from your spouse or someone else. The type of IRA, traditional or Roth, also matters. You won't owe tax on the amount you inherit, but you will be taxed when you take distributions from a traditional IRA. With an inherited Roth IRA, withdrawals are typically tax-free, but non-spouse beneficiaries are generally required to empty the account within 10 years of the owner's death.

Enjoy your inheritance

If you want to spend some of your $100,000 inheritance on yourself or your loved ones, go ahead. The money is yours now. Just remember, when it's gone, it's gone.

Jason Stephens, founder and managing partner of Evertern Wealth, recently worked with a client who inherited about $150,000 from a grandparent. “They used part of it to take their first trip to Europe, paid off their student loans and invested the rest," he said. "That was a thoughtful use of the money. They enjoyed a meaningful experience, eliminated debt and still directed a substantial portion toward long-term financial security.”

Stephens says there's nothing wrong with enjoying part of an inheritance. The mistake is letting a meaningful financial opportunity disappear through a series of purchases without ever deciding what the money is intended to accomplish.

If you're reasonably secure financially and have been putting off repairs on your leaky roof, or have a medical emergency, that inheritance will come in handy. However, if you're up to your knees in debt, it might be better to focus on setting yourself up for a future no one can predict.

What a $100,000 inheritance can mean

If you receive a $100,000 inheritance, first, be grateful; it can make a positive difference in your life. Stephens recommends taking a few months to understand what you received, the tax implications and what you want the money to accomplish. “That’s often more valuable than rushing to invest or spend it.

"An inheritance can honor both sides of what the person who built the wealth likely wanted," he said. "They wanted you to enjoy some of what they worked so hard to create, and they wanted your life to be more financially secure. Good planning accomplishes both.”

Related content

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• Who Actually Wins the Great Wealth Transfer?
• The Expert Guide to a Tax-Free Inheritance

Most of the expensive mistakes I see in retirement planning as a CFP® are subtle. This one is not.

A Medicare enrollment trap springs most often on the very people who feel least worried about it: Those working past 65 with what they assume is perfectly good employer coverage.

But a hard Medicare deadline with a permanent penalty attached can snare people who did everything else right.

Here's how it happens, why it costs real money and what to do about it.

The setup

When you turn 65, you become eligible for Medicare. Most people know that. What trips them up is the assumption that because they're still working and covered by an employer health plan, they can ignore Medicare until they retire.

Sometimes that is true. Often, it's not, and the difference comes down to the size of the employer and the type of coverage you have.

If you work for a larger employer, generally one with 20 or more employees, your group plan can remain your primary coverage, and you can delay Medicare Part B without penalty under a special enrollment period.

But if you work for a smaller employer, Medicare might be considered your primary payer once you turn 65, even while you're still on the company plan.

In that situation, delaying Part B doesn't just risk a penalty. It can leave you with gaps in coverage, because your employer plan might pay as though Medicare is already covering its share, whether or not you're enrolled.

That distinction — 20 employees —isn't something most people think to check. They see, "I have health insurance through work," and reasonably conclude they're fine. The rules don't care how reasonable the assumption was.

The penalty that never goes away

Here's the part that stings. If you're required to enroll in Part B and you miss your window, the late enrollment penalty is not a one-time fee.

According to Medicare.gov, the Part B penalty adds 10% to your premium for each full 12-month period you could have had Part B but did not. You pay that surcharge for as long as you have Part B, which for most people means the rest of their lives.

Think about what that means. Delay three years when you should have enrolled, and you're looking at a 30% premium surcharge, every month, indefinitely. There is no statute of limitations, no point where it falls off. A misunderstanding at 65 becomes a line item you carry into your nineties.

Because that 30% applies to whatever the standard premium happens to be each year, the dollar cost climbs right along with premiums over time. Across a 20-year retirement, a few years of delay can quietly add up to thousands of dollars in surcharges you could have avoided.

I have seen people discover this years later and have no recourse, because the rules were followed exactly as written — just not by them.

The timing windows that matter

Medicare enrollment runs on specific windows, and missing them is what triggers the trouble. Your initial enrollment period is a seven-month stretch around your 65th birthday: the three months before, your birthday month, and the three months after.

If you qualify to delay because of active employer coverage at a large employer, you get a special enrollment period to sign up later without penalty, typically while you're still covered and for eight months after that coverage ends.

The danger zone is the space between assumptions and rules. People who retire and lose coverage sometimes assume they can enroll whenever they get around to it.

The eight-month clock after employment ends is easy to blow past, especially amid the chaos of leaving a job. Miss it, and you might be stuck waiting for a general enrollment period and carrying the penalty besides.

What to do

A few concrete steps make this entirely manageable.

Well before you turn 65, find out if your employer has more or fewer than 20 employees and confirm in writing how your plan coordinates with Medicare. Your human resources (HR) department or benefits administrator should be able to tell you whether your coverage lets you delay Part B. Do not guess, and do not rely on a coworker's situation, which might differ from yours.

If you're at a small employer, treat your 65th birthday as a real deadline and enroll during your initial enrollment period unless you have confirmed you genuinely qualify to wait.

If you're delaying because of large-employer coverage, mark the eight-month special enrollment period that begins when that coverage ends. Put it somewhere you won't lose it. The moment you retire or drop the employer plan, the clock starts.

Remember that Part D, prescription drug coverage, has its own late enrollment penalty with similar lifetime consequences. If your employer coverage is not considered creditable drug coverage, the same kind of permanent surcharge can apply.

There is one more wrinkle worth flagging, because it catches a particular group off guard. If you contribute to a health savings account, enrolling in any part of Medicare, including Part A, ends your ability to make new HSA contributions.

Part A is premium-free for most people and many enroll in it automatically without thinking, but doing so while still funding an HSA can create a tax problem. If you work past 65, still contributing to an HSA and plan to delay Medicare, that interaction needs to be on your radar.

It's a small detail with outsize consequences and is precisely the kind of thing that gets missed when someone assumes Medicare is a single on-off switch rather than a set of separate decisions.

The bigger lesson

What makes this trap so frustrating is that it punishes inaction by people who weren't being careless, they were just uninformed. There is no investment decision here, no market risk, no judgment call about strategy. It's purely a matter of knowing the rules and the dates, and acting before a deadline that doesn’t announce itself.

If you're approaching 65 and still working, don't let, "I have coverage through my job," be the end of your analysis. It's the beginning of a question, not the answer.

Spend an afternoon confirming exactly how your employer plan interacts with Medicare, and put the relevant enrollment windows on your calendar.

It's one of the rare retirement mistakes that is completely avoidable with a single phone call, and one of the few in which the cost of getting it wrong follows you for the rest of your life.

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

Like many, you might have the best intentions of "getting your affairs in order."

Year after year, it lands on your list of resolutions. Yet, every December, it rolls over, untouched, to the next year.

You aren't alone. Trust & Will's 2026 Estate Planning Report, a survey of 5,000 U.S. adults, found that just 26% of us have a will, down from 31% a year earlier, and that 56% have no estate planning documents at all.

Estate planning feels uncomfortable for two reasons:

• It's a topic most of us know little about
• It forces us to sit with our own mortality

The consequences of this procrastination are significant and affect those you love during an already difficult time.

Without a will or trust, state law decides who receives your assets, not you. That process, called intestate succession, might not reflect what you would've chosen, and it can drag out for months or years in probate court, with legal fees eating into what's left behind.

For high-net-worth individuals, the stakes are even higher: More assets, more complexity and possibly blended families or business interests that default rules weren't designed to handle well.

I'm here to help you break the cycle of avoidance, procrastination and (let's face it) fear. Here are some important basics to help you get started.

1. Your will: The foundation and the safety net

A will is the document most people picture when they think about estate planning, and it remains the foundation. It directs who receives what, it names the executor who will carry out your wishes, and it's the only document that can name a guardian for minor children.

If you do nothing else on this list, do this one. It has two limits worth knowing.

Probate. A will must pass through the public court process that a trust is built to avoid.

Retirement accounts and life insurance don't pass under your will, which surprises people. Those assets go to whoever is named on the beneficiary form, no matter what your will says.

If you're married, there is one more decision to make here. It's a common instinct for married couples to want a single, shared document. Some states don't permit a joint will, and even when one is valid, estate attorneys generally advise against it.

Two separate wills give each spouse independent flexibility to make changes. A joint will can lock in original terms for the surviving spouse even if circumstances dramatically change.

Two wills, written to complement each other, often referred to as "mirror wills," achieve the same shared intent with far more clarity.

2. Revocable living trusts: Skipping probate

A revocable living trust is a legal structure you create to hold your assets, such as your home, investment accounts and business interests. You control it, can change it anytime and continue managing everything exactly as before.

Its key benefit is that assets titled in the trust's name bypass probate entirely when you pass away, transferring directly to your beneficiaries without court supervision.

Settling a trust still takes time, but it's not dependent on a court's calendar. That means a faster, smoother transition for your heirs and privacy as well, since probate records are public. A revocable living trust is often the centerpiece of a modern estate plan.

If you set one up, your will then takes a particular form alongside it, called a "pour-over" will. Any assets you forgot to formally move into your trust or acquired shortly before your death, are "poured over" into it through the will, so they are ultimately distributed according to your wishes.

This safety net ensures any overlooked assets don't fall back into intestate succession. As a backstop, it doesn't replace the trust; it completes it.

There is one misconception worth clearing up. A revocable trust keeps your estate out of probate, but it does not reduce estate tax.

The reassuring news is that most families don't owe any. The federal exemption was increased to $15 million per person in 2026, or up to $30 million for a married couple.

However, state thresholds vary. New York taxes estates above $7.35 million in 2026, and because of the state's "cliff," an estate worth more than 105% of that figure, roughly $7.72 million, loses the exemption entirely and is taxed from the first dollar.

Consider the limits and estate tax rules of your own state.

3. Power of attorney: Your trusted 'agent'

Everything up to this point concerns what happens after you're gone. But the next four documents address a time when you're alive but unable to act or make decisions for yourself, whether because of cognitive decline as you age or a sudden accident or illness.

To prepare for such a time, a financial power of attorney lets you appoint someone who will make decisions on your behalf.

This is an important step to keeping your financial and legal matters on track. It:

• Removes friction with banks and brokerages
• Keeps bill paying, investment management and real estate or business matters moving without interruption
• Can spare your family a court-supervised guardianship or conservatorship, which is public, slow and expensive

Keep in mind that many banks will honor only their own form, so ask each institution what it requires while you're still able to sign.

4. Healthcare directives: A message for your loved ones

A healthcare directive, sometimes called a living will, is a written statement of your medical wishes when you can't advocate for yourself.

Rather than leaving loved ones with the burden of critical decisions such as whether you'd want life support, resuscitation or other invasive interventions, a healthcare directive provides them with a roadmap.

It records your values and expectations, so that if a wrenching decision ever must be made, your family is carrying out your wishes rather than guessing at them under pressure.

5. Healthcare proxies: Naming your decision-maker

While a directive states your wishes, a healthcare proxy (also called a durable power of attorney for healthcare) names a specific person to make medical decisions on your behalf if you're incapacitated.

Real medical situations are often fluid and require judgment calls. Your healthcare directive provides information and guidance for these decisions but can't lay out every scenario that could arise.

Choosing someone who knows you well and can act calmly under pressure matters more than choosing the "obvious" family member. Name the person who can ask a doctor a hard question, then live with the answer.

Tell the people you didn't name why you chose as you did while you can still explain it yourself.

6. HIPAA authorization: The one people skip

Naming a proxy is not quite the same as making sure the people who love you can find out how you are. Federal medical privacy law limits who a provider may share your information with, and a HIPAA authorization is the short form that names the people your doctors may speak with freely.

Your proxy has a right to what they need once their authority is in effect, but many proxies are written to take effect only after a physician documents that you can't decide for yourself, and obtaining that determination can require the very records the proxy is not yet entitled to see.

The authorization removes that circularity. It can also cover anyone you'd like to include, such as a sibling or an adult child. It's usually signed at the same time as the proxy and takes a few minutes. It's often a missed step because it feels redundant.

Check-ins: Not a set-it-and-forget-it

An estate plan isn't a one-time project. Marriages, divorces, births, business growth and moves to a new state can all affect whether your plan still works, or whether it's even valid.

Review your plan every three to five years, and immediately after any major life event. A proxy who has moved out of your life or a beneficiary who has already died, can undo years of careful planning.

There's no time like the present: Check it off the list

Most people don't act until something forces the issue, but that might be too late. Don't wait for a push. Be prepared and give yourself the luxury of knowing that your estate plan is solidly in place.

The topic might be uncomfortable, but the process itself is usually far more straightforward than the anxiety that not having a plan creates.

If you do only three things this month, do these.

First, pull up the beneficiary designations on every retirement account and life insurance policy you own and confirm that each one names the person you would name today. Those forms override your will, and a former spouse or a long-deceased parent still sitting on a 401(k) form is one of the most common ways an otherwise sound plan fails.

Second, write down what you own and how each asset is titled, because titling, not intention, determines what passes through probate.

Third, choose your healthcare proxy and your financial agent, ask whether they're willing to serve, and tell them where the documents will be kept.

Do that much, and an estate planning attorney can build the rest around decisions you've already made, which is faster and less expensive than starting from a blank page. Your loved ones will be glad you did.

This article is for informational purposes only and does not constitute legal, tax or financial advice. Estate planning laws vary by state, and individual circumstances differ significantly. Please consult a qualified estate planning attorney or financial adviser before making decisions about your will, trust or healthcare directives.

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

More than 32,000 Americans now hold $10 million or more in tax-advantaged accounts, with more than 1,000 holding balances above $25 million, according to Joint Committee on Taxation data.

These balances rarely stem from routine contributions to broad index funds. Typically, they trace back to startup founders, venture capitalists and corporate insiders placing low-cost, early-stage equity into self-directed IRAs and watching valuations compound over decades inside a tax-shielded wrapper.

Building that level of wealth is a remarkable achievement. Protecting it across generations, however, presents an entirely different planning challenge.

Mega-retirement accounts face growing scrutiny in Washington. Legislative proposals in the past decade have sought to cap total retirement balances or enforce mandatory distributions once balances surpass $10 million.

In today's dynamic tax landscape, affluent families must ask: Is an IRA still the optimal vehicle for long-term growth assets?

The traditional IRA drag: Ordinary income vs capital gains

Traditional IRAs deliver upfront deductions and tax-deferred growth, but every distribution is taxed as ordinary income — up to 37% federally, plus state taxes.

For rapidly appreciating equity, this dynamic creates a significant tax drag. Gains that would otherwise qualify for long-term capital gains rates (capped at 20% plus the 3.8% net investment income tax) lose their tax character entirely inside a traditional IRA. Decades of growth convert into ordinary income upon withdrawal.

The ordinary income vs capital gains tradeoff deepens for heirs. Under the SECURE Act, most nonspouse beneficiaries must fully distribute an inherited IRA within 10 years. A $20 million traditional IRA forced out over a decade can push beneficiaries into top tax brackets every year, surrendering nearly half the account to tax obligations.

The Roth trap: Income tax free, estate tax exposed

Roth accounts offer tax-free distributions and no lifetime required minimum distributions (RMDs), making them a natural candidate for high-upside equities. Yet, an often-overlooked exposure remains: The full Roth balance remains inside the owner's gross taxable estate at death.

Consider an entrepreneur seeding a Roth account with early-stage equity that grows to $50 million. While heirs receive an income tax-free windfall, they might face a substantial estate tax bill on the balance above the federal exemption limit ($15 million per person).

Another strategy is to withdraw from mega-Roth accounts after age 59½ and gift those funds — either directly or via trust structures. This approach can rapidly exhaust lifetime gift tax exemptions, restricting broader estate options.

Estate planning alternatives: Irrevocable trusts

To insulate high-growth assets from systemic tax drag and estate expansion, families expecting their wealth to trend above the federal estate tax exemption amount often look beyond retirement accounts toward irrevocable trust structures.

One has the choice of paying the trust's taxes over time by using a grantor trust. Because the grantor pays the annual income tax on behalf of the trust, the assets inside compound tax-free without diminishing the trust, principally providing a tax-free gift to beneficiaries each year.

To avoid paying the taxes of the irrevocable trust, the grantor might use a non-grantor trust in which the trust pays its own taxes. The grantor might "turn off" the grantor's trust status to convert the trust into a non-grantor trust.

Grantor trusts can be structured to allow indirect access to trust funds in more than one way. An independent trustee can be granted discretion to make distributions to beneficiaries based on health, education, maintenance or support needs, offering flexibility without giving the grantor direct control.

For married grantors, a spousal lifetime access trust (SLAT) provides a more direct route: It permits actual distributions to a spouse, who might then informally share that benefit with the grantor.

A non-grantor variation, the SLANT, can achieve similar goals, often for state income tax purposes. Because retaining a swap power would convert the trust back to grantor status, SLANT distributions rely more heavily on independent trustee discretion, which calls for more careful drafting.

While legislative discussions periodically evaluate changes to grantor trust rules, these vehicles remain primary pillars for intergenerational wealth transfer when executed with careful legal oversight.

Strategic asset placement across vehicles

Optimizing a complex wealth structure requires matching specific asset classes to the appropriate legal and tax wrappers. Note that these are general frameworks; the right approach for any given family will depend on their specific asset profile, complexity and risk tolerance.

• Traditional IRAs. Often best allocated to steady, yield-generating assets such as private credit or real estate investment trusts (REITs), where ordinary income tax rates match the income profile of the asset.
• Roth IRAs. Highly effective for strong growth equities, provided total household wealth remains within long-term estate tax exemption thresholds.
• Irrevocable grantor trusts. Ideal for high-upside, early-stage positions once family wealth exceeds federal estate tax thresholds, shielding future growth from federal estate tax.
• Taxable portfolios. Well-suited for core appreciated assets intended for transfer at death, leveraging the step-up in basis to eliminate unrealized capital gains. For concentrated, highly appreciated positions held prior to death, structured hedging and derivative strategies can help manage concentration risk, while other diversification tools such as direct indexing can allow for a more gradual transition out of the position.

Preserving generational wealth requires thoughtful vehicle selection, proactive risk management and staying ahead of changing tax frameworks. As balances grow, revisiting where assets sit, and why, can be one of the more overlooked ways to preserve wealth across generations.

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

Your inheritance will likely be very different from your parents'. Two forces are at play. First, as life expectancies lengthen, the next generation is receiving inheritances much later in life. Second, the amount of wealth changing hands is staggering: Trillions of dollars will be passed down as part of the Great Wealth Transfer.

People inheriting money in their 30s or 40s might use those funds to buy a home or pay for their children's college. But those receiving inheritances in their 50s and 60s are using that money differently. For many, this windfall triggers a "second retirement" — an unexpected phase of financial freedom that allows them to completely rewrite their timeline.

Here's how experts recommend maximizing a late-in-life inheritance.

Buying back time

Well-off people are often advised to give with warm hands (while they are still alive) for a reason. Financial gifts for children during their 20s, 30s, or 40s can often be more "helpful" than receiving that money later.

Joshua Mangoubi, founder and chief investment officer at Considerate Capital Wealth Management, is familiar with that scenario. But he also says the narrative is shifting.

"What I usually hear is some version of, 'Man, I could have used this in 1998.' I get it. I would have said the same thing. Give it a few months, though, and the 1998 comment stops coming up," he says.

As Mangoubi explains, "At 35, the money buys stuff. At 60, you already own the stuff. Most of the 60-year-olds I work with are trying to get rid of stuff, not buy more. So what does the money buy now? Time."

What makes a late-in-life inheritance even more valuable, Mangoubi says, is that many older people know what they want to do with their time, whether it’s seeing their grandchildren more often, exploring hobbies, or traveling. And that’s something it’s hard to put a price tag on.

Paying for long-term care

On the flipside, Mangoubi says, a lot of people who receive an inheritance later end up using it to pay for a surviving parent’s long-term care.

"Long-term care insurance has an ugly math problem," Mangoubi says. "The people who can self-fund their care don't need it, and the people who need it can't afford it."

Given the way medical costs keep climbing, Mangoubi isn’t surprised by this trend. According to CareScout, the median cost of an annual assisted living stay was $74,400 and a private room in a nursing home was almost $130,000 annually, as of 2025.

While covering long-term care isn’t the most fun way to use an inheritance, it can at least alleviate an otherwise huge financial burden. Plus, recipients of an inheritance who don’t have their own long-term care plan can use the money to fund one.

Helping children and grandchildren

By the time many people reach their 50s or 60s, they’ve saved well and are still in their peak earning years. As such, they don’t necessarily have a great use for an inheritance. In these situations, recipients will often use the money to better the lives of their kids and, if applicable, grandkids, says Brandon M. Cox, CFP and founder of Coastline Complete Wealth.

"I also see people who inherit in their 50s and 60s realize they already have enough for themselves and start gifting money to their children or grandchildren. In that sense, some late-life inheritances almost skip a generation economically, even if they don’t legally," he explains.

Cox has also observed an interesting trend.

"I’d say more than half of the people I work with who receive a substantial inheritance want to keep all of it in their own bloodline," he says. "Their children become the beneficiaries of those inherited assets instead of their spouse, even in happy first marriages."

Retiring earlier than planned

While older beneficiaries of an inheritance may not "need" the money, it can often be a catalyst for early retirement, Cox says.

"We generally build retirement plans as if an inheritance isn’t coming," he explains. "Once it actually arrives, though, you can see people realize pretty quickly how different their financial picture is."

Cox shares that he once had a client with a successful pharmaceutical sales career who was making good money, but her inheritance let her retire earlier than she otherwise would have.

This phenomenon often acts as a "second retirement," where an unexpected late-in-life windfall allows someone to abandon their primary career trajectory and immediately enter a new phase of absolute financial independence.

"Once you know you don’t have to work anymore, that starts weighing on you pretty heavily when you’re having a bad day at work," he insists.

Patrick Simasko, elder law attorney and financial adviser at Simasko Law, has also seen late-in-life inheritances fuel earlier retirements than planned.

"Kids seem to want to retire earlier than their parents. They saw their parents work and never took advantage of their savings. The kids want to start their retirement as early as possible," he says.

Buying more financial security

In Simasko’s experience, many of his clients who receive a late-in-life inheritance are already in a strong position to retire comfortably. But that extra money, he says, can buy more financial security.

"There has been a major shift away from traditional pensions," Simasko explains. "For a 55- or 60-year-old who may not have a pension of their own, an inherited IRA or other retirement assets can substantially strengthen their retirement picture. In many cases, the inheritance isn't about buying something new — it's about providing greater security, flexibility, and freedom during retirement."

Pivoting to meaningful work

Some people may not be ready to retire in their 50s or 60s, despite being able to do so following a sizable inheritance. Allison Moeschberger, CFP and VP wealth adviser at Johnson Financial Group, says she’s seen clients use their excess income later in life to adapt their careers rather than ditch them.

"Working because you feel you have to is very different than working because you want to," Moeschberger says. "An inheritance can allow them to retire early, move to part-time, switch careers to try something new, or move from a paying job to volunteering."

Moeschberger shares a few stories of meaningful pivots.

"One client left their demanding job as an attorney and became a substitute teacher so they had the choice of working when they wanted to," she says. "Another stepped down from running a business to become a bartender at their local brewery because they already enjoyed going there as a customer and still wanted to be able to interact with people and have interesting conversations."

Funding family memories

You may not need more stuff if you inherit money in your 50s or 60s. But you can use that money to buy experiences, Moeschberger says.

"One of the best parts of being a wealth adviser is watching clients experience the things they dreamed of or wanted to do but thought would never be possible for them," she says. "Mediterranean cruises, real estate purchases in a new location, and home additions are all examples I’ve seen."

Moeschberger also said one client of hers chose to invite their kids and grandkids on a big family trip as an experience they would all appreciate and remember. And that’s a wonderful way to honor a loved one, too.

Related Content

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• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What You Can Do About it
• Could You Handle a Sudden Windfall? Take Our Quiz
• What Happens When You Inherit a House — With Your Siblings

Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers on federal and state estate taxes. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. What's the lifetime federal estate and gift tax exemption?

Question: What is the lifetime federal estate and gift tax exemption for people who die this year? Will it be different for 2027 deaths?

Joy Taylor: The lifetime federal estate and gift tax exemption for people who die in 2026 is $15 million. This amount will go up each year with annual inflation. We don't yet know the figure for 2027 deaths.

2. How many estates pay federal estate tax?

Question: I'm curious how many estates actually pay estate tax, now that there is such a high lifetime federal estate and gift tax exemption.

Joy Taylor: In recent years, about 7,000 Form 706 estate tax returns have been filed with the IRS each year. More than half of these filings are from taxable estates of decedents, meaning estates that owe the federal estate tax.

The nonpartisan Tax Policy Center recently estimated that 6,890 federal estate tax returns would be filed for decedents dying in 2026, with 3,900 filed by taxable estates and 2,990 filed by estates that owe no tax.

3. Will the IRS tax me on inherited property?

Question: My grandmother recently died, and I inherited an appreciated, valuable piece of real property that she owned. Will the IRS tax me on my inheritance?

Joy Taylor: No. Inheritances are generally tax-free for federal tax purposes. And you would generally take a stepped-up tax basis in the inherited property equal to fair market value at the time of your grandmother's death. So if you sell the property shortly after her death, you shouldn't recognize much taxable gain from the sale.

4. Which states have their own estate, inheritance taxes?

Question: Which states have their own estate or inheritance taxes?

Joy Taylor: Most states do not impose taxes upon death. However, some do. Washington, D.C., and 12 states levy their own estate taxes on decedents. These states are Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington.

The estate tax exemption amounts in the 13 locales vary widely from state to state, and most are far below the federal exemption. Only Connecticut has hiked its estate tax exemption amount to close to the current federal level.

Five states impose an inheritance tax. They are Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.

For more information, see our article on states with scary estate and inheritance taxes.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

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

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For some retirees living on a fixed income, making ends meet can be especially challenging when everyday costs are high, as they are now. Just a couple of months ago, data showed that gasoline prices were up 27.4% from a year earlier, while grocery and housing prices keep rising.

When affordability is straining your budget, keeping more of the income you already have can make a difference. Enter taxes: another cost retirees have long had to contend with.

As you likely know, not all retirement income is taxed the same way. Some income is fully taxable, some is partially taxable, and some can be excluded from your federal taxable income altogether.

Knowing which income is tax-free can help you make the most of your retirement money and keep more of it available for everyday expenses. Here's a look at five common types of retirement income the IRS won't tax.

Nontaxable income in retirement

This is not an all-inclusive list of types of income the IRS won't tax. It's merely a sampling, for educational purposes, of some common sources of retirement income.

Because every individual's financial circumstances are different, consult a trusted tax advisor or certified financial planner who knows your situation and can offer tailored guidance.

1. Life insurance proceeds

Although life insurance typically isn't considered retirement income in a traditional sense, a surviving spouse or other beneficiary may receive a payout that helps cover living expenses or supplement other income.

Important to know: Life insurance proceeds generally aren't taxable income when paid to a beneficiary after the insured person's death.

For example, if your spouse has a $500,000 life insurance policy and you receive the $500,000 death benefit after your spouse passes, you generally won't owe federal income tax on those proceeds.

But...there are exceptions. Interest paid in addition to the death benefit is generally taxable. Special rules can also apply if you transferred a life insurance policy for value.

2. Qualified Roth account withdrawals

Qualified withdrawals from Roth IRAs and Roth 401(k)s are tax-free.

That's a key advantage of Roth retirement accounts. You contribute money after paying income taxes on it, so you don't get an upfront tax deduction. In exchange, you generally don't pay federal income tax on qualified withdrawals in retirement.

• For a Roth IRA, withdrawals are generally qualified if you've met the five-year holding period and are at least 59½.
• The five-year period generally starts with the first tax year for which you made a Roth IRA contribution.
• Other qualifying circumstances include becoming disabled or dying.
• Roth 401(k) distributions are also tax-free when they meet the applicable requirements.

A simplified example: If you withdraw $30,000 from a Roth IRA in retirement and the distribution is qualified, that $30,000 generally isn't included in your taxable income.

Not every Roth withdrawal is automatically tax-free, though. If you take a nonqualified distribution, the earnings portion may be taxable and could be subject to a 10% additional tax.

3. Municipal bond interest

Interest from many municipal bonds is generally exempt from federal income tax.

• States, cities, and other government entities issue municipal bonds to help finance public projects.
• For retirees and others who want investment income, tax-exempt municipal bond interest can provide cash flow without increasing federal taxable income.

For example, if you receive $5,000 in tax-exempt interest from qualifying municipal bonds, that interest generally isn't included in your federal taxable income.

There are exceptions. For instance, interest from certain private-activity municipal bonds can be subject to the alternative minimum tax.

State tax treatment can also vary. Depending on where you live and which bonds you own, you could owe state or local income tax even when the interest is exempt from federal tax.

4. Part of some pension payments

If you contributed after-tax money to a pension or annuity, you generally don't have to pay income tax again on the portion of your payments that represents your original investment.

This situation is more common with certain traditional pensions and annuities than with Social Security benefits or retirement accounts. The IRS generally refers to the after-tax portion as your "investment in the contract."

For example, suppose you contributed $50,000 of after-tax money toward a pension. When you begin receiving payments, you generally won't pay income tax on the portion of each payment that represents a return of that $50,000. The remaining taxable portion is generally included in your income.

The IRS has rules for determining how much of each payment is taxable and how much is tax-free. Depending on when your pension began and the type of annuity or pension you have, different calculation methods may apply.

So don't assume that your entire pension check is taxable simply because it comes from a traditional pension. Check your plan documents and tax forms (and/or consult a tax attorney) to determine whether you have an after-tax investment in the pension.

5. At least 15% of Social Security benefits

Up to 85% of your Social Security benefits can be subject to federal income tax, but the taxable amount depends on your income.

The IRS uses a measure called “combined income” to determine how much of your benefits, if any, is taxable. Generally, it includes your adjusted gross income, tax-exempt interest, and half of your Social Security benefits.

For 2026, your benefits generally are tax-free if your combined income is less than $25,000 for single filers or $32,000 for married couples filing jointly.

Above those thresholds, up to 50% of your benefits may be taxable. And as mentioned, at higher income levels, that figure can rise to 85%.

Another important consideration: Withdrawals from a traditional IRA or 401(k) can increase your combined income and may make more of your Social Security benefits subject to tax.

And...Under the 2025 Trump tax law, eligible taxpayers age 65 and older can claim an additional "senior bonus deduction" of up to $6,000 per person for 2025 through 2028. The deduction is subject to income limits and can reduce federal income tax owed, but it doesn't change the rules for determining whether Social Security benefits are taxable.

State taxes on retirement income

Federal and state tax rules can vary for retirement income. Income that isn't taxed by the IRS may still be subject to state tax, since states often have their own exemptions or deductions for retirement income.

• For example, nine states don't impose an individual income tax.
• Other states may exempt Social Security benefits but tax some or all pension income, traditional IRAs, 401(k)s, or other retirement accounts.
• Some also provide special deductions or exemptions for older taxpayers or for certain types or amounts of retirement income.

State retirement taxes can make a significant difference if you're considering where to retire. But don't judge a state's tax burden based solely on whether it has an income tax. As Kiplinger has reported, property taxes, sales taxes, estate and inheritance taxes, and other state and local levies can affect your overall cost of living.

If you're comparing states for retirement, look at how each one would tax your specific mix of income and assets, rather than relying on a state's reputation as being "tax-friendly" for retirees.

Retirement taxes: Bottom line

If you're worried about taxes eating into your retirement income, start planning before you need to take distributions. Traditional IRA and 401(k) withdrawals, for example, are generally taxable, as are many other common sources of retirement income, including interest, dividends, and capital gains.

Look at your expected income for the year and consider how a withdrawal, investment sale, or other financial decision could affect your overall tax picture. In some cases, it can help to spread income out when possible, rather than creating a large taxable-income spike in a single year.

As mentioned above, don't forget about state tax. If you're considering a move in retirement, compare the tax rules in the states you're considering based on your actual sources of income.

Related

• Types of Income the IRS Won't Tax in 2026
• Take Our Quiz: How Much Do You Know About Taxable Income?
• 5 Types of Gifts the IRS Won't Tax: Even If They're Big
• How All 50 States Tax Retirees

After years of advising families through the transition into retirement, I've noticed that one question comes up more than any other, and it rarely has anything to do with how much money someone has saved.

It's a short question with a complicated answer. "Will I be okay?"

People want to know if they can retire, how they would draw income if they did and what risks might derail a plan they've spent decades building. The size of the number in an account doesn't make that question go away nearly as often as people expect it to.

Why the question doesn't disappear as wealth grows

It's easy to assume this worry is mostly about how much someone has saved. In my experience, it isn't, not entirely.

Until someone feels secure about their ability to retire, that concern tends to crowd out almost everything else. Tax efficiency, legacy planning, giving — none of it feels urgent until the core question is answered.

Once that sense of security is in place, a different worry often takes its spot: "Am I doing the right thing?" More accounts, more complexity, more moving parts can start to feel harder to manage, not easier.

The question evolves rather than getting answered once and staying answered. Having clarity of how much you need in order to retire is different from knowing your balance. One is a number on a statement. The other is a plan for turning that number into cash flow you can count on, year after year, market up or down.

Until that plan exists, the worry doesn't go away, no matter how large the balance is.

The adviser who helped you build wealth may not be the one who helps you spend it

One pattern shows up constantly among people exploring a new adviser relationship: The person they've worked with did a genuinely good job growing their money. That was never really in question. What's in question is what comes next.

Growing a portfolio and spending it down are two different problems with two different risk profiles.

While someone is accumulating, market swings are mostly noise — contributions keep going in regardless of what the market did last quarter.

Once withdrawals begin, the math changes. Pulling money out during a down market can do lasting damage to a portfolio in a way that contributing during a downturn never would. That's a real, well-documented risk, sometimes called sequence of returns risk, and it's one that a lot of accumulation-focused advisers simply aren't built to manage — not because they lack skill, but because it's a genuinely different discipline.

As I put it to a colleague recently: "Clients don't just want strategy. They don't just want solutions and answers or benefits. They want execution. The moment we stop doing that, we're out of business."

That's worth sitting with, because it applies just as much to the retiree managing their own plan as it does to any adviser. A strategy that sounds right on paper doesn't mean much if there's no mechanism to carry it out, rebalance around it and adjust it as circumstances change.

A framework for answering the question yourself

Feeling OK isn't something you talk yourself into. It's the result of having real answers to a specific set of questions. Anyone approaching retirement, whether working with an adviser or not, should be able to answer each of these with some confidence:

1. The number. How much do you need to retire, based on your own spending, not a generic rule of thumb like "25 times your expenses"?

2. The income plan. How will savings convert into a reliable paycheck? Which accounts get tapped in what order and why?

3. Social Security timing. When should you claim, and how does that decision interact with taxes, spousal benefits and the rest of the plan?

4. Tax sequencing. What are the tax implications of how and when you withdraw from taxable, tax-deferred and tax-free accounts?

5. Medicare and health care. How does the timeline for Medicare enrollment intersect with the income plan, particularly around IRMAA thresholds?

6. Estate alignment. Does your estate plan still reflect what you want, or is it a document that was drafted once and never revisited as circumstances changed?

Individually, each of these is manageable. Stacked together, they're exactly the kind of complexity that keeps people lying awake doing math in their head instead of enjoying the retirement they worked for.

Why the plan matters more than the portfolio

Most financial firms are built to manage investments. Far fewer are built to walk someone through this specific set of questions and turn the answers into a coordinated plan, one that comes before the investment strategy is finalized, not after, so the portfolio is built to support a real income plan rather than the other way around.

That distinction matters because a good plan that sits in a drawer doesn't make anyone feel OK. A plan holds up only if someone is checking in on it: Adjusting the withdrawal rate after a down year, revisiting the tax strategy when the rules change, updating beneficiary designations after a life event. The plan is not a one-time deliverable — it's an ongoing process.

What resolution looks like

People who work through this successfully rarely describe the outcome in technical terms. They describe it in plain language: The picture got simpler. The jargon went away. They stopped guessing and started deciding.

That's really the goal of good retirement income planning. Not to make the topic sound more sophisticated, but to take a pile of accounts, tax questions and what-ifs and turn them into something a person can hold in their head clearly: A number, a plan for drawing income and a sense of what happens if the market has a bad year right when retirement begins.

If you've built real wealth but still find yourself uncertain about what retirement looks like day to day, that uncertainty is common, and it's solvable.

It usually isn't a sign that something has gone wrong. It's a sign that no one has walked you through the whole picture at once, and that conversation is worth having before retirement begins, not after.

Please see important disclosure information at opalwealthadvisors.com/disclosure.

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

As a nurse and now the CEO of a health company that serves older adults, I've spent decades around serious illness, aging and death. I've watched families make extraordinary decisions under impossible circumstances.

I've also seen something that still surprises people: Choosing hospice or palliative care isn't about giving up. Often, it's about focusing on what matters most.

Too many Americans believe there are only two choices at the end of life. You either go to battle by taking on every available treatment, or you surrender. This is one of the most damaging myths in healthcare.

There is another clear path. It's choosing peace.

Over the years, I've noticed that people facing the end of life often fall into one of three mindsets.

Some simply shut down. They withdraw from the world, becoming disconnected from the people and life around them.

Others fight relentlessly. Every new procedure, every hospitalization, every intervention becomes another struggle to postpone what they know is coming.

Neither approach is inherently wrong. Every person's journey is deeply personal.

But the people who leave the greatest impression on me are those who arrive somewhere in the middle. They say something like: "I've had a good life. I don't want to die, but I know death is part of life. I want to spend whatever time I have left being myself."

That isn't surrender. It's acceptance, which provides the clarity that many families desperately need.

Hospice and palliative care myths

About 2 million Americans on Medicare opt for hospice and palliative care every year, according to a report from the National Alliance for Care At Home, but the choice remains shrouded in misconception.

One of the biggest myths is that doctors stop caring. The opposite is true. Curative care focuses on defeating disease. Palliative care focuses on relieving suffering.

For people nearing the end of life, hospice shifts the goal from extending every possible day to making every remaining day as meaningful and comfortable as possible.

The question isn't whether medicine can do something, because modern medicine almost always can.

The better question is whether it should.

I've cared for people in their 90s with advanced dementia who undergo major surgery after a broken hip. Technically, the operation is successful. The X-ray looks perfect. But has the person recovered? Or have we simply repaired one body part while losing sight of the whole human being?

Medicine is remarkably good at treating diseases, but it can struggle to treat people.

That distinction matters.

Conversations to have now

The hardest conversations rarely happen between doctors and patients. They happen around kitchen tables. Adult children want one more treatment because they're afraid of losing mom. A spouse can't imagine saying no to another procedure. Old family conflicts resurface. Guilt enters the room.

Suddenly, decisions that should be about the people's wishes become tangled in everyone else's emotions.

I've seen families spend months arguing over what their loved one would have wanted because no one asked while they still could.

That's why these conversations should happen years before anyone needs hospice.

Seniors, you should tell your family what quality of life means to you. Put your wishes in writing. Explain where you draw the line between living longer and living well. Don't assume your children will somehow know. In a crisis, uncertainty almost always leads to conflict.

When families understand and accept a loved one's wishes, something remarkable often happens. The anxiety begins to lift. People stop guessing. They stop wondering if they're making the wrong decision. They can focus on being daughters and sons instead of decision-makers, spouses instead of advocates, grandchildren instead of witnesses.

They can simply love each other.

I also believe we need to change how we talk about hospice itself.

Far too many people arrive there only in the last days of life. By waiting so long, they miss many of the services that make hospice so valuable, such as expert pain management, emotional support, spiritual care if desired, social workers who help families navigate difficult decisions, and bereavement resources that continue after a loved one dies.

Hospice isn't about hastening death. It's improving life when time is limited.

In my experience, families almost never tell me they started hospice too early. Much more often, they tell me they wish they'd accepted the support months sooner.

A good ending

None of this means curative care is the wrong choice. If treatment offers a realistic chance to restore meaningful health or aligns with a person's goals, pursuing it can be exactly the right decision. The goal isn't to replace curative medicine with palliative care — it's to recognize the moment when the purpose of care changes.

Every life reaches that moment differently.

What I hope families remember is this: The measure of a good ending isn't whether we exhausted every possible medical intervention. It's whether we honored the person's wishes, reduced unnecessary suffering and gave them the chance to remain themselves for as long as possible.

In healthcare, we often celebrate fighting.

I think we should also celebrate wisdom.

Sometimes the bravest decision a family can make isn't choosing one more treatment. It's choosing one more meaningful conversation. One more story. One more shared meal. One more peaceful afternoon holding hands instead of sitting in another waiting room.

Choosing hospice isn't choosing death.

Sometimes, it's choosing how to live until the very end.

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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 the Centers for Medicare & Medicaid Services (CMS) ended subsidies for Part D premiums in August, 56.1 million Medicare Part D beneficiaries were left unsure as to what would happen to their monthly premiums. Among them are 24.1 million original Medicare enrollees and 3.4 million Advantage members who buy stand-alone drug coverage — plus 28 million who receive coverage through a bundled Medicare Advantage with drug coverage plan (MA-PD).

CMS addressed this in a recent statement, noting "encouraging signs that, as expected, the Part D program is returning to normal market conditions." CMS projects the average total monthly premium for stand-alone Part D plans will rise by less than $1 — from $35.09 in 2026 to $36.00 in 2027. Keep in mind these are averages; unlike federally set Part B premiums, private insurers ultimately set the prices for Part D plans.

However, for 2027, Medicare beneficiaries will have a higher out-of-pocket maximum of $2,400 (up from $2,100) and will face a higher maximum deductible of $700, a $75 increase from 2026.

CMS touts stable and lower premiums for 2027

Despite concerns that there would be sharp rate hikes following the end of federal intervention, CMS attributes the modest $1 increase to the Part D market naturally re-establishing equilibrium and returning to normal competitive conditions.

CMS announced in August the discontinuation of the voluntary Part D Premium Stabilization Demonstration Project. Originally introduced to smooth pricing shifts following major structural changes under the Inflation Reduction Act — such as the out-of-pocket spending cap — the demonstration program provided direct temporary government subsidies to insurers. CMS maintains that the market no longer requires these multi-billion-dollar backstops to keep consumer costs manageable, pointing to low baseline rates as proof that insurers have adjusted their pricing models sustainably.

“CMS is fighting to keep high-quality care options affordable and accessible for the millions of beneficiaries who rely on Medicare Advantage and Part D prescription drug plans,” said CMS Administrator Dr. Mehmet Oz.

CMS also highlighted stronger price drops across integrated coverage options. For Medicare Advantage plans that include prescription drug coverage (MA-PD), the average monthly Part D premium component is projected to fall by 38%, dropping from $11.32 in 2026 to $7.00 in 2027 after applying MA rebates. CMS also noted that 88% of non-low-income beneficiaries will have access to a basic stand-alone Part D plan for $10.30 or less per month, with 93% having access to an enhanced plan option under $6.00.

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The Great Wealth Transfer is already underway, with trillions of dollars expected to pass from one generation to the next over the coming decades.

But most Americans spend more time planning a family vacation than working on their personal finances, and the amount of time they spend on their wealth transfer is even less.

In my experience, this oversight can have lasting consequences. Here are the biggest estate planning mistakes I try to help my clients avoid.

Not preparing your heirs

Wealth is a powerful tool for creating a legacy. But if you're assuming it will be a wonderful windfall that sets your family up for success after you die, you may be unpleasantly surprised. According to research from the Williams Group, 70% of wealthy families lose their wealth by the second generation, and 90% lose it by the third.

I've found that heirs are often better prepared for wealth when they develop accomplishments and confidence that are independent of family wealth. The goal isn't to make life difficult for your children, but to help them build the skills and judgment they'll need to manage opportunities responsibly.

Unfortunately, more than half of parents ages 55 and older surveyed by Morning Consult for Kiplinger say they rarely or never discuss money with their children.

That's why I encourage families to hold regular conversations about the purpose of their wealth. This doesn't have to mean disclosing every dollar. It's about helping the next generation understand how wealth was created, what responsibilities come with it and what role it should play in their lives.

The biggest gift you can leave for the next generation is clarity and financial confidence, and you can't do that if you don't talk to them.

You shouldn't be the only one talking to your children about money, however. It's hard to be a prophet in your own land, and one lesson I've learned as an adviser and parent is that children don't always take advice from those closest to them.

Sometimes they'll hear the exact same message from a trusted mentor, adviser or family friend and view it completely differently. Create opportunities for younger generations to learn from people who have good judgment and strong values.

Failing to formalize your plan

Legal processes need to be followed to ensure assets are transferred the way you want. It's always shocking to me how so few people have a will or trust. A Guardian study found that about half of high-net-worth individuals don't currently have a will.

I've seen estate disputes strain family relationships for years. In some cases, siblings stop speaking to one another because expectations were never clearly documented or communicated. If you've spent a lifetime building wealth, take the time to preserve family harmony by ensuring everyone understands your intentions before difficult questions arise.

Not protecting your wealth

A will or trust determines where assets go. Asset protection helps ensure they're still there when the time comes to transfer them. In this litigious world, asset protection is essential to protect people from lawsuit creditors and anyone else trying to separate you from your money.

Unexpected legal claims or liabilities could reduce the wealth you're hoping to pass on. I often tell clients they need a moat around their castle. I've seen many people's life's work wiped out by a judgment, regulatory issue or divorce.

Irrevocable trusts are a way to protect your assets. These types of trusts can shield your assets from lawsuits. Depending on your circumstances, they may also be able to lower your estate and income taxes.

Waiting until you're gone to make an impact

Many people assume wealth transfer is something that happens after they die. In reality, some of the most meaningful transfers happen while you're still alive to experience the benefits firsthand.

I've seen such joy in parents and grandparents when they get to see how their money benefits their offspring. It's also incredible to be so fortunate that you can give your money to places and causes you believe in and be able to see its impact while you're alive. This is why I encourage some of my clients to not wait until they're gone to give.

People are living longer these days. If you're 99 when you pass, your kids may be in their 70s and already retired. But in their 30s, 40s and 50s, your kids may be starting families, buying houses, building businesses and putting their kids through school. Transferring money at this point can provide far greater value.

Focusing on the "how" before the "who"

Everybody asks "how?" I think the better question is "who?"

• Who are the advisers helping you make estate planning decisions?
• Who is educating the next generation?
• Who is collaborating to help ensure every piece of your plan works together?

Transferring wealth requires a team, and the quality of your team determines the quality of your outcomes. I like to call this your "kitchen cabinet," meaning the group of people you trust enough to give you the right advice when you need it most.

You don't want five great professionals working independently. You want the right professionals working together. The families who navigate these transitions most successfully tend to have financial advisers, attorneys and tax professionals operating as a coordinated team.

Wealth transfer is about far more than passing down assets. It's about passing down opportunities, values and a vision for the future. With thoughtful planning, open communication and the right team of professionals guiding the process, your wealth can become a lasting legacy that benefits generations to come.

In my experience, the families that transfer wealth most successfully treat inheritance as a conversation, not an event.

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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 retirees and pre-retirees, the question has shifted, from "How do I grow my wealth?" to "How do I sustain, protect and distribute it tax-efficiently?"

Over the past few years, technological advancements in the investment world have ushered in a new era of flexibility and control.

As a financial planner and owner of Alpha Planning, I find that direct indexing and tax-loss harvesting have become strategies that I'm discussing regularly — often with clients who have brokerage accounts over $250,000 and are keen on managing their retirement tax outcomes.

What is direct indexing — and why is it different?

Most investors have grown comfortable with index funds: Buy an S&P 500 ETF, and you get hundreds of companies with one click. But direct indexing lets us go one step further.

Instead of holding shares of a fund, we own the individual stocks that make up an index, opening up far more opportunities for customization and tax optimization.

To illustrate: Imagine your portfolio is like a chef's kitchen. Index funds are the meal kit — pre-packaged, efficient and predictable.

But direct indexing is the custom kitchen, stocked with individual ingredients that let you adjust every dish to your taste. You can swap one item for another, season to your preferences or craft a meal that's uniquely yours.

This flexibility is invaluable when managing taxes and making strategic choices.

And it's not just theoretical. Our team consistently averages 1% to 1.5% of tax alpha each year in nonqualified accounts simply by trading stocks strategically — that's above and beyond any market performance.

"Tax alpha" is a measure of how much additional money you keep by lowering your tax bill, and this alpha accumulates year after year, resulting in thousands of dollars in additional value for our clients over time.

The capital gains budget: A smarter, more strategic tax plan

One concept that has become the backbone of many retirement conversations is the capital gains budget. Think of it as an annual spending plan for your realized gains: How much can you afford to distribute before tipping into higher tax brackets or triggering additional Medicare IRMAA premiums?

Intentionally setting a capital gains budget creates room to coordinate other income strategies — like Roth conversions — without crossing those crucial thresholds.

Direct indexing allows for precise control of:

Tax-loss harvesting. By tracking individual positions, we can harvest losses throughout the year, offsetting gains and smoothing out your tax bill.

Roth conversions. Loss harvesting frees up "space" in your tax bracket so you can convert more IRA assets to Roth at preferable rates and accelerate tax-free growth without impacting IRMAA.

IRMAA management. Staying under IRMAA cutoffs means keeping your Medicare premiums as low as possible.

Flexible withdrawals. Harvested losses don't just help in a single year — they often carry forward, providing valuable flexibility for withdrawals in later retirement years. This can help ensure you're less likely to trigger excessive taxes when accessing your investment accounts for future needs, often when long-term care comes into view.

A case from my desk: Linda and Bob's retirement tax playbook

Earlier this year, I met with Linda and Bob, a couple who'd recently retired with $3 million in investable assets. Their challenge: To maximize after-tax retirement income, minimize surprises and plan for their family's future.

With direct indexing in their taxable account, we harvested $75,000 in losses over the first two years of the strategy.

This loss harvesting became essential to keeping their capital gains budget on track — allowing us to convert IRA dollars to Roth while staying under Medicare IRMAA thresholds and AGI limits.

It also provided the flexibility to help fund a second home purchase without affecting their IRMAA and Roth conversion strategy thanks to the carry-over losses we had helped accrue.

The payoff? Linda and Bob enjoyed predictable Medicare premiums, more tax-free growth, more flexibility for future withdrawals and an estate strategy ready for the next generation.

Their story is a perfect example of how intentional planning — not just reacting to market swings — translates into tangible, lasting benefits.

Who benefits most?

Direct indexing and a capital gains budget aren't only for ultra-high-net-worth investors. If you have a brokerage account over $250,000 and want to take control of your retirement tax plan, these strategies could be your missing link.

They offer proactive ways to personalize your financial plan, prepare for future legislative changes and put more money to work for you.

Key takeaways

• Direct indexing brings customized flexibility — think of it like a custom-made mutual fund — you have control over when to buy and sell, not the mutual fund or ETF
• Tax-loss harvesting is more powerful when you own individual stocks
• Setting a capital gains budget helps coordinate Roth conversions and manage Medicare costs
• Strategic trading generates tax alpha — on average 1% to 1.5% per year — which compounds into substantial long-term benefits
• Harvested losses create flexibility for withdrawals in future years, helping minimize taxes as retirement unfolds — especially when future needs like long-term care arise

Final thoughts

Retirement is about more than investment returns — it's about controlling what you can and planning with intention.

If you haven't reviewed your capital gains budget or explored direct indexing, now's a good time to sit down with your adviser and ask the tough questions.

In my experience, the confidence that comes from a well-structured, tax-smart retirement plan is the most valuable asset you can own.

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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.