There is a rare kind of magic in seeing New York City during the holidays through the eyes of your grandchildren — especially when every detail feels personal. From private after-hours access at iconic flagship stores to front-row seats at world-class holiday traditions, a splurge on a multi-generational getaway creates memories that will last for decades.

If you are ready to trade holiday stress for seamless white-glove hospitality and festive charm, this four-day luxury itinerary offers an unforgettable seasonal getaway for the whole family.

Day 1: Arrival & the Rockefeller Center Tree Experience

Whether you are in town for the official lighting or visiting during December, start your trip with one of two ultra-luxury tree traditions:

On Tree Lighting Night (Dec 2): Official tree lighting gala

Evening: Bypass the city's street closures with credentials into an official indoor viewing gala at 45 Rockefeller Center. Enjoy a climate-controlled suite overlooking the plaza, gourmet catering, curated entertainment for kids, an open bar for adults and private cordoned-off access steps from the tree as the 50,000 lights flicker on. Individual tickets cost $1,557.62, admission for four is $5,195.49 and a private skybox that can accommodate up to eight is $12,942.62.

Another luxury option is Radio Park, the rooftop terrace above Radio City Music Hall, with private cordoned-off access via steps from the tree as the 50,000 lights flicker on. The cost to attend? A seat at a reserved shared table is $1,999 per person, while a private table for up to 8 is $15,192.00.

Post-Lighting: Holiday VIP Rock Pass and Après-Skate chalets

Evening: Arrive at 30 Rock through the private VIP Lounge for the Holiday VIP Rock Pass for $300 per person. After you skip the line, a dedicated host takes your family on a private tour featuring closed-door access directly under the tree for the official family photo, followed by a private champagne toast (for the grandparents) in a hidden rooftop garden overlooking the Saks Fifth Avenue Light Show. You also get access to a private "Beam Experience" at the Top of the Rock.

Afterward, step into a heated, private Après-Skate Alpine chalet or lodge directly beside The Rink for private family dining, hot cocoa and front-row views of the illuminated tree overhead.

Day 2: Wollman Rink VIP chalet and the Madeline Tea Party at The Carlyle

Morning: Enjoy the historic ice rink in Central Park surrounding the Manhattan skyline without dealing with standard lines or crowded changing areas. Reserve a Private VIP Igloo overlooking the ice at Wollman Rink for about $550. The heated private space includes personal skate fitters, concierge service, gourmet hot chocolate, hot cider and catered treats.

Optional: You can also book private skating lessons before public opening hours for some exclusive family skating.

Afternoon: Walk up Fifth Avenue to The Carlyle for Madeline's Tea Party at Bemelmans Bar. Enjoy festive high tea surrounded by original hand-painted murals from Madeline creator Ludwig Bemelmans, with pianist and singer-songwriter Tina deVaron performing lively, family-friendly holiday sing-alongs.

Evening: Stroll three blocks north of The Carlyle for dinner at Serafina Fabulous Pizza on Madison Avenue. The restaurant balances quintessential Upper East Side polish with a relaxed, family-friendly atmosphere and offers a mix of comfort favorites for the grandchildren and refined classics for the grandparents.

Day 3: Santa’s Breakfast Spectacular at Radio City and FAO Schwarz Toy Soldier dinner

Morning & Afternoon: Attend the Christmas Spectacular Starring the Radio City Rockettes at Radio City Music Hall with Santa's Breakfast Spectacular. Your group will enter through a private, historic entrance into the exclusive Roxy Suite (the former private apartment of theater founder Samuel "Roxy" Rothafel).

Enjoy a festive pre-show breakfast reception with an appearance by Santa Claus, a private meet-and-greet with two Rockettes for photos and autographs and premium orchestra seating in the first few rows, for $800 per person.

Evening: Cap off the day with the exclusive FAO Schwarz Toy Soldier dining & private shopping experience. This 2.5-hour experience for up to 8 guests is $6,750. Your family will enjoy a private after-hours feast right inside the legendary flagship store at 30 Rockefeller Plaza.

Hosted by an iconic FAO Schwarz Toy Soldier, this event includes a private in-store dinner, a magic show, and crowd-free access to the store's interactive toy stations. Guests can also arrange a visit from Santa and opt for home delivery on all purchases.

Day 4: Private Jim Henson VIP Tour and Cocoa & Carols Holiday Cruise

Morning: For fans of The Muppets, Sesame Street, and Fraggle Rock, the Jim Henson Exhibition at the Museum of the Moving Image in Astoria offers a dedicated look at Jim Henson’s creative legacy.

Take private luxury car service to Astoria’s Museum of the Moving Image for an exclusive, before- or after-hours VIP tour. Led by a museum educator, the private experience accommodates up to 20 guests for $1,000.

The grandkids can explore nearly 50 original puppets — including Kermit the Frog, Miss Piggy, Big Bird, and Elmo — alongside character sketches, historic camera rigs, and interactive puppetry stations.

Late Afternoon: Relax on the Cocoa & Carols Holiday Cruise. You'll board an enclosed, heated 1920s-style yacht for a private-table holiday cruise down the Hudson, taking in harbor views of the Statue of Liberty with live carols and warm holiday drinks. This 1.5-hour cruise costs from $98 to $132 per person.

Evening: Farewell dinner at The Grill in the Seagram Building. It offers mid-century theater and tableside preparation, featuring prime rib carved to order and flaming Baked Alaska. It feels refined and celebratory for grandparents while captivating kids with the theatrical service.

Making memories

When the festive lights dim and the suitcases are packed, the true gift of a luxury NYC holiday isn't just the VIP seats or private tours — it is the look of total delight on your grandchildren's faces that stays with you forever. By curating a celebration filled with private access, cozy family moments and timeless city traditions, you’ve given them more than a grand getaway; you’ve given them memories they’ll talk about for years.

Here’s to a season filled with warmth, wonder and the joy of celebrating together.

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For decades the message to American workers has been consistent: Contribute to a 401(k), capture the match, leave it alone.

Millions did exactly that, rolling old plans into IRAs and sitting through three or four bear markets to build the balances pensions used to provide.

Then, somewhere in their early 70s, the rules changed. The account they spent a career filling comes with a withdrawal schedule they didn't write. That's the paradox of required minimum distributions (RMDs).

The better you are at saving inside a tax-deferred account, the more likely your RMD becomes a tax problem rather than a paycheck.

Calculate your first RMD now, even if it's a decade away

RMDs generally begin at 73 for people born from 1951 through 1959, and at 75 for those born in 1960 or later. (PDF) You don't have to wait to see the number. Take your current traditional IRA and 401(k) balances, divide by 26.5 (the IRS Uniform Lifetime Table factor for age 73), and you have a working estimate of your first required distribution: roughly 3.8% of the balance.

On $2 million, that's about $75,000 of taxable income in your first RMD year, whether you spend it or not.

Then do the second half of the math, which most people skip. Write down what you actually need each year, and subtract. A retiree who needs $80,000 and is required to take $120,000 isn't $40,000 richer; the surplus lands in a brokerage account, and the tax return counts it as income anyway.

That gap is the number to manage, and it widens with age. The table factor falls to 12.2 by 90, so the same balance throws off about 8.2% a year instead of 3.8%.

Find out which threshold you'll cross first, then aim below it

Rather than tracking every rule, identify the one that catches you soonest. Put your projected income at RMD age next to these four numbers and see which is closest:

• $44,000 joint, $34,000 single. Above that combined income, up to 85% of your Social Security is taxable. The lower tier starts at $32,000 and $25,000. These base amounts are fixed in statute rather than indexed, so a rising RMD walks you up the scale permanently.
• $150,000 joint, $75,000 single. Above that modified adjusted gross income, the new deduction for older adults starts to phase out: An extra $6,000 per person 65 and older, or $12,000 for a couple in which both qualify, available for 2025 through 2028. It's the threshold most retirees don't yet know exists.
• $218,000 joint, $109,000 single. Cross it, and your Part B premium goes from $202.90 a month to $284.10, plus a Part D surcharge. Call it $975 per person for the year.

The action item is narrower than it sounds: In any year you control your income, target a number just under the nearest threshold instead of trying to minimize taxes generally. Coming in $2,000 under $218,000 is worth more than shaving $2,000 off a bracket in the middle of a range.

Watch the calendar at 63, and take your RMD before you convert

The Medicare surcharge runs on a two-year lookback, set from the return filed two years earlier. That makes age 63 a real deadline: the income you report that year determines your premium at 65.

If a large Roth conversion or a property sale is coming, doing it at 62 rather than 63 can keep it out of the calculation entirely.

Roth conversions are the main tool for shrinking future RMDs, since Roth IRAs aren't subject to distributions during the original owner's lifetime. But the conversion is taxable income in the year you do it, so it can trip every threshold above. Two rules make it manageable.

• First, size the conversion to a threshold, not to a goal: "convert as much as possible" is how people buy themselves a surcharge.
• Second, once you're subject to RMDs, take the distribution before you convert, because an RMD isn't eligible for rollover or conversion.

If you give to charity, donate from the IRA instead of your checkbook

In 2026 you can direct up to $111,000 per person from an IRA to a qualified charity as a qualified charitable distribution, available from age 70½, counted toward your RMD, and excluded from income rather than deducted.

The exclusion is the point: Because the money never enters your adjusted gross income (AGI), it doesn't push you toward the thresholds above, which a cash donation and a deduction won't do for you.

Two mechanics matter. The transfer has to go directly from the custodian to the charity, and donor-advised funds don't qualify. Tell your custodian in the fall, not in late December.

Run the survivor's tax return before you need it

Take this year's income and refile it mentally as a single taxpayer: one Social Security benefit instead of two, single brackets and Medicare thresholds at half the joint amounts. The IRA balance and the RMD barely change when a spouse dies, so the survivor often pays a higher rate on less income.

If that exercise moves the survivor into a higher premium tier, you've found a concrete argument for converting more now, while joint brackets and joint thresholds are still available. That's a decision to make in your 60s, not a discovery to make in your 80s.

A $3 million IRA looks better than $2 million on a statement. But if the larger balance produces bigger forced distributions, more taxable Social Security and higher Medicare premiums, the balance alone doesn't tell you much.

The 401(k) generation was measured on what it could accumulate. In retirement, the number that matters is how much of it you keep.

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• Got $2.5 Million Saved for Retirement? Here Are the Huge RMDs You Must Take at 73, 75, 80 and 85
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
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• 5 Costly RMD Mistakes That Will Put a Dent in Your Savings (and How Early Planning Can Help)

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

You spend most of your working life answering one retirement question: Am I saving enough?

Then you retire, and the questions change. Where will your monthly income come from, and which accounts should you tap first? How much should you set aside for taxes? When should you claim Social Security? What happens if the market drops right after you retire?

I've worked with plenty of people who spent years preparing financially for retirement but hadn't thought nearly as much about how they would manage their money once they got there.

Your first year of retirement is when you start getting some of those answers. Here are five decisions I'd focus on.

1. Decide where your retirement paycheck will come from

For most of your career, money showed up in your checking account every couple of weeks. In retirement, you're responsible for creating that paycheck yourself.

Start with how much you need to cover your regular expenses each month. Subtract Social Security and any other reliable sources of income, such as a pension. What's left is the amount you'll need to cover from savings and investments.

Then decide where that money should come from. You might have cash savings, a taxable brokerage account, a traditional IRA or 401(k) and Roth accounts. Withdrawing $50,000 from one of those accounts instead of another can have very different tax consequences.

Withdrawals from traditional retirement accounts are generally taxed as ordinary income. In a taxable brokerage account, you generally owe tax only on realized gains, not the entire amount you sell. Qualified Roth withdrawals are tax-free.

There's no withdrawal order that works for everyone. In some years, it might make sense to use more from a taxable account. In others, deliberately taking money from a traditional IRA could make sense.

If your income is lower in the years between retiring and claiming Social Security, for example, deliberately taking IRA withdrawals or carrying out Roth conversions could reduce future required minimum distributions (RMDs) and give you more control over taxable income later.

Boldin's retirement planning tool can help you compare different withdrawal strategies side by side and see how each one affects your taxes and how long your savings last. (Note: I'm head of support and a financial planning educator for Boldin.)

The important part is having a reason for where the money is coming from, rather than withdrawing from whichever account happens to be most convenient.

Once you've decided, you can set up regular transfers to your checking account. Many retirees like keeping the same rhythm they had while working, with a set amount arriving each month.

2. Figure out your new tax routine

Taxes can be one of the bigger adjustments during the first year of retirement.

While you're working, your employer withholds taxes from each paycheck. Once you retire, you may have several sources of income, each with different tax treatment and withholding options:

• Pension income and withdrawals from pretax retirement accounts are generally taxable
• Investment income and realized capital gains can add to your tax bill
• Depending on your other income, up to 85% of your Social Security benefits may be taxable at the federal level

You still need to pay taxes throughout the year. That might mean withholding from pension payments or IRA distributions, making estimated tax payments or using a combination of the two.

Pay particular attention if you retire partway through the year. Someone who retires in June might have six months of salary, a bonus or unused vacation payout, followed by retirement account withdrawals for the rest of the year. Add Social Security or investment income and that first tax year can look very different from the years that follow.

That higher income can also show up later. Medicare premiums are based on your income from two years earlier, so a big income year can mean IRMAA surcharges once you're on Medicare. Retirement or a reduction in work can qualify as a life-changing event, however, so you may be able to ask Social Security to base the surcharge on your more recent, lower income.

Estimate your tax liability before the end of the year. It's much easier to adjust your withholding or make an estimated payment than to find out the following April that you significantly underpaid. Taxes withheld from an IRA distribution are generally treated as paid evenly throughout the year, so a withdrawal late in the year can help cover a shortfall.

Once you've filed your first tax return as a retiree, review it. You'll have a much better picture of how your new sources of income are actually being taxed.

3. Decide when Social Security should start

Your retirement date doesn't have to be your Social Security claiming date, and treating them as the same decision can be expensive.

The difference in monthly income is significant. For anyone born in 1960 or later, full retirement age is 67. Someone with a $2,000 monthly benefit at 67 would receive about $1,400 by claiming at 62, or about $2,480 by waiting until 70. Because benefits are adjusted for inflation each year, that gap tends to widen in dollar terms over a long retirement.

If you retire before 70 and have enough savings to cover your expenses, you have a real choice. You could claim now and withdraw less from your portfolio. Or you could draw more from savings in the early years and let your benefit keep growing. Delaying can also create a window of lower-income years that works well for the Roth conversions and bracket planning covered earlier.

For married couples, this is a household decision. When one spouse dies, the survivor keeps the larger of the two benefits. That means the higher earner's claiming age affects not just their own income but how well the other spouse is protected later, potentially for decades.

A few first-year details are worth knowing:

• If you claim before full retirement age and retire partway through the year, a special monthly rule may let you receive full benefits for months you're no longer working, even if your earlier salary exceeded the annual earnings limit.
• If you claim and then change your mind, you can withdraw your application within 12 months. You'll have to repay what you received, and you can only do this once.
• If you've already reached full retirement age, you can voluntarily suspend your benefit to earn delayed retirement credits.

Health, longevity and cash flow all belong in this decision. What shouldn't drive it is timing alone. Claiming the month you retire shouldn't be an automatic decision. Run the numbers first.

4. Decide how you'll cover healthcare

For many people, health insurance is the biggest open question when they leave work. How you handle it depends largely on whether you retire before or after 65.

If you retire before 65, you'll need coverage to bridge the gap until Medicare. Common options include retiree coverage from a former employer, joining a working spouse's plan, continuing your employer plan through COBRA or buying a plan through the Affordable Care Act marketplace.

COBRA keeps your current coverage in place, but you'll generally pay the full premium yourself, which can come as a shock.

Marketplace coverage ties directly back to your withdrawal strategy because premium tax credits are based on your household income. Taxable traditional IRA withdrawals, Roth conversions and realized capital gains can all increase that income. The accounts you draw from in those early years can meaningfully change what you pay for health insurance.

If you're 65 or older, Medicare becomes the center of the decision. Your initial enrollment period runs for seven months around your 65th birthday. If you don't have qualifying coverage from current employment, missing it can lead to late enrollment penalties that last as long as you have Medicare.

This applies even if you've delayed Social Security, since enrollment in Medicare won't happen automatically in that case.

Ask yourself:

• What will my premiums, deductibles and out-of-pocket costs realistically add up to each year?
• If I'm choosing Medicare, do I want original Medicare with a Medigap and Part D plan, or a Medicare Advantage plan?
• Do I have health savings account (HSA) money I can use for qualified medical expenses?

Whichever route you take, ensure you're building healthcare into your budget as its own line item.

5. Decide what you'll do during a bad market

A market decline feels different when you're retired and withdrawing money from your portfolio.

Say you retire with $1 million and plan to withdraw $50,000 during your first year. Then a significant market decline occurs, and your portfolio is down to $850,000. You still need money to live on, but now you're taking withdrawals from a smaller portfolio. Selling investments after they've fallen also leaves less money invested to participate in a recovery.

Poor returns early in retirement can be particularly damaging when combined with ongoing withdrawals. This is known as sequence of returns risk, and it's worth planning for before it happens.

Ask yourself:

• How much of my near-term spending do I want in cash or other relatively stable investments?
• Which assets will I sell to fund withdrawals, and can those sales also help rebalance my portfolio?
• Which of my expenses are actually flexible?

Housing, utilities and groceries probably aren't going away because the market had a bad year. A major vacation, new car or large home project might be easier to delay.

You don't need to change your spending every time the market falls. Having some flexibility just gives you more options if a significant downturn happens early in retirement.

Replace assumptions with real numbers

A retirement plan you build while you're working is based largely on assumptions about a life you haven't lived yet. Your first year is when those assumptions start meeting reality.

After six months or a year, compare your actual spending with what you planned. Don't worry too much about individual months. Look for patterns.

If you planned to spend $80,000 a year and you're on pace to spend $95,000, figure out what's driving the difference. If you're consistently spending less than planned, you may have more room than you thought.

Look beyond spending, too:

• Are your taxes coming in where you expected?
• Are your withdrawals and cash reserves holding up?
• Are healthcare costs in line with your budget?
• If you delayed Social Security, does that decision still make sense?

Then update your plan with the real numbers and see whether you're still on track. If you're not, catching it after the first year gives you far more options than discovering it several years later.

Related Content

• 3 Options for Setting Up Your Retirement Paycheck: Choose the One That Suits You
• Five Mistakes to Avoid in Your First Year of Retirement
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• Retirement Milestone Ages Most People Miss (And What to Do About Each One)
• I'm a Financial Planner: These 4 Spending Mistakes Can Derail Your Retirement Plan

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

For decades, the standard retirement playbook has been simple: Max out your traditional 401(k), take the upfront deduction and let the IRS wait. Watching your taxable income shrink feels like an immediate win.

But follow that path for 30 years and you may arrive at retirement with an unwelcome discovery. A portfolio that is almost entirely pretax isn't just a nest egg. It's an income tax bill in waiting, and you don't get to decide when it comes due.

I see this pattern often among successful savers. The problem isn't that they saved too little. It's that they saved in only one kind of account.

How a pretax nest egg becomes a tax trap

Every dollar you withdraw from a traditional 401(k) or IRA is taxed as ordinary income. Once required minimum distributions (RMDs) begin, at 73 for most of today's retirees and 75 for those born in 1960 or later, the IRS no longer waits for your permission.

Consider a married couple, both 75, with $4 million in traditional IRAs. Their RMD comes to roughly $163,000. Add $80,000 in Social Security benefits, up to 85% of which becomes taxable, and their modified adjusted gross income lands around $230,000. That's above the $218,000 threshold that triggers Medicare's IRMAA surcharges in 2026, raising Part B and Part D premiums for both spouses.

If one spouse dies, the RMDs keep coming, but the survivor files as single, with narrower brackets and an IRMAA threshold of just $109,000. This "widow's penalty" hits pretax-heavy portfolios hardest.

Heirs feel the pressure too. Since the SECURE Act eliminated the "stretch IRA" for most non-spouse beneficiaries, heirs generally must empty an inherited IRA within 10 years. A child who inherits a $1.5 million IRA at 50 could add $150,000 or more to their taxable income each year, right in their peak earning years.

The goal isn't to minimize taxes this year. It's to minimize them over your lifetime, and sometimes that means paying a bit more now to avoid paying far more later.

The case for three tax buckets

Because no one can reliably predict future tax brackets, markets or policy, the more durable approach is tax diversification: Spreading savings across three buckets.

Tax-deferred accounts, such as traditional 401(k)s and IRAs, lower your tax bill during peak earning years. Later withdrawals are taxed as ordinary income.

Taxable accounts, including individual, joint and trust brokerage accounts, are funded with after-tax dollars. They offer flexibility, with no early-withdrawal penalties, long-term capital gains rates and a step-up in cost basis for heirs.

Tax-free accounts, namely Roth IRAs, Roth 401(k)s and health savings accounts, are funded after tax, but qualified withdrawals are tax-free. Roth accounts carry no RMDs for the original owner, and heirs inherit them income-tax-free.

Holding all three gives you something a single-bucket strategy can't: Control. In the years between retirement and claiming Social Security, you can draw from pretax accounts deliberately, filling lower brackets without spilling into higher ones.

Large purchases get easier, too. If you're in the 24% federal bracket and need $100,000 for a new roof, you'd have to withdraw roughly $132,000 from a traditional IRA to net that amount after federal tax, which could push you into an IRMAA tier. Blending the withdrawal across all three buckets keeps both your effective rate and your Medicare premiums in check.

What I tell savers to do now

Split your contributions. If your employer plan offers a Roth 401(k), consider directing a portion of your contributions there. The 2026 employee limit is $24,500 across traditional and Roth combined. Starting this year, workers 50 and older who earned more than $150,000 in FICA wages the prior year must make catch-up contributions on a Roth basis, so many high earners are getting a Roth bucket whether they planned for one or not.

Use the back door. Direct Roth IRA contributions phase out in 2026 between $242,000 and $252,000 of modified AGI for joint filers ($153,000 to $168,000 for single filers). Above that, a backdoor Roth IRA remains available, and if your 401(k) permits after-tax contributions and in-plan conversions, a mega-backdoor Roth can move far larger sums.

Find your conversion window. The years after you stop working but before RMDs and Social Security begin are often your lowest-income years. Converting pretax dollars to Roth during that stretch, up to the top of a target bracket, locks in today's known rates.

Build the taxable bucket. A brokerage account alongside your 401(k) gives you access to funds before 59½ and a step-up in basis for heirs.

What not to do

Don't convert without a plan. A large Roth conversion can push you into a higher bracket and, if you're 63 or older, raise your Medicare premiums, since IRMAA looks back two years. And when you can, pay the conversion tax with outside cash rather than from the IRA itself to preserve more tax-free growth.

The bottom line

A lifetime tax projection doesn't require a crystal ball. If nearly all of your savings sit in pretax accounts, consider taking steps today to diversify across all three tax buckets.

Even modest changes, such as redirecting part of your 401(k) contributions to Roth or opening a taxable brokerage account, can give you far more control over your tax bill in retirement and leave a cleaner legacy for your heirs.

Related Content

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

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

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

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

No state income tax

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

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

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

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

Homestead exemption can save thousands

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

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

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

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

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

More money to heirs

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

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

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

A strong housing market

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

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

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

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

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

The bottom line

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

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

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

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

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

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• Retirement Location, Location, Location: Can Florida Be Beaten?

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

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

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

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

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

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

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

Start with permission, not an account statement

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

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

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

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

Build a roadmap, not a balance sheet

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

That roadmap might identify:

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

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

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

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

Make sure authority matches responsibility

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

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

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

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

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

Create a succession plan for the family

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

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

Ask yourself a simple question: Who is the backup?

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

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

Plan for life, not only for death

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

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

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

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

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

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

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• How to Talk About Touchy Subjects With Loved Ones, Before a Crisis Turns 'Ifs' Into Reality
• How to Tackle Digital Estate Planning in Four Easy Steps
• Caring for Aging Parents Takes Planning Ahead and Patience
• Come as You Are: Wealth Management for Gen X

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

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

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

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

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

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

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

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

Exploring options and strategies

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

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

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

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

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

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

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

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

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

Planning for the future

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

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

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

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

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

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

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

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

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

Conversation with a professional

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

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

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

Ronnie Blair contributed to this article.

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

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

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

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

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

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

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

Who qualifies

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

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

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

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

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

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

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

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

Check your budget

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

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

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

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

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

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

The bottom line

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

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

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

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• How Auto-IRA Programs and the Saver's Match Could Be Retirement Game Changers
• SIMPLE IRA: What It Is and How It Works

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.

Turning 50 often brings shifting eyesight and rising healthcare expenses, yet original Medicare leaves older Americans completely on their own for routine vision care, glasses and contact lenses.

In a recent Retirement Coaches Association survey of 115 professional retirement coaches conducted in partnership with VSP Individual Vision Plans, 96% said poor vision can significantly threaten retirees' independence and quality of life. Another 61% reported seeing clients scale back daily routines or social activities because of vision-related concerns. As with hearing loss, vision loss is a risk factor for developing dementia, according to the American Optometric Association.

The good news is that, with some research and planning, you can protect your eyesight without breaking the bank.

Standalone vision plans exist

The fact that original Medicare won’t pay for routine eye exams or glasses can be a huge blow for older Americans. But that doesn’t mean vision insurance is off the table.

Bob Laura, founder of the Retirement Coaches Association, says standalone vision plans exist for retirees.

"For individuals who need additional coverage beyond Medicare or employer-sponsored benefits, these plans are worth evaluating as part of an overall retirement budget," he says. However, he continues, "Whether one provides value depends on an individual’s existing coverage, anticipated vision care needs, and potential out-of-pocket costs."

Laura says many retirees value the combination of predictable healthcare costs, coverage for routine eye exams and eyewear, and access to a network of eye care professionals. It may be worth paying a premium for standalone coverage if that makes other vision-related costs easier to anticipate.

Dr. Don C. Railsback, O.D., CEO of Vision Care Direct, agrees: "The best way to determine a plan's real value is to look beyond the monthly cost and see how it will benefit you annually."

As he explains, some of the most expensive parts of vision care are exam fees and prescriptions.

"You should factor in the monthly fee, the exam copay, allowance for frames and lenses, and whether the plan covers any lens upgrades you might need," Railsback says. "Most people over 50 need multifocal lenses, and a lot of plans will have set rates for progressives that can end up saving you money."

Just as importantly, Railsback says, vision insurance encourages people to keep up with annual exams, which is key to catching issues before they threaten vision.

"When the exam is already paid for, people are more likely to go," he says. "That's how conditions get caught early, giving you more treatment options before it's too far gone and your only options are expensive ones."

Don’t bank too heavily on warehouse club discounts

Given the high cost of eyeglasses, you may be inclined to turn to a warehouse club like Costco for affordable eyewear. Railsback says that while that may be a way to get inexpensive glasses, you risk overlooking eye health issues if you take that approach.

"It's important to remember that retail settings are built around selling products. Their primary goal is making sales," he says.

"An independent eye care practice is there for one reason — caring for your eyes," he continues. "Your eye exam should be focused on catching health issues and not just how well you can see. A quick check to simply update your prescription is not the same thing."

Railsback notes that as people age, the risk of glaucoma, cataracts, macular degeneration, and diabetic eye disease can increase. He says these are typically first noticed during a comprehensive eye exam.

That doesn't mean you should necessarily write off warehouse clubs or retail chains. Their optometrists are fully licensed Doctors of Optometry who perform standard dilated health screenings. However, they often lack equipment for more specialized diagnostics, so you may want to see an independent doctor, especially as you age.

Medicare Advantage may be an option

While original Medicare typically doesn’t cover eye exams and eyeglasses, Medicare Advantage plans often include vision benefits. But coverage can vary.

"Plans may offer limited allowances, network restrictions, or other benefit restrictions," says Laura. "Gaps in coverage can lead to retirees postponing or skipping care altogether, potentially continuing to experience vision concerns that can affect everyday activities and independence."

Railsback notes that for people with original Medicare, Medigap plans may help cover the cost for services it covers, including the 20% coinsurance for cataract surgery or glaucoma treatment.

"If you don't have a Medigap policy, a standalone vision plan can be a better way to save money and make some of these things more affordable," he says. These standalone vision plans, however, only cover hardware and routine exams, while Medigap or Medicare Advantage can cap out-of-pocket costs for medical eye conditions.

Don't overlook the importance of routine care

Enrollees in original Medicare are often eligible for some coverage once an eye condition is suspected or diagnosed. As Railsback explains, Medicare typically covers an annual diabetic eye exam for people with diabetes, yearly glaucoma screenings for people at high risk, diagnosis and treatment of age-related macular degeneration, and cataract surgery. These services are typically subject to coinsurance and Medicare Part B’s annual deductible.

But as crucial as these services are, Railsback says, routine care is needed to get ahead of these issues.

"Routine eye care includes an annual wellness exam that checks for health problems," he says. "An eye exam is also the only time doctors can see blood vessels and nerves directly without surgery, allowing them to spot signs of diabetes, high blood pressure, and other systemic issues outside of eye diseases. It's during this exam when a lot of people first learn about a serious health issue."

Railsback insists that routine and medical eye care need to work together.

"Annual preventive exams help catch problems early. Medicare helps pay to treat them," he says.

Compare vision care costs and options

To get a sense of how much you might pay for eye exams and glasses, here’s a comparison chart. Note that figures are estimates and can vary based on location and other factors.

It’s crucial to do your own research based on your location and specific eye-related needs, and compare plan allowances before enrolling. Whether you buy a standalone insurance policy or set aside funds in a health savings account (HSA), a clear vision plan helps you keep up with overall eye care.

Read More

• Average Cost of Healthcare by Age and US State
• In Your 50s? We Need to Talk About Long-Term Care
• Is a Medicare Advantage Plan Right for You?

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

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

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

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

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

Step No. 1: Compile information and write a plan

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

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

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

Step No. 2: Clarify your goals

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

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

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

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

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

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

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

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

Step No. 4: Prepare to provide support

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

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

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

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

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

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

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

Start the conversation before a crisis

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

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

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

Related Content

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• Caring for Your Aging Parents: A Seven-Step Guide
• As a Financial Adviser, I've Spent 30 Years Helping Clients Make Tough Choices for Aging Loved Ones. Now It's My Family's Turn — and This Is What I've Learned
• The Great Wealth Transfer is Creating a New Generation of Family CFOs
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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

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

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

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

What is a life insurance trust?

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

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

The estate tax advantage

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

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

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

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

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

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

Maintaining control over the distribution of assets

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

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

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

Protecting beneficiaries

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

• Lawsuits
• Divorce settlements
• Financial mismanagement

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

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

Providing liquidity when it's needed most

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

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

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

Planning for blended families

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

For example, an individual may want to:

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

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

Important considerations

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

Some considerations include:

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

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

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

The bottom line

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

A properly designed life insurance trust may help:

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

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

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

Living off $10,000 a month, or $120,000 a year, in retirement may seem like plenty. It's $2.4 million if you retire at 65 and live 20 years, and nearly double the $5,094 a month not-yet-retired Americans polled by Schroders for its 2026 US Retirement Survey said they would be comfortable with.

But how far $10,000 in monthly income goes in retirement depends on where you retire. The cost of living, including rent, groceries, healthcare, utilities, transportation, and taxes, varies from place to place. The good news is that, except in cities such as New York or Los Angeles, $10,000 a month goes a long way.

But how much? From Florida to Texas, here's a look at how much $10,000 a month gets you in five popular retirement destinations across the country.

1. Orlando, Florida

Ranked the best place to retire in 2026 by WalletHub, Orlando is popular with retirees because of its warm climate, countless golf courses, and tax-friendly policies — including no income, estate, or inheritance tax. The city boasts several music venues, art galleries, fishing facilities and adult volunteering opportunities.

Orlando also ranks high for healthcare access and is home to nationally recognized medical networks. It has an international airport and, unlike many car-dependent Florida cities, has the SunRail commuter line connecting surrounding suburbs directly to downtown and major hospitals.

Rent: $1,680 (Based on the median average for a two-bedroom apartment or condo.)

Food: $808 (Calculated using the USDA Moderate-Cost Food Plan for two older adults, adjusted using Orlando’s C2ER Grocery Price Index of 105.1.)

Dining out: $539 (Calculated using the Bureau of Labor Statistics 60/40 food-at-home to dining-out ratio for retiree households.)

Utilities: $371 (Calculated from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Orlando’s C2ER Utility Index of 95.8, which is 4.2% lower than the national average.)

Transportation: $720 (Based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adults and adjusted using Orlando’s C2ER Transportation Index of 96, which is 4% lower than the national average. It covers fuel, auto insurance, routine maintenance and vehicle upkeep.)

Healthcare: $642 (Calculated based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Orlando’s C2ER Healthcare Index of 101.1, which is 1.1% higher than the national average. It covers Medicare Part B premiums, supplemental coverage, prescription drugs and out-of-pocket medical services.)

Misc. Goods & Services: $538 (Derived from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Orlando’s C2ER Miscellaneous Index of 96.9, which is 3.1% lower than the national average. It covers apparel, personal care and grooming, household sundries and local entertainment.)

Total Monthly Budget: $5,298

2. Scottsdale, Arizona

Consistently recognized as a premier retirement destination, Scottsdale, Arizona, blends urban amenities with a desert oasis atmosphere and endless recreation. The city ranked fourth overall on WalletHub’s 2026 Best Places to Retire list, securing the number-one spot nationwide for Quality of Life. With a significant portion of residents aged 65 and older, much of the local infrastructure, social programming, and community support is tailored specifically to that demographic.

The desert scenery is the perfect backdrop for a hike in the Camelback Mountains, a visit to one of the city's art galleries, or dinner at the many restaurants that come to life at night. The city also has several golf courses, numerous hospitals and is close to an international airport. Plus, retirees appreciate the sunny year-round weather in this walkable city and the low crime rate compared to other major metro areas. It doesn't hurt that there is no tax on Social Security, no estate or inheritance tax and a low, flat 2.5% state income tax.

Rent: $2,023 (Based on the median average for a two-bedroom apartment or condo.)

Food: $841 (Calculated using the USDA Moderate-Cost Food Plan for two older adults, adjusted using Scottsdale’s C2ER Grocery Price Index of 104.1.)

Dining Out: $561 (Calculated using the Bureau of Labor Statistics 60/40 food-at-home to dining-out ratio for retiree households.)

Utilities: $538 (Calculated from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Scottsdale’s C2ER Utility Index of 138.8, which is 38.8% higher than the national average.)

Transportation: $869 (Based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adults and adjusted using Scottsdale’s C2ER Transportation Index of 115.3, which is 15.3% higher than the national average.)

Healthcare: $609 (Calculated based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Scottsdale’s C2ER Healthcare Index of 97, which is 3% lower than the national average.)

Misc. Goods & Services: $570 (Derived from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Scottsdale's C2ER Miscellaneous Index of 106.7, which is 6.7% higher than the national average.)

Total Monthly Budget: $6,011

3. The Woodlands, Texas

Ranked the best place to retire in Texas and number four in the nation by U.S. News & World Report, The Woodlands, Texas, is a favorite retirement destination in part because of its location just outside Houston. This retirement-friendly community has more than 220 miles of hiking and biking trails, championship golf courses, and The Woodlands Waterway, providing retirees with access to waterfront dining, boutique shopping and live outdoor entertainment.

Residents don't have to deal with state income, estate, or inheritance taxes, plus they have access to state-of-the-art hospitals and medical facilities. The city, which is just a 30-minute drive from an international airport, is also a favorite among older adults because of the low crime rate. Let's not forget the weather in The Woodlands. Winters are mild and snow-free, allowing for outdoor living all year long.

Rent: $1,717 (Based on the median average for a two-bedroom apartment or condo.)

Food: $803 (Calculated using the USDA Moderate-Cost Food Plan for two older adults, adjusted using The Woodland’s C2ER Grocery Price Index of 99.4)

Dining out: $535 (Calculated using the Bureau of Labor Statistics 60/40 food-at-home to dining-out ratio for retiree households.)

Utilities: $416 (Calculated from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using The Woodland's C2ER Utility Index of 107.4, which is 7.4% above the national average.)

Transportation: $738 (Based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adults and adjusted using The Woodland’s C2ER Transportation Index of 97.9, which is 2.1% below the national average.)

Healthcare: $663 (Calculated based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using The Woodland's C2ER Healthcare Index of 105.5, which is 5.5% higher than the national average.)

Misc. Goods & Services: $642 (Derived from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using The Woodland's C2ER Miscellaneous Index of 120.3, which is 20.3% higher than the national average.)

Total Monthly Budget: $5,514

4. Casper, Wyoming

You may freeze a little in Wyoming, but you can do it in style on $10,000 a month, which is why WalletHub ranked the city the number three retirement destination for affordability and number five overall for 2026. The city has a comparatively low cost of living — and there's no Social Security, estate or inheritance tax.

Outside of Wyoming's great track record of protecting its retirees from elder abuse and poverty, the city of Casper is home to world-class blue-ribbon fly fishing along the North Platte River, scenic trails at Casper Mountain and regional healthcare hubs.

Retirees appreciate the tight-knit sense of community, clean mountain air and abundant four-season outdoor recreation. While the closest international airport is hundreds of miles away in Denver (there is a regional airport in Casper), you do have your fair share of restaurants, local craft breweries and cultural spots.

Rent: $1,095 (Based on the median average for a two-bedroom apartment or condo.)

Food: $811 (Calculated using the USDA Moderate-Cost Food Plan for two older adults, adjusted using Casper’s C2ER Grocery Price Index of 100.4.)

Dining Out: $541 (Calculated using the Bureau of Labor Statistics 60/40 food-at-home to dining-out ratio for retiree households.)

Utilities: $342 (Calculated from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Casper’s C2ER Utility Index of 88.2, which is 11.8% lower than the national average.)

Transportation: $698 (Based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adults and adjusted using Casper’s C2ER Transportation Index of 92.6, which is 7.4% lower than the national average.)

Healthcare: $605 (Calculated based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Casper’s C2ER Healthcare Index of 96.4, which is 3.6% lower than the national average.)

Misc. Goods & Services: $533 (Derived from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Casper's C2ER Miscellaneous Index of 99.9, which is 0.1% lower than the national average.)

Total Monthly Budget: $4,625

5. Charleston, South Carolina

This southern coastal city ranked ninth on WalletHub's 2026 survey and is a popular destination for retirees. Rich in southern history, the city offers high-end dining, shopping, miles of Atlantic coastline, year-round golf and access to arts and culture.

The tax picture is good for retirees: No Social Security, estate or inheritance tax. Plus, adults 65 and up can deduct up to $15,000 of other retirement income from state taxes. South Carolina also has some of the lowest property tax rates in the nation. Need more reason to move to a city that has warm weather most of the year? Charleston features top-tier healthcare, walkable cobblestone historic districts, and convenient access to its own international airport.

Rent: $2,331 (Based on the median average for a two-bedroom apartment or condo.)

Food: $833 (Calculated using the USDA Moderate-Cost Food Plan for two older adults, adjusted using Charleston's C2ER Grocery Price Index of 103.1.)

Dining Out: $555 (Calculated using the Bureau of Labor Statistics 60/40 food-at-home to dining-out ratio for retiree households.)

Utilities: $389 (Calculated from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Charleston’s C2ER Utility Index of 100.4, which is 0.4% higher than the national average.)

Transportation: $703 (Based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adults and adjusted using Charleston’s C2ER Transportation Index of 93.3, which is 6.7% lower than the national average.)

Healthcare: $605 (Calculated based on the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Charleston’s C2ER Healthcare Index of 96.4, which is 3.6% lower than the national average.)

Misc. Goods & Services: $521 (Derived from the Bureau of Labor Statistics Consumer Expenditure Survey baseline for older adult households and adjusted using Charleston's C2ER Miscellaneous Index of 97.5, which is 2.5% lower than the national average.)

Total Monthly Budget: $5,937

$10,000 can get you a lot

This is just a small sampling of what $10,000 a month can get you in retirement, but the good news is it can get you a lot. A big chunk of your retirement budget will go to housing, whether you rent, own, live in an expensive retirement community, or need assisted living.

Healthcare will account for another large part, depending on your overall health and the type of supplemental coverage you choose.

Ultimately, this demonstrates that $10,000 can comfortably cover baseline essentials across diverse markets, leaving ample discretionary income to travel, pursue hobbies, and enjoy the retirement you worked so hard to build.

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

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

It means confronting questions many would rather put off:

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

But procrastination carries financial and emotional costs.

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

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

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

Information must be passed down, too

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

Take a moment and consider who in your family knows:

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

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

Prepare heirs before the transition

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

This can start with small steps:

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

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

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

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

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

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

Every family has a handoff to plan for

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

More time means more choices

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

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

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

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

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

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

What was supposed to be a dream of a lifetime, cruising around the world endlessly in retirement, came to an abrupt end last week, when Florida-based Villa Vie Residences announced it was suspending operations.

Residents of the Villa Vie Odyssey luxury cruise, which embarked on a first-of-its-kind journey from Northern Ireland in October 2024, were reportedly given just seven hours to pack up everything they owned and disembark in Cambodia. That was just two years after they were sold a dream: pay roughly $100,000 to buy an inside cabin or up to $350,000 for permanent residency to sail around the globe for the rest of their lives.

The cruise operator said it was forced to suspend operations due to rising fuel costs that made it impossible to continue operations. Monthly fuel expenses, which historically averaged about $1,800 per cabin, recently skyrocketed to between $6,000 and $8,000 per cabin in parts of Asia.

"The company cannot simply pass increases of that scale on to residents, and the resulting shortfall has placed its current operating model under unsustainable financial pressure," wrote Villa Vie when announcing the suspension. The company stated it is using a 60-day pause to explore restructuring or Chapter 11 bankruptcy protection.

The most recent report, from CBS News, states that the ship's lender has now taken control of it, as per a message sent to residents. Additionally, while the boat remains in Cambodia, it is expected to be moved to Singapore soon. Residents were also given the weekend to collect the rest of their belongings.

The result: more than 200 passengers were forced to leave what they had called home since 2024. Randy Cassingham, a resident who has been blogging about his experience on the ship at ResidentialCruising.com, said in his blog that while the boat had the capacity for roughly 650 residents, it peaked at around 350. He said that according to Cambodian government figures, Villa Vie arrived in the country on October 23 with 203 residents and 156 crew members.

According to a recent CBS News report, the ship's lender has taken control of the vessel, which is expected to move from Cambodia to Singapore soon. Residents were notified by message and given the weekend to retrieve their remaining belongings.

Left on land, now what?

Since the disembarkment, residents have been left figuring out what to do next. After all, they paid tens of thousands, if not hundreds of thousands, to cruise around the world. Many sold their homes and most of their possessions, trading a life of living on land to cruise around the world either permanently or for an extended period of time.

An endless cruise such as this one, in theory, offers a different way to retire and see the world, and can be more affordable than a retirement community. But with no secured funding or immediate refunds in place, stranded passengers have largely been left to cover the costs of emergency flights and lodging on their own.

Cassingham and his wife sold their house and car and got rid of virtually all their belongings to live on the ship. They still have a legal residential address in the U.S., but they don't feel like that address is their home.

"We are effectively homeless. Which is not to say we must live on the streets. We could live indefinitely in a 5-star hotel in S.E. Asia for significantly less than we were paying to live on the ship," wrote Cassingham. "But living forever in a hotel is not our idea of home either. We need time to figure out where we will go, and there is a slight chance we could rejoin the ship. We must wait and see."

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Medicare is one of the federal government's largest programs. After spending roughly $1.23 trillion in 2025, outlays are approaching $1.3 trillion this year to cover more than 70 million Americans. Each year, a portion of that sum leaks out as "improper payments." According to the Centers for Medicare & Medicaid Services (CMS), about $57 billion in 2025 claims involved missing paperwork, wrong recipients, or incorrect amounts — largely sloppy billing rather than outright fraud.

Real fraud, however, is a massive problem. CMS defines it as knowingly deceiving, concealing, or misrepresenting facts to secure money or property from a federal healthcare program. In 2025 alone, a nationwide crackdown alleged $14.6 billion in 'intended' losses, followed by another $1.8 billion in overpayments uncovered during the first half of 2026. Focusing on physician billing, OpenMedicare analyzed a decade of official data — scrutinizing every line, provider, and dollar across a $940 billion stream — and flagged $400 million in abnormal claims across 500 providers.

Has your doctor been flagged? Here’s how to tell.

How Medicare fraud hurts your wallet

Signed into law in 1965, Medicare gave older Americans health coverage they often could not buy on their own. Hospital care (Part A) was the core benefit and came automatically at age 65. Doctor coverage (Part B) was optional and required a monthly premium. Medigap policies soon appeared to help pay deductibles, coinsurance, and copays. In 1997, Congress created Medicare Part C, now known as Medicare Advantage, which lets private insurers offer managed-care health plans to seniors instead of traditional Medicare Parts A and B. Then, in 2003, Medicare added a prescription drug benefit (Part D). Given Medicare's importance, combating fraud, waste, and abuse is key to its sustainability.

Medicare fraud, waste, and abuse (pdf) costs taxpayers and diverts resources that could be spent on beneficiaries’ care or other societal priorities and needs. So when fraud drains Medicare, there is less money for the health care you may need. You might pay for things you never get or pay for tests, medicines, and care you don’t really need. Doctors, pharmacies, and medical suppliers can make mistakes and bad choices, but on occasion, they have been accused of stealing from Medicare.

For instance, in February 2025, a New York doctor was convicted of submitting fraudulent claims to Medicare for unnecessary medical lab tests and orthotic braces (Department of Justice [DOJ], 2025a). This resulted in more than $24 million in fraudulent Medicare claims. Besides that, the doctor received tens of thousands of dollars in illegal kickbacks and bribes.

Jason Gerstenberger, with Insured With Jason, adds that if you are on traditional Medicare without a supplement, a fraudulent claim on your Part B will result in a real 20% cost to you. “You end up paying coinsurance on a service that never happened.” He says that if a scammer already billed Medicare using a patient’s number for a back brace, for instance, the real one they need could be denied because Medicare's record shows they already have it.

How Medicare Fraud hurts your health

Receiving care from a fraudulent provider can mean poor-quality, medically unnecessary, or outright harmful treatment. You could also be denied legitimate care. For instance, if a service has coverage limits and Medicare mistakenly believes you already received it, your claim will be denied

Many people don’t even realize they are victims until months later when:

• They receive surprise bills for care or services they never requested
• Their coverage is unexpectedly denied
• They are notified about medical treatments they didn’t receive
• They receive medical equipment in the mail they didn’t request or want

Gerstenberger recounts an April 2026 House Ways and Means Committee hearing where a Medicare beneficiary testified that she was denied physical therapy for a shoulder issue in July 2024 because Medicare showed she was enrolled in a hospice she had never heard of. Her claims were denied for months while she kept paying her premiums. The doctor listed on the hospice paperwork was a surgeon whose identity had been stolen.

Stacy Kemp Ferrari, a personal injury attorney at Kemp Law Group, shared a similar story about a 61-year-old patient who was told he needed heart surgery for $100,000. The patient questioned the recommendation because he could still function normally and did not feel as severely ill as his doctor had described.

The patient contacted Kemp Law Group, which opened an investigation and obtained a second opinion from an independent cardiologist. “After reviewing the tests, that cardiologist concluded the blockage did not require surgery,” says Ferrari. “If the patient had proceeded anyway, he may have been exposed to complications such as a mild stroke or heart attack, which affect about 15% of patients over 60, plus three months of recovery, lost work, and likely extensive physical therapy.”

What are some common Medicare fraud risks?

Scammers exploit patients’ trust in Medicare through things like billing fraud (charges for unused or upgraded services, or duplicate claims), identity theft or insurance swapping, illegal kickbacks, impersonating licensed providers, and prescription fraud such as forgery, doctor shopping, and drug diversion (FBI, n.d.).

What to do if your doctor (or organization) is on the list

Start by confirming which list you’re using. OpenMedicare is the most comprehensive option, covering about 1.7 million providers across all 50 states and more than 100 specialties. This list comes from CMS's publicly available Medicare Physician & Other Practitioners dataset, released yearly, and includes billing amounts, service volumes, beneficiary counts, submitted charges, procedure codes, geographic data, and specialty classification.

If your doctor is on this list, it doesn’t necessarily mean they were or will be charged with fraud. Even so, your first step may be to ask for an itemized list of every service billed in your name and compare it with the visits you actually had, according to OpenMedicare. Then, if you see tests, procedures or equipment you never received or don’t recognize, call 1-800-MEDICARE or use the Medicare fraud hotline to report it. If Medicare already paid for fraudulent claims, you may also need to dispute bills from a collector. Watch your Medicare Summary Notices and credit reports for new claims you did not order.

Check if your doctor has been banned from Medicare: Perform an online search at https://oig.hhs.gov/exclusions/

Look up the doctor on Medicare’s site: Care Compare: https://www.medicare.gov/care-compare/

Report suspected fraud:

• Medicare’s fraud page: https://www.medicare.gov/basics/reporting-medicare-fraud-and-abuse
• Call 1-800-MEDICARE (1-800-633-4227)
• HHS-OIG hotline: https://oig.hhs.gov/fraud/report-fraud/
• Call 1-800-HHS-TIPS (1-800-447-8477)
• CMS “where to report” page: https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity/reporting-fraud

Get help reading bills and spotting bad claims: Senior Medicare Patrol (free local help): https://www.smpresource.org or 1-877-808-2468. Or, check out the Medicare fraud booklet (PDF): https://www.medicare.gov/publications/11610-4rs-for-fighting-medicare-fraud.pdf

See your claims: Log in to your Medicare account and check claims / Medicare Summary Notices. If you have Medicare Advantage or Part D, you can also call 1-877-772-3379.

Keep in mind most Medicare claims are legitimate

Most Medicare claims are legitimate and most doctors are honest professionals. Coding mistakes or missing paperwork are far more common than a doctor planning to steal from Medicare. Accusing a provider can hurt the doctor/patient relationship, but ignoring charges you don’t recognize can cost you and the program real money. If you suspect fraud, take the necessary steps to report it. The goal is to catch legitimate problems early, before your wallet and your health pay the price.

Disclaimer

These are statistical flags based on publicly available CMS data, not accusations of fraud. Billing anomalies can have legitimate explanations. Report suspected fraud to: 1-800-HHS-TIPS.

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Beatrice Sanders, 69, a divorced mother and her only child, Kat Schmidt, 30, were always a tight-knit unit. So when Sanders retired about two years ago, it was a no-brainer to move from Maryland to Utah where her daughter lives.

"She was a great kid and I was always so grateful for that as a single mother with an extremely demanding job," as the secretary to an elementary-school principal, Sanders says.

But soon after she moved, she felt an unexpected tension between the two of them. Schmidt told her she had always felt responsible for her mother’s happiness and that the two of them were too enmeshed in each other's lives. And that Sanders seemed to ignore Schmidt’s pleas to stop what she considered forced physical contact.

Then this April, Schmidt told Sanders she was blocking her cell number and needed to end all contact.

"I was devastated," Sanders says. "I tried really really hard to be a good mom."

Sanders’ story once would have been shocking but nowadays sounds familiar. Estrangement between parents and adult children has become a popular topic across the media landscape, especially social media; on Reddit several forums for estranged adult children have more than 30,000 visitors weekly. One public Facebook page for parents of estranged children has 13,000 followers.

Whether estrangement is more prevalent than it used to be is anybody’s guess. Researchers have looked into the phenomenon and begun to collect some data, but can’t yet gauge whether estrangement is more common or just more openly discussed.

"There's no scientifically acceptable data proving that estrangement is increasing or decreasing," says Karl Pillemer, a professor of human development at Cornell University and a leading expert on the topic. "What has genuinely increased is not the rate of estrangement, but the willingness to name it, and talk about it and engage with others about it."

In a nationally representative survey of 1,340 U.S. adults conducted by Pillemer's Cornell Family Estrangement and Reconciliation Project, 27% said they were estranged from a close relative, meaning they had no contact. This includes 17% who said that relative was a parent or a child. The survey was published in his 2020 book, Fault Lines: Fractured Families and How to Mend Them. And a 2025 YouGov poll found 38% of American adults reporting estrangement from an immediate family member, including 16% from a parent and 10% from a child.

What causes estrangement

The causes of estrangement vary as much as family dynamics. In some cases, it can be an adult child cutting off a parent as a consequence of physical, sexual or emotional abuse. Mental illness, drug abuse and other factors can also lead to parent/child breakdowns.

For Richard Heller, 67, and his son, 39, Heller’s self-admitted years of unchecked rage and anger led them to where they are now: almost no contact for a decade and a 4-year-old grandchild whom Heller has never met.

Heller, a licensed social worker who lives in Pelham, N.Y., was divorced from his wife when their two children were young; When Heller remarried, he says, his son did not adapt well to the blended family. The conflict only increased as Heller’s son became a teenager and an adult.

"Somewhere in there he just decided he didn't want anything to do not only with us, but with his mother — in fact, he's not in touch with anyone from his family of origin," Heller says.

Heller knows the role he played in the conflict with his son. "I was a very angry and raging parent when my children were young," he says. Recently, he says, his daughter Samantha told him that she was terrified of him as a child.

For a long time, he was furious at his son and desperate to get him back. But "after 10 years of hardcore meditation and outside help, I've resolved a lot of the pain that was driving that rage," Heller says. Recently, he says, he’s learned to accept his situation by understanding how he transferred that pain to his son: "How did I help those seeds flourish, so that this estrangement came about? We want to have our children in our life, but more than anything, we need to be at peace with their choice."

Samantha, 35, who asked to be identified only by her first name, says she and her brother had a very difficult childhood and she understands her brother’s feelings, although she is saddened he has also cut all contact with her.

"I don’t think he fully understands his emotions because I didn’t fully understand mine," she says. "He might be presenting it as anger, but it’s not anger; it’s pain."

Of her father she says, "I don’t think he’s fully aware of everything he has done, and I can understand why." As the mother, she’s gained insight into the difficulty parents would have knowing they hurt their child. "So I can see how that’s painful to reflect on and think about."

Another cause of estrangement: when parents feel their child is violating core beliefs and values, says Megan Gilligan, an associate professor of human development and family science at the University of Missouri.

Gilligan worked on the Within Family Differences study, which began in 2000 with in-depth interviews of around 500 mothers and some of their adult children. The women, all around 65 years old and from the Boston metropolitan area, were interviewed again seven years later.

She gives an example from the interviews: A mother, a devout Catholic, was willing to accept her child’s divorce, but not his remarriage. The mother and son ended up estranged. While the mother didn’t choose to end the relationship, her anger at her child’s decision most likely led to decades of unresolved tension and strain until her son decided to limit or end contact.

Many parents have difficulty coming to terms with the fact that traditional expectations about family roles and power balance have changed.

Joshua Coleman, a psychologist who specializes in family estrangement, says, "The old rules of engagement have just radically changed." He explains that the principles of "honor thy mother and thy father, families forever respect thy elders, blood is thicker than water, have given way to this focus [among children] on 'my mental health, my happiness, my personal growth, my identity, my political beliefs.'"

Coleman, who was estranged from his own daughter for several years, is the author of Rules of Estrangement: Why Adult Children Cut Ties and How to Heal the Conflict and writes the Substack Family Troubles. His services helping estranged family members are in high demand. So much so that he has a waitlist, although he charges $995 for one video session and a year of email support.

Different realities and "defensive ignorance"

What can make reconciliation difficult is that typically the parent and child are operating from clashing perceptions not only of who said what, but what actually happened.

Take Sanders and Schmidt, the mother and daughter who are currently estranged. When her mother moved to Utah, Schmidt had been going through some changes, including leaving the Mormon religion she had been raised in. She had recently started therapy to deal with anxiety.

Sanders sees Schmidt’s decision to cut her off as part of an effort to understand herself. "I feel that Kat is trying to find out who she really is and in order to do that, she needs to reject her mother and her church relationship."

For Schmidt, her mother is not taking any responsibility for her own actions. She says she repeatedly explained to her mother why certain things she did bothered her so much. But her mother didn’t seem to understand or want to change.

Schmidt says her efforts to protect herself were fruitless. "I couldn’t say no and have it count."

Mother and daughter both felt they were walking on eggshells for a few years. But as is often the case, one incident precipitated the break and both remember it very differently. On a night out, Schmidt says her mother unexpectedly grabbed her.

"I’m OK with consensual touches and hugs, but I told her forcing physical affection on me is not OK," Schmidt says. "She showed me that she wouldn’t respect the most important thing to me — a boundary. She didn’t get it."

As Sanders remembers it, she held on to Schmidt’s shoulder to balance herself in a moment of exuberance.

For Sanders, what makes the situation more agonizing is that she came from an abusive childhood herself, and she sees herself as a much better parent than her own father.

"I told her it breaks my heart that she feels about me the way I felt about my dad," Sanders says. "I’m not angry at Kat; I’m sad, disappointed, and I resent that I was a good mother and she doesn’t see me that way."

For Schmidt, her mother is just waiting for her to heal and expects Schmidt will return without examining her own role in the estrangement. "I love my mom," she says. "I miss my mom, but I don’t feel safe around her."

It’s not unusual for a parent to feel clueless when their adult child severs the relationship. "One of the most striking findings in our research is what I call defensive ignorance," says Pillemer, the Cornell professor. "Parents in estrangements frequently say that they have no idea why the child cut them off."

But in almost every case, when interviewers probed further, they found that "many parents had received detailed letters or messages from their children explaining exactly what went wrong, and they dismissed them as crazy, wrong or exaggerated."

This isn’t necessarily surprising, Pillemer says; parents are not only experiencing rejection, but "there is also the pain of knowing they may have contributed to it. When this happens, our minds protect us by editing out the uncomfortable information."

Moving toward reconciliation

The good news is that many estranged parents and their children find their way back to each other, although those numbers are hard to come by, too. And it can take a lot of hard work, however, especially on the parents’ part, to move toward some sort of rapprochement.

Insisting that one person is right and one person is wrong rarely works in any relationship, says Jan Anderson, a psychologist who now works as an executive life coach, often with parents of alienated adult children. "There are two separate realities here, and it does help to at least be able to understand where your kid is at."

In a situation where an adult child has severed contact, the power lies with the child to resume it, a shift that parents often have a hard time accepting. "If you're in a one-down position, how do you negotiate? You have to change your strategy a little bit," says Anderson. The power dynamics have flipped, and "your child has basically told you, 'I'm renegotiating the terms of our relationship, Mom and Dad.'"

One potential approach psychologist Coleman recommends considering is what he calls an amends letter. He says when working with clients, helping them write one is usually his first order of business.

That letter "attempts to express some degree of understanding and empathy and responsibility taking and being willing to work on the relationship," he says. Writing such a letter to his daughter helped them overcome their estrangement.

"It has to be done very carefully because it's easy to write a letter that may seem like amends, but says things like, 'Well, if I did anything wrong,' or 'Maybe I wasn't the most perfect parent.' Those things are all well-intended, but they don't persuade anybody," Coleman says. "Parents have to be open and willing to take a good, hard look at themselves."

Still, you can’t force a reconciliation. Parents often ask Anderson if they should just show up on their child’s doorstep. Her response is succinct: "I haven't heard of a case yet where it went well."

Heller, the father with the estranged son, knows that firsthand because he tried it.

"I made every effort to reach out," Heller says. "Eventually, he started blocking my texts, my calls, and so I started stalking him on the internet. I went and visited his place of work. And he was there behind the register, like a deer in the headlights." This was about three years after his son blocked all access.

Heller told him he loved him and wanted to talk. He says his son’s response was: "Don't call me. Don't text me. Don't write me. Don't reach out to me in any way, shape, or form." He has not been in contact with his son since that failed meeting about eight years ago.

Hearing the heartbreaking stories of estrangement can make it easy to lose sight of the fact that many families are closer than ever. According to a 2024 Pew Research Survey, 77% of parents say their relationship with their adult children is excellent or very good.

"I think we have a fascinating paradox at the heart of the estrangement conversation," Pillemer says. "On the one hand, young people are closer and more dependent on their parents than previous generations. On the other hand, estrangement appears to be prominent and highly visible."

Sanders, the estranged mother, believes she and her daughter will reunite at some point, but for now she is leaving Utah for South Carolina and moving in with her brother, who has health issues.

"It's not always easy, the call of family duty," she says. "But that's what family's for."

How to rebuild your relationship

Getting back together with adult children who have cut you off isn’t easy, but it can be done. Here are some tips:

• Let your child know your door is always open, but don’t stalk them on social media or show up at their home or office. If they’re saying they don’t want to talk with you, respect that.
• Attempt to move past placing blame. Even if you feel you are completely in the right, be open and curious with yourself about why your child is so angry with you.
• Get outside help. Good therapy is often useful and so is a friend or family member who will give you an honest view of the situation. Too often, people only confide in those who fully bolster their side, which reinforces the polarization.
• Stay off or limit social media. While it can be a place of support, too often sites about estrangement serve to confirm the beliefs of one side, which isn’t helpful.
• Accept that if you do renew relations with your child, they might set down specific rules of engagement that could feel rigid and unfair. If things go well, these may loosen with time. And keep your eye on the prize of reconciliation.

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

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

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

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

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

1. Assuming you can ignore the account until year 10

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

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

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

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

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

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

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

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

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

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

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

3. Assuming equal withdrawals are always the answer

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

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

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

4. Assuming a Roth conversion always helps the family

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

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

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

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

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

5. Overlooking what an inherited Roth can do

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

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

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

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

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

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

Make the 10 years work for you

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

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

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

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

Dear Wealth Wise: I'm 75 with a large traditional IRA balance. I'm already taking RMDs. I want to create a tax-efficient inheritance, but converting to a Roth IRA will only bump up my tax rate and IRMAAs. Did I miss my chance? — Late to the Roth Party

Dear Late to the Roth Party: Retiring with a large traditional IRA balance is a good thing in theory. In practice, it can create complications.

A large traditional IRA can lead to large required minimum distributions (RMDs), which can result in high taxes. Plus, massive RMDs can trigger income-related monthly adjustment amounts, or IRMAAs, which could raise Medicare premiums by hundreds of dollars per month.

A large traditional IRA also creates a potential tax headache in an inheritance situation. When a non-spouse inherits an IRA, they must empty the account within 10 years. That can create issues when those inheriting a large IRA are in their peak-earning years and subject to high tax rates on those distributions.

For all these reasons, Roth conversions can be a strategy worth pursuing, even after RMDs begin. Our reader wonders whether they’ve missed the boat on Roth conversions. Here’s what our experts have to say.

Roth conversions are still possible

When you're already taking RMDs, Roth conversions can seem daunting, especially if you're worried about higher Medicare costs. But Al Kingan, JD, an estate and business planning executive with MassMutual, says, "I would not say that this person missed a Roth conversion opportunity."

Kingan says our reader can consider filling up their current tax bracket, especially if their highest applicable tax rate is 22% or 24%, and see what conversion amount that allows each year. Note that RMDs must be withdrawn first from a traditional IRA and can't be converted to a Roth. Once you've taken your RMDs, additional money can be converted to a Roth.

For example, our reader might be able to move $50,000 a year into a Roth IRA without landing in a higher tax bracket. If that tactic is also manageable from an IRMAA standpoint, it might be worth doing, even if only a portion of the traditional IRA gets converted in our reader's lifetime.

Investing unneeded RMDs creates estate-planning opportunities

"Saving the excess in a taxable investment account can improve the overall inheritance picture for their heirs," Kingan says. "Appreciation within the account receives a step-up in basis at their death. These are assets that could be immediately liquidated after death to provide for the needs of surviving beneficiaries with no tax consequences."

Kingan further explains that even if a taxable account grows after it's inherited, it's only the post-death appreciation that's subject to tax. Because there's no 10-year rule to worry about, this approach gives our reader's heirs more flexibility.

Strategic giving can produce tax savings

Large RMDs can create big tax bills even without introducing Roth conversions into the conversation. But if the goal is to do at least a partial conversion, Kingan says, our reader might want to consider qualified charitable distributions, or QCDs.

QCDs allow savers to transfer funds directly from an IRA to a qualified charity, thereby satisfying RMDs and lowering their adjusted gross income (AGI). That keeps taxable income lower, leaving room in their current tax bracket to execute a partial Roth conversion without spiking their tax rate.

"The QCD limit in 2026 is $111,000," Kingan says, so there's plenty of opportunity to snag this tax break while doing good.

Life insurance might be worth considering

Since our reader clearly hopes to avoid burdening their heirs with a heavy tax bill, Charles Czajka, founder of Macro Money Concepts, says they should consider life insurance.

"I have hundreds of clients who are able to enjoy their retirement and spend what they want to, knowing that upon death, a tax-free death benefit will go to beneficiaries," he says. "This is also a good way to help your heirs pay the taxes on the qualified money you leave them."

Czajka recommends using the portion of RMDs that isn't needed for living costs to purchase life insurance. That way, if our reader's heirs are still left with a sizable traditional IRA during their peak-earning years, they can potentially use the death benefit to cover the taxes that come due.

The right inheritance plan is key

There's a reason many experts insist that Roth conversions should be a years- or decades-long plan. Once you start taking RMDs, there's often limited opportunity to convert a large balance in a tax-efficient manner.

Kingan says our reader should accept the reality that a full Roth conversion might be off the table. But he says our reader can coordinate inheritance distributions with their beneficiaries' tax brackets.

"For example," Kingan says, "someone might leave more traditional IRA assets to lower-tax bracket beneficiaries, and Roth assets or other non-qualified investments to higher tax bracket beneficiaries."

Hypothetically, if our reader is able to convert $1 million to a Roth IRA and has $3 million remaining in a traditional IRA, they could split the Roth funds among their children and leave the $3 million to their grandchildren, who might not be as far along career-wise and whose earnings might be significantly lower.

A word from Wealth Wise

Our reader has fallen into a fairly common trap. Years of strong saving habits have landed them in a tricky spot with regard to estate planning. That's why it's often a good idea to consult with a financial professional during your wealth-building years. Had our reader perhaps started Roth conversions years earlier, they'd have more options.

This isn't to say that they're in a bad situation by any means. The point, rather, is that continuous planning could lead to better outcomes in the context of estate planning. Given the amount of wealth that's expected to change hands in the coming years, it's an important lesson for all savers to keep in mind.

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

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

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

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

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

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

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

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

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

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

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

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

Why December 31 is not a suggestion

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

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

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

What the stack looks like by revenue

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

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

Layer Three: Taxable strategy and the estate planning trap

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

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

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

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

Three things to do before December 31

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

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

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

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

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

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

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

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

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

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

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

Start with the behavior you want to encourage

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

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

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

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

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

Make sure the formula rewards what you value

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

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

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

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

These choices express your values. They should be deliberate.

Consider when the inheritance will arrive

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

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

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

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

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

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

Money cannot do every job

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

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

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

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

Find an attorney who can work through the details

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

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

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

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

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

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

Related Content

• Why an 'Equal' Inheritance for All the Kids Doesn't Always Work: 4 Scenarios to Consider
• Is Your Will Actually Fair? Why Estate Planning Isn't Just About the Math
• What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
• Are You One of the Many Retirees Who Hoard Their Savings? Here's How to Stop Underspending
• Sitting on Large Capital Gains? This Trust Offers a Way Out, But Few Advisers Even Mention It

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.

Affordability was a top concern for voters heading into the 2026 midterm elections, as rising prices squeeze household budgets. But interestingly, Social Security's future is also emerging as an important election issue for some.

An October AARP survey of likely voters in 43 competitive congressional districts found that 83% of voters age 50 and older see Social Security as very or extremely important when deciding how to vote. A Peterson Foundation survey of voters in five battleground states found that 81% were more likely to support a Senate candidate with a plan to prevent automatic benefit cuts.

Many would also support Social Security fixes that involve higher taxes for some workers.

The concerns come as Social Security's retirement trust fund is projected to deplete its reserves in just six years, 2032. To avoid an across-the-board reduction in scheduled benefits of about 22%, Congressional lawmakers will have to act before then to help close the program's funding gap.

Here's more to know about voter sentiment and what Social Security changes could mean for taxes.

Tax changes that could help shore up Social Security

First, Social Security isn't "going bankrupt," and benefits wouldn't completely cease if the trust fund reserves are depleted. However, without action from Congress, the retirement and survivor trust fund is projected to have only enough ongoing revenue to pay 78% of scheduled benefits after the reserves run out in late 2032, according to the 2026 Trustees Report.

Lawmakers could address the shortfall by increasing revenue, slowing benefit growth, or implementing a combination of changes. Given the latest midterm election results, it will be interesting to see when and how Congress passes bipartisan legislation.

In the meantime, several proposals are being floated.

Raise or eliminate the Social Security wage cap

One of the most widely discussed proposals would raise or eliminate the cap on earnings subject to Social Security payroll taxes.

• In 2026, workers pay the 6.2% Social Security tax on the first $184,500 in wages. Employers pay a matching amount, while self-employed workers generally pay the full 12.4%.
• Earnings above the annual cap/Social Security tax limit aren't subject to Social Security payroll taxes.

Sens. Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio), are calling for eliminating the Social Security payroll tax cap. The proposal would require higher-wage earners to pay Social Security taxes on more of what they earn.

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.

The Peterson Foundation survey found that 72% of voters supported a proposal to impose an additional 1% payroll tax on earnings above the current 2026 $184,500 wage cap.

The Social Security Administration (SSA) estimates that eliminating the cap could close about 58% of the 75-year funding shortfall if additional taxed earnings don't count toward future benefits, or about 45% if they do.

Increase the payroll tax rate

Another option is to increase the Social Security payroll tax rate for workers and employers. The combined rate is currently 12.4%, split evenly between employees and employers. Self-employed workers generally pay both shares.

• The SSA has modeled a gradual increase of 0.1 percentage points annually beginning in 2032, bringing the combined rate to 14.4% in 2051.
• That would mean the employee share eventually rises from 6.2% to 7.2%, with employers paying the same increase.
• The change could close about 33% of the long-range funding shortfall.

A broader tax increase would bring in more revenue but would also likely impact workers across income levels — not just those earning above the current wage cap.

Tax investment income

Lawmakers could also look beyond wages for additional Social Security revenue. One SSA-modeled proposal would impose a separate 12.4% tax on net investment income for taxpayers with modified adjusted gross income (MAGI) above $200,000 for single filers or $250,000 for married couples filing jointly.

Such a proposal would:

• Apply to the lesser of net investment income or the amount by which MAGI exceeds the applicable threshold.
• Direct the additional revenue to Social Security, in addition to the existing 3.8% net investment income tax, which generally applies to certain investment income above those income thresholds and helps fund Medicare.

Note: The NIIT is a separate tax established under the Affordable Care Act; it does not fund Social Security.

This approach would shift some of the funding burden to higher-income households with investment income, rather than relying solely on payroll taxes on wages. SSA estimates that the proposal could close about 30% of the program's long-range funding shortfall.

Change to a fixed-rate cost-of-living adjustment

Under the current Social Security system, the annual cost-of-living adjustment(COLA) is a percentage based on inflation. The same percentage applies to each beneficiary's monthly benefit, so the dollar increase varies with the benefit amount.

• However, under a flat-rate SS COLA, the inflation-adjusted annual increase would be converted into a dollar amount based on the benefit of someone around the 20th percentile of the benefit distribution.
• Every beneficiary would then receive that same dollar increase.
• That would mean smaller annual increases for most beneficiaries, although people receiving lower benefits could fare better.

An AARP Public Policy Institute analysis found that 80% of beneficiaries would receive a smaller adjustment. For 2026, the average retired worker would have received an estimated $34.20 monthly increase under the proposal, compared with the actual $57.90 COLA.

The difference could compound over time. AARP estimated that a hypothetical retiree who began collecting benefits in 1998 would have received a benefit about 20% lower by 2026 under the flat-rate approach.

An analysis commissioned by the Committee for a Responsible Federal Budget (CRFB) found that giving smaller COLAs to retirees with higher benefits could close about half of Social Security’s long-term funding gap.

The SSA has studied a different approach: cutting annual COLAs by 0.5 or 1 percentage point, which estimates show could close about 24% or 46% of the gap, respectively.

Raising the retirement age

Another option would be to gradually increase the full retirement age (FRA), currently 67 for people born in 1960 or later. Workers could still claim retirement benefits as early as 62, but claiming before full retirement age permanently reduces monthly benefits. Raising the FRA would make those early-claiming reductions larger.

Supporters argue that longer life expectancies make a higher retirement age reasonable and that the change would reduce Social Security costs. But the actual effects wouldn't be the same for everyone.

• The SSA estimates that gradually raising the full retirement age to 68 could close about 11% of the long-range funding shortfall; raising it to 69 could close about 32%.
• In the Peterson Foundation survey, 52% of voters opposed gradually increasing the retirement age for younger workers.

What about Social Security for younger workers?

Speaking of younger workers…they may seem far removed from retirement, but they're already paying into Social Security and could face higher taxes or smaller future benefits depending on what Congress decides.

• Under the SSA's gradual payroll tax increase scenario, for example, the employee tax rate would eventually rise from 6.2% to 7.2%.
• For someone earning $50,000 a year, that would mean paying an additional $500 in Social Security payroll taxes annually once the increase is fully phased in.

Meanwhile, high housing, healthcare, and everyday living costs can make it harder for younger workers to save for retirement. With traditional pensions increasingly rare, many wonder how much they can count on receiving from Social Security when they stop working.

• A December 2025 Cato Institute survey found that only 34% of Americans under age 30 believed Social Security would exist when they retire.
• Nearly eight in 10 (78%) expected to receive less than their full scheduled benefits.
• A separate Nationwide Retirement Institute survey found that 45% of Gen Z and 39% of millennials believed they would never collect Social Security benefits.

And keep in mind, Social Security isn't just about retirement. The program also provides survivor benefits to eligible children and spouses when a working parent dies, as well as disability benefits to eligible workers who can no longer earn a living.

Social Security solvency: Bottom line

It's worth noting that even if Social Security reserves are depleted, payroll taxes and other incoming revenue would continue to fund a substantial share of scheduled benefits. So, Congress still has time to change the program's financing trajectory.

For now? Check your earnings record and estimated benefits through your Social Security account. Younger workers can use the estimates to understand what they may receive under current law, while those nearing retirement should compare benefits at different claiming ages and consider how Social Security fits into their retirement income plan.

But also stay tuned. With the 2026 midterms in the books and the 2028 presidential election on the horizon, pay attention to where your representatives stand on Social Security and what they propose to secure its future.

Related

This article is part of a mini-series on the tax impacts of various proposals to shore up Social Security.

• What a Flat-Rate Social Security COLA Could Mean for Retiree Taxes
• How Eliminating the Social Security Tax Cap Could Mean for High Earners

For more on midterm ballot measures, check out our reports: Midterm Election Tax Measures Target High-Income and Property Tax Changes on the Ballot in 7 States.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Giving to charity but missing out on tax benefits

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

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

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

But there are two other factors they forgot about.

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

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

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

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

Tax planning doesn't stop in your 70s

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

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

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

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

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

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

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

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

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

Related Content

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

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

For Americans over 65, a single mistyped digit in a government database can abruptly cut off healthcare and monthly benefits. Each year, thousands of living citizens are mistakenly flagged as deceased by the Social Security Administration (SSA), triggering an automated cascade that halts Medicare, freezes bank accounts and invalidates prescription coverage at the pharmacy counter.

While these errors are rare, when an individual’s Social Security number is accidentally entered into the federal "Death Master File," the fallout can be devastating. Fixing it requires immediate action — starting with an in-person visit to your local Social Security office.

The likelihood of a person accidentally being declared dead is admittedly small. The SSA boasts a 99.7% accuracy rate, with erroneous reports and internal recording errors together accounting for just one-third of 1% of the 2.9 million death records the SSA processes each year. Still, for the 7,000 to 12,000 living people mistakenly recorded as dead on the agency's Numident database annually, that tiny fractional margin of error brings severe, life-altering consequences.

A recent audit from the Office of Inspector General (OAIG) revealed that 24,219 beneficiaries were erroneously marked as deceased between January 2020 and December 2024. These errors occurred in the Numident — the SSA’s master database of Social Security card records — which directly feeds the government’s widely shared Death Master File.

The immediate fallout: Cut benefits, lost Medicare, frozen accounts

Once the SSA enters a death record into its core database, it publishes weekly and monthly updates to the public-facing or restricted Death Master File (DMF). Major credit bureaus, banks, insurance companies, state tax authorities and medical systems subscribe to these updates to automatically cross-reference their own databases.

The fallout hits every area of your life:

• Benefit termination/income stoppage: Social Security, SSI, SSDI, or pension direct deposits are abruptly suspended or recalled.
• Medicare cancellation: The Centers for Medicare & Medicaid Services (CMS) terminates healthcare coverage, leading to denied medical claims and the inability to fulfill prescriptions.
• Frozen financial accounts: Banks and credit unions lock checking accounts, stop automatic bill pay and reject direct deposits.
• Credit destruction: Credit bureaus flag the SSN as deceased, instantly freezing lines of credit and credit card access.
• Employment and tax issues: Employers and the IRS may also be notified, which can complicate tax filings and affect your ability to work.

The road back: Fixable, but it takes persistence

While a simple data entry error can trigger this nightmare, it is fixable. Restoring your identity and financial stability will require diligence and patience, likely involving multiple calls and visits.

Keep a detailed log of every conversation, noting dates, representative names, and key details. If progress stalls, reach out to your congressional representative's office — staff members regularly help constituents navigate federal agency roadblocks. You can find contact information online through Find Your Representative or by calling the U.S. Capitol switchboard at (202) 224-3121.

Once you are verified, the SSA issues an official document called the "Erroneous Death Case - Third Party Contact" Letter. To recover your life, you must share this letter with banks, doctors and credit bureaus to compel those institutions to reopen your accounts while the electronic clearinghouse catches up.

Getting your benefits back: 4 clear steps

• 1- Contact the SSA immediately. As soon as you discover the error, contact the Social Security Administration. You must visit a local Social Security office in person, as the SSA does not resolve erroneous death markers over the phone or online. To find an office, use the online Office Locator or call 1-800-772-1213 (TTY: 1-800-325-0778) Monday–Friday, 8:00 a.m. to 7:00 p.m. local time.
• 2- Bring proof of life. You will need to bring one or more original, unexpired forms of identification to prove that you are, in fact, alive. This may include:
  • Passport
  • Driver's license
  • Employee ID card
  • Military record
  • School ID card, record or report card
  • Marriage or divorce record
  • Adoption record
  • Health insurance card (except a Medicare card)
  • Certified copy of medical record
  • Life insurance policy
  • Court order for name change or
  • Church membership that establishes your identity.
  • Other documents that can help establish your identity, such as a birth certificate, utility bill or recent pay stub.
• 3- Request an "Erroneous Death Case" notice. Once the SSA corrects your record, they can provide you with a notice that states the death report was an error. This is a crucial document. Ask for it by name, and ask for more than one copy. It will help you unfreeze bank accounts, restore benefits and access medical care.
• 4- Notify other agencies. Use this notice to contact all other affected institutions, including:
  • The IRS, to ensure your tax filings are not rejected. Call 800-829-1040 from 7 a.m. to 7 p.m. local time or 844-545-5640 to schedule an appointment at your local IRS office.
  • Contact your bank and credit card companies to unfreeze your accounts.
  • Contact the credit reporting agencies (Experian, Equifax and TransUnion) to correct your credit report.
  • Contact Medicare, Veterans Affairs (VA) and other health insurance providers to reinstate your coverage. To reach Medicare, call 1-800-MEDICARE (1-800-633-4227) — available 24 hours a day, 7 days a week (except some federal holidays) or 1-877-486-2048 if you use a TTY. You can reach the VA health benefits hotline by calling 877-222-8387, available Monday through Friday, 8:00 a.m. to 8:00 p.m. ET

The root of the error: How living people get flagged as dead

Around 7,000 to 12,000 living Americans are mistakenly marked as dead by the SSA each year. The OAIG audit noted that simple typographical slips by hospital workers, funeral directors and SSA clerks most often result in people being accidentally declared dead.

In calendar year 2025, the SSA posted approximately 5.6 million death records to the DMF. The SSA subsequently determined that 12,504 records (0.22%) were erroneous, according to an OAIG press release.

Common causes for the error included:

• Typographical errors: A clerk mistypes a single digit of a Social Security Number (SSN) when logging a death report.
• Similar names/shared info: Confusion between family members with identical names (e.g., a father and son who are "Jr." and "Sr.") or similar birth dates.
• Fraud or identity theft: Misreported numbers on formal documentation.

The path forward: What it takes to untangle the red tape

Fixing an erroneous death record eventually restores bank accounts, Social Security benefits and Medicare coverage, but it does not undo the financial trauma or medical risks endured during the blackout. Recovering from an erroneous death report requires overcoming many administrative hurdles, an in-person identity verification process and persistent follow-up to restore revoked benefits and services.

With persistence, however, you can successfully reclaim your identity, reinstate every benefit you've earned, and put this ordeal behind you.

Related Content

• 9 Changes Coming to Social Security in 2027
• How to Apply for a Social Security Replacement Card
• The Cost of Dying: Burial and Cremation Prices by State
• Why 'Locking' Your Social Security Number Is the New Credit Freeze

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

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

Roth conversion basics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Your future tax liability

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

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

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

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

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

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

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

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

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

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

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

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

How to get ahead

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

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

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

Related Content

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

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

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

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

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

For others, $2 million might not.

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

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

$2 million, 2 very different retirements

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

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

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

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

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

For Dave and Susan, $2 million seems plenty.

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

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

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

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

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

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

But here's where they might get into trouble.

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

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

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

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

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

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

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

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

What $2 million actually has to accomplish

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

That's almost never true.

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

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

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

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

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

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

5 questions that determine if $2 million is enough

1. How much will you spend?

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

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

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

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

3. How much money will you keep after taxes?

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

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

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

4. How will you invest your money?

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

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

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

5. What type of legacy will you leave?

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

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

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

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

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

Is $2 million enough to retire at 65?

For many retirees, the answer is yes.

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

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

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

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

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

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

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

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

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• Retirement Savings On Track? How Much You Should Have By 60 and 65
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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.

Sir Patrick Stewart, the Shakespearean actor best known for playing Captain Jean-Luc Picard in "Star Trek" and Professor Charles Xavier in "X-Men," not only captured the hearts and imaginations of fans worldwide but also inspired countless others through the reflections he shared over the decades.

Stewart was candid about his life, from growing up in a poor, working-class household in Yorkshire, to becoming a world-renowned stage and screen legend, and all the hard-won triumphs and setbacks in between. While Stewart is no longer with us, having passed away at 86, these quotes offer retirees a map to live by.

Five Life Lessons from Sir Patrick Stewart

1. "I am not averse to risk-taking, and I don't judge myself. I used to do that so much. That gets in the way of spontaneity. So I'm braver now than I was when I was much younger."
NPR's Fresh Air interview, July 2, 2020

Maybe you planned to save $2 million for retirement but only have $500,000. Or maybe you planned to age in place but have no choice but to sell your home. Just because things didn't go the way you expected doesn't mean you have to beat yourself up or stop living. You can still take risks in retirement. That's what Sir Patrick is conveying with these reflections.

For example, instead of lamenting the house you had to leave behind, you might take a chance on downsizing to an active community where you can make new friends.

2. "I am now in a place where I can feel and see gratitude for what I have been given. I don't just mean in terms of talent. I mean in terms of friendships."
Bullseye With Jessie Thorne interview, December 12, 2023

Work, work, work. We spend decades working, amassing money for retirement. Then the day comes, and we are in a state of despair. We don't know what to do with our time or our money, so we do nothing.

But that's not what retirement should be about. It should be a time to feel grateful for all the hard work you put in and to enjoy the fruits of your labor.

If you're like the countless retirees who are reluctant to spend, create a withdrawal plan that permits you to do so. Some popular approaches include the 4% rule, the bucket approach and the guardrails strategy.

3. "You will never achieve success by insuring against failure."
Roundtable Interview with Patrick Stewart and Stephen Belber on Match, April 28, 2014

Are you thinking of moving to a new city in retirement, or have you always dreamed of starting a new business for your second act? If you have big dreams and the only thing stopping you is fear of failure, then don't let it.

That doesn't mean you should take out a loan against your retirement savings to go back to college or launch a startup, but if you have money set aside, you shouldn't let fear of failure stop you from pursuing your dream. At last check, more than half the businesses in America are owned by people 55 and older.

4. "Four years ago I became a skier, I'm officially now an intermediate level skier, and that was at the age of 69." Esquire interview, August 4, 2015

You might think it's too late to go on that trip, pursue that degree or pick up that hobby, but as Sir Patrick shows us, you are never too old to live.

If Sir Patrick could learn to ski at 69, you can pursue your passion in retirement whether you are 60 or 80. Many retirees get stuck in a trap of thinking they're too old to try new things such as skiing, but if you're healthy, you should get out there.

5. "I have been inclined to be solitary in huge chunks of my life. I don't think that's a good thing anymore. I think the interaction of being with people, especially people you like, is very important for keeping you sharp, alert, active and connected."
AARP interview, March 18, 2014

One of the hardest adjustments in retirement is losing the social connections you had at work. For many people, work provides their second families and their best friends, and when they retire, it's gone.

Replacing those social connections is crucial. Without the interactions of people you care about, it could lead to loneliness and depression. Take a page from Sir Patrick, and spend some time with friends and family or find ways to stay connected.

Get out there and live

Whether Sir Patrick was reflecting on taking risks or feeling grateful, one thing is sure: this icon lived life to the fullest and made a profound impact on his grieving fans worldwide.

If there’s one lesson to take away from his remarkable journey, it’s that it’s never too late to reinvent yourself. Whatever that means to you, make sure to get out there and live.

Now, make it so.

Editor's note: This article is part of an ongoing series featuring the best retirement quotes and wisdom from top financial experts, leaders, and public figures. Other articles feature Warren Buffett, Michael Jordan, Mark Cuban, Jimmy Buffett, Dr. Seuss, Bruce Springsteen, Bob Dylan, Vince Lombardi, Ronald Reagan, Ozzy Osbourne, Stevie Nicks, George Carlin, Billy Joel, Dave Ramsey, Lionel Messi , Cristiano Ronaldo, and Dolly Parton.

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Deciding between cremation and burial can be difficult, whether you're planning funeral arrangements for a loved one or preplanning your own final arrangements. You'll need to weigh cultural and personal wishes against a complex landscape of costs and changing industry standards.

Price is also a factor. According to the National Funeral Directors Association (NFDA) 2023 General Price List Study, a traditional funeral service featuring a viewing and burial has a median cost of about $8,300, while a funeral paired with cremation costs about $6,280.

For those seeking a simpler and more budget-friendly approach, direct cremation — which skips formal viewings and ceremonies — typically ranges from $1,000 to $3,500.

These price points reflect a significant cultural shift in how Americans prefer to handle remains (or "final disposition"). Cremation is now the majority choice, with the U.S. cremation rate reaching 63.4%, compared with a traditional burial rate of 31.6%, according to the 2025 NFDA Cremation and Burial Report (PDF).

Driven by shifting consumer preferences and cost considerations, the cremation and burial industry projects this trajectory to continue climbing — with every U.S. state anticipated to surpass a 50% cremation rate by 2035, and national cremation rates projected to reach 82.3% by 2045.

While national medians offer a helpful baseline, they obscure wide regional and state-level variations. The 2026 National Funeral Cost Index gives us a look into burial and cremation costs around the country. Costs fluctuate significantly depending on local overhead, real estate prices and state regulations, meaning families face vastly different price tags depending on where they live.

Don't count on the Social Security death benefit to help cover the costs. The $255 lump sum death payment has been the standard since 1954, when the average funeral cost $700. Even then, the benefits are payable only to surviving spouses and to dependent children under limited circumstances.

There are alternatives to traditional burials and cremation, but their availability is limited even though interest in them is growing. These options include a green burial, human composting and water cremation.

Burial costs

Much like housing, traditional burial costs across the United States show a steep price gap that highlights how geography, local economies and logistics influence final arrangements.

Traditional burial costs vary dramatically across the country due to a mix of economic and geographic pressures. In high-cost regions such as the Northeast and Hawaii, steep real estate prices, high commercial overhead and land scarcity drive up facility and plot fees. For island markets such as Hawaii, geographic isolation adds an extra layer of expense through the cost of importing caskets and materials.

Conversely, lower-cost states benefit from suburban and rural settings with minimal operating overhead, while varying state regulations and local wage differences further shape the final price tag families face.

Another major cost factor is the extra expenses not included in a "traditional funeral." Quoted averages typically cover only basic professional services, embalming, body preparation, facility use for a viewing and ceremony, a hearse and a casket. The overlooked extras — which can add $3,000 to $8,000 or more to the final bill — include a cemetery plot, grave vault, headstone, flowers, music and obituary notices.

Most expensive states: Hawaii ($11,000) and New York ($10,800) — along with the broader Northeast corridor, including Massachusetts ($10,400) and New Jersey ($10,200) — consistently alternate for the top spot. In these areas, traditional burial costs generally range from $9,000 to $14,000-plus (with major metropolitan centers such as New York City ($14,040) pushing median costs even higher).

Least expensive states: States in the Deep South, such as Mississippi ($5,900), consistently report the lowest traditional burial costs, with averages typically ranging from $5,500 to $7,500.

Cremation costs: Direct vs full service

When families choose cremation, direct cremation — a service in which cremation takes place without formal viewings, embalming or funeral home ceremonies — is the far more popular, budget-driven choice. Nationally, direct cremation averages between $1,000 and $3,500.

By contrast, cremation with a service (which includes a viewing, formal ceremony or gathering) remains a secondary option. While it carries a significantly higher national median average of $6,280, it appeals to families looking to blend the cost efficiency of cremation with traditional memorial rites (PDF).

Most and least expensive states for cremation

Just as with traditional burial, specific state price tags reflect local cost of living, commercial real estate overhead and local provider competition. Depending on the specific service level, Hawaii and New York once again contend for the highest costs nationwide, while states in the South and rural West consistently offer the lowest baseline pricing for cremation.

Direct cremation. Hawaii tops state-level direct cremation baselines at $3,000, followed closely by Alaska ($2,800), New York ($2,600), and Massachusetts ($2,500). Mississippi, Oklahoma and West Virginia share the lowest starting baselines at $1,400.

Cremation with service. Hawaii leads again with an average of $8,200, with New York ($8,000), California ($7,800) and Massachusetts ($7,800) trailing behind. Mississippi offers the lowest full-service average at $4,800, followed by Arkansas and Oklahoma at $5,000.

Burial and cremation costs for all 50 states