You might know that certain ages matter in retirement planning: 59½, 62, 65 … these numbers come up in articles, in conversations, in the back of your mind when you're wondering whether you're on track.

Knowing a number exists and knowing what to do with it are different things.

I've worked with many people in their 50s and 60s who pay close attention to their finances for the first time, or finally getting serious after years of unmet intentions.

What I've consistently found, as a financial planner and educator with more than a decade of experience, is that the milestones themselves aren't the hard part; it's that nobody lays them out in order.

Here's my attempt to do that.

Age 50: The catch-up window opens

Turning 50 unlocks one of the first major financial planning opportunities you might not be fully taking advantage of, and I say that having watched plenty of people sail right past it.

Once you reach age 50, you can make catch-up contributions to your retirement accounts, putting away more than the standard annual limit.

For 2026, the standard 401(k) contribution limit is $24,500. At 50, you can add an additional $8,000, bringing your total to $32,500 per year.

For IRAs, the 2026 limit is $7,500, with a $1,100 catch-up for those 50 and older, for a total of $8,600.

If you feel behind on retirement savings, this is the moment to recalibrate. The math of compounding can still be significant in your 50s. Extra contributions in your 50s still have 10 to 15 years to grow before you need them.

Age 55: The HSA catch-up and the rule of 55

Two useful planning tools arrive at age 55.

If you're enrolled in a high-deductible health plan, you become eligible for a $1,000 catch-up contribution to a health savings account (HSA).

For 2026, the standard HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage. The catch-up brings your individual limit to $5,400 and family limit to $9,750 if age 55 or older.

An HSA is one of the most tax-efficient accounts available for retirement: Contributions are pretax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free as well.

You must be enrolled in an HSA-eligible high-deductible plan to contribute, and you generally can't make HSA contributions for any month you're enrolled in Medicare.

The second tool is the Rule of 55. If you separate from service during or after the calendar year in which you turn 55, you might be able to take penalty-free withdrawals from your current employer's 401(k) or 403(b).

This rule doesn't apply to IRAs, and your plan must permit these distributions, so confirm the rules with your plan administrator before relying on this strategy.

Age 59½: Penalty-free withdrawals begin

If you think 59½ is too old to celebrate a half birthday, think again.

At age 59½, you can begin taking withdrawals from your IRAs and 401(k)s without the 10% early withdrawal penalty. You'll still owe income taxes on pretax distributions, but the penalty disappears.

Many people are better off leaving retirement assets untouched as long as possible. Reaching 59½ doesn't mean you should start withdrawing. It means you have flexibility you didn't have before.

I've had clients who spent years feeling trapped by the penalty, not realizing how close they were to having real options. Knowing the gate is open changes how people think about their plan, even when they have no intention of walking through it yet.

Age 60: A different door for surviving spouses

Most people assume their own Social Security benefits can't start until age 62. For widows and widowers, there's an earlier option.

Surviving spouses can begin collecting Social Security survivor benefits as early as age 60. Claiming at age 60 generally means accepting a permanently reduced survivor benefit, so the timing deserves careful consideration.

The planning angle that's often missed is this: Survivor benefits aren't subject to deemed filing. A surviving spouse might be able to claim survivor benefits first and let their own retirement benefit continue growing, then switch later at 70 for a higher amount. The reverse approach works, too.

I've heard from widows who had no idea this flexibility existed and had already left significant money on the table by defaulting to whatever Social Security suggested at the window.

The difference between a thoughtful strategy and a default one can add up to tens of thousands of dollars in lifetime income.

If you've lost a spouse and haven't had this conversation with a financial planner or a Social Security specialist, have it before you file anything.

Ages 60 to 63: The super catch-up

The SECURE 2.0 Act introduced a higher catch-up limit for people in this specific age range, and most haven't heard of it yet.

Individuals age 60, 61, 62 and 63 who participate in a 401(k), 403(b), governmental 457 plan or the federal Thrift Savings Plan are eligible for a super catch-up contribution.

For 2026, that limit is $11,250, which is significantly more than the $8,000 catch-up available at 50. Someone in this window can contribute up to $35,750 to their 401(k) in 2026 alone.

For anyone trying to maximize retirement savings in their final working years, this four-year window can be one of the most valuable opportunities to accelerate tax-advantaged savings.

One important planning note: If your prior-year FICA wages from your current employer exceeded $150,000 in 2025, SECURE 2.0 generally requires your catch-up contributions to be made as Roth contributions using after-tax dollars.

Not every employer plan has implemented these changes in the same way, so it's worth confirming with your plan administrator how your plan handles catch-up contributions.

Age 62: Early Social Security

At age 62, you can begin claiming your own Social Security retirement benefit.

Claiming before your full retirement age reduces your monthly benefit permanently, and the reduction can be substantial depending on how early you file.

Meanwhile, delaying benefits until age 70 results in a higher monthly benefit because delayed retirement credits stop accruing at age 70.

For most people in good health, the math tends to favor patience, but longevity, cash flow needs and your overall plan factor into the right answer.

Age 63: Watch your income for Medicare's sake

This is the one that tends to sting the most when people find out about it too late.

Medicare uses a two-year lookback to set your premiums, which means your income at 63 directly affects what you'll pay when you first enroll at 65. If your income exceeds certain thresholds in those lookback years, you'll owe IRMAA, or the income-related monthly adjustment amount, an additional surcharge on top of your standard Medicare Part B and Part D premiums.

In 2026, IRMAA kicks in at $109,000 in modified adjusted gross income for single filers and $218,000 for married couples filing jointly.

The surcharges operate as cliffs, not gradual phase-ins. Crossing a threshold by even a dollar triggers the full surcharge for that tier, which can add thousands per year to your Medicare costs.

Before generating a large amount of additional income, such as from a Roth conversion or significant capital gains, estimate both the income tax consequences and any potential IRMAA surcharge. Looking at only the tax bill can lead to expensive surprises two years later.

Not sure if you're going to be impacted by IRMAA? Take advantage of a retirement planning tool to project your income sources and see for yourself. (Note: I am head of support and a financial planning educator at Boldin.)

Age 64 and 9 months: Start your Medicare clock

For most people, Medicare's initial enrollment period opens three months before your 65th birthday and closes three months after the month you turn 65.

Missing this window can result in late enrollment penalties that stay with you permanently. Set a reminder now.

Medicare's rules are complex enough that it pays to spend some time with a specialist before the window opens, not after.

Age 65: Medicare begins, HSA contributions end

At age 65, you're eligible for Medicare. Once you're enrolled in any part of Medicare, you generally can't make HSA contributions for any month you're covered by Medicare.

Funds already in the account remain yours to use for qualified medical expenses tax-free, and you can use the money for any expense without penalty, though non-medical withdrawals will be taxed as ordinary income.

Many people contribute aggressively to their HSAs in their late 50s and early 60s specifically to cover healthcare costs in retirement. If that's your strategy, plan around the contribution cutoff.

Age 70½: Qualified charitable distributions

At age 70½, a valuable tax planning opportunity becomes available for people who are charitably inclined and own an IRA.

A qualified charitable distribution allows you to direct up to $111,000 per year (in 2026) from your IRA directly to a qualified charity, and if you're married, your spouse can do the same from their own IRA, for a combined total of $222,000.

If you're already subject to required minimum distributions (RMDs), the amount counts toward satisfying your RMD for the year while remaining excluded from your taxable income. This is a useful tax planning tool, particularly for people who take the standard deduction.

Ages 73 to 75: RMDs

At some point, the IRS requires you to start withdrawing from tax-deferred retirement accounts regardless of whether you need the money. RMDs catch more people off guard than almost anything else in retirement planning.

When RMDs begin depends on your birth year. If you were born from January 1, 1951, to December 31, 1959, they start at 73. If you were born on or after January 1, 1960, they begin at 75.

Failing to take your RMD results in a 25% penalty on the amount that should have been withdrawn. The penalty might be reduced to 10% if the mistake is corrected in a timely manner and other IRS requirements are met.

The real issue is that large RMDs can push you into a higher tax bracket, make more of your Social Security taxable, and trigger IRMAA surcharges you weren't expecting.

Planning around RMDs in advance, through Roth conversions, charitable giving or careful withdrawal sequencing, is one of the most underrated conversations in retirement planning.

These milestones don't exist in isolation

Every conversation I have with someone approaching retirement eventually comes back to the same point: These decisions don't happen in a vacuum.

How you handle catch-up contributions in your 50s affects your tax situation in your 60s, which affects your Social Security timing, which shapes your RMD exposure a decade later. The decisions compound over time in both directions.

You don't have to figure this out alone. Whether you work with a financial planner or use retirement planning software, mapping these milestones in advance and testing different scenarios can help turn a long list of rules into a coordinated retirement planning strategy.

The more decisions you make proactively, the fewer costly surprises you're likely to face later.

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

Most "America 250" travel guides will point you toward the crowded, cobblestoned streets of Philadelphia or Boston — and while those historic hubs certainly earned their place in the history books, the true American story doesn't end at the original 13 colonies. If you are looking to give your grandchildren a deeper sense of the nation's heritage, the best classroom isn't a packed museum line; it's the open road.

These four itineraries trade predictable monuments for sweeping coastlines, ancient mountain passes and hidden historic stops, offering a compelling backdrop for passing down stories and building memories.

Out West: the Pacific Northwest & the corps of discovery

Trace the final leg of the expedition that reshaped America: a road trip following the Columbia River Gorge from Portland to Astoria's Fort Clatsop, ending where Lewis and Clark first saw the Pacific at Cape Disappointment.

The route: Portland to Columbia River Gorge to Astoria (Ft. Clatsop) to Cape Disappointment

Columbia River Gorge: Drive past stunning waterfalls and stop at the Columbia Gorge Discovery Center to learn how the expedition navigated these treacherous waters. The Columbia Gorge Discovery Center’s Raptor Program is capable of wowing kids and adults. You can visit the enclosure of resident bald eagles Liberty and Ferguson, ages 17 and 23 respectively, for free.

Lewis and Clark National Historical Park (Fort Clatsop): Located in Astoria, Oregon's oldest city, is a replica of the log fort where the expedition spent the brutal winter of 1805–1806. Kids can interact with rangers dressed in buckskins, try their hand at making candles from tallow and explore the dense coastal rainforest.

Cape Disappointment State Park: Cross into Washington to see where the expedition finally saw the Pacific Ocean. The dramatic clifftop lighthouse is unforgettable. It's still in use and open for tours. Visitors can also wander through the ruins of World War II-era bunkers and coastal defense batteries.

• Summer bonus: Chasing waterfalls & picking berries. Summer brings long, gloriously sunny days to the Pacific Northwest. Stop at the 620-foot Multnomah Falls and hike without needing a rain jacket. Take a detour through the Hood River Fruit Loop, where the kids can pick fresh berries and cherries.
• Fall bonus: The salmon run & coastal mist. October brings the legendary salmon runs to the Columbia River. You can visit the Bonneville Lock and Dam to watch thousands of massive salmon leap up the underwater "fish ladders." Plus, the coast at Cape Disappointment gets its signature dramatic, misty autumn aesthetic.

The South: The southern campaign & Overmountain victory (North Carolina & South Carolina)

While the Northeast gets the credit for 1776, the Revolutionary War was actually won in the South. This trip blends rich Southern history with the spectacular background of the Great Smoky Mountains. The Carolinas are hosting extensive "SC250" and "NC250" events, featuring large-scale autumn encampments and live blacksmithing.

The route: Charlotte (NC) to Kings Mountain to Cowpens (SC) to Asheville (NC).

Kings Mountain & Cowpens National Battlefields: These two parks preserve the sites of back-to-back American victories. The Kings Mountain State Park visitor center offers an interactive junior ranger program that explains how frontier "Overmountain Men" turned the tide of the war. Cowpens National Battlefield commemorates a decisive battle in the Revolutionary War, which ended in defeat for British forces under General Charles Cornwallis.

The mountain finish: End the trip by driving into Asheville to experience the lush greenery in the summer and peak foliage of the Blue Ridge Mountains in the fall.

• Summer bonus: Lake Lure & mountain streams. Beat the Southern summer heat by sliding into the cool, mountain waters. You can stop at Lake Lure (where Dirty Dancing was filmed) for a beach day surrounded by green mountains, or take the kids gem mining and tubing down the French Broad River.
• Fall bonus: Peak Blue Ridge foliage & reenactments. October is the absolute pinnacle for leaf-peeping in Asheville. Additionally, early autumn is when the park service hosts the Overmountain Victory Trail celebrations, featuring massive living-history encampments where volunteers walk the exact path the frontier militia took to the battlefields.

The Southwest: a crossroads of cultures

To truly celebrate the American tapestry for America 250, look to the Southwest, where Indigenous, Spanish and Anglo histories collided to shape the nation. Long before the first bricks of the thirteen colonies were laid, these high-desert landscapes were home centuries of rich cultural exchange.

The route: Albuquerque to Santa Fe to Taos

The Santa Fe Plaza: Celebrate America's diverse roots in the oldest capital city in the U.S. Families can explore the Palace of the Governors, part of the New Mexico History Museum, and buy authentic jewelry directly from Native American artisans under the portal.

Pecos National Historical Park: Just outside Santa Fe, this park features the ruins of an ancient Pueblo village alongside a 17th-century Spanish mission church, right on an old Santa Fe Trail trade route. It brilliantly illustrates the centuries of history that predated 1776.

Taos Pueblo: Take a day trip to a living Native American community that has been inhabited for over 1,000 years. Located at the base of the beautiful Sangre de Cristo Mountain range, this National Historic Landmark is open on weekends only from 9 am to 4 pm. If you've got an American Girl Doll fan, you can visit the Hacienda de los Martinez, which was the inspiration for the doll Josefina Montoya's home. It's a seven-minute drive from downtown Taos.

• Summer bonus: Santa Fe Indian Market & alpine hikes. While lower elevations are hot, Santa Fe and Taos are at high altitudes and stay quite comfortable. (For those who might be sensitive to altitude, keep in mind that you may need time to acclimate.) August brings the world-famous Santa Fe Indian Market, a celebration of Native American art, music and food. You can also take the chairlift up Taos Ski Valley for high-alpine summer hiking.
• Fall bonus: The balloon fiesta & roasting chiles. Early October features the Albuquerque International Balloon Fiesta, when hundreds of hot-air balloons fill the sky at dawn. The smell of autumn, and the official "state aroma", in New Mexico is the aroma of fresh green chiles being roasted in giant tumbling drums on every street corner.

The Midwest: innovation, labor & The Great Migration (Illinois & Indiana)

The trip through the Midwest tells the story of how America transformed from an agrarian society into an industrial superpower. Taking a road trip through Illinois and Indiana reveals the grit, innovation and diverse voices that built modern America.

The route: Chicago (Pullman) to Indiana Dunes to Fountain City (Coffin House) to Indianapolis

The Pullman Centennial: Visit the Pullman National Historical Park, a preserved 1880s company town that highlights the American labor movement and the pivotal role of the African American Pullman Porters.

Indiana Dunes National Park: Just across the state line, hike towering sand dunes framed by brilliant oak trees, celebrating America's conservation and National Park legacy. As part of their "The 1966 Hiking Challenge," the park is offering 19 weekly ranger-led hikes every Saturday at 8:00 am through August.

The Indiana State Museum (Indianapolis): They are hosting dedicated America 250 programming, including exhibits on the Underground Railroad in the Midwest, showcasing the region's commitment to freedom and human rights.

The "Grand Central Station" legacy: This unassuming brick house in Fountain City, Indiana, is where Levi and Catharine Coffin helped more than 1,000 freedom-seekers escape to safety. It's arguably the most successful "station" on the entire Underground Railroad.

They have an interactive visitor center next to the historic home that does a fantastic job of translating this heavy history into digestible, moving stories for children. You can tour the home and see the internal hiding places, including a hidden upstairs closet where entire families were concealed behind furniture, and a basement kitchen built with a secret indoor well so neighbors wouldn't see the Coffins hauling extra water for guests.

• Summer bonus: Lake Michigan beach days. This history trip can turn into a legitimate beach vacation. Indiana Dunes National Park features miles of sandy beaches and warm lake water that feels like the ocean without the salt. In Chicago, you can take a boat cruise down the river to stay cool.
• Fall bonus: Apple orchards & haunted trails. The drive from the Indiana Dunes down to the Coffin House takes you right through Indiana’s agricultural heartland. Stop at Huber's Orchard or Tuttle Orchards for fresh apple cider slushies, pumpkin picking and corn mazes. Additionally, Indianapolis hosts fantastic historic autumn ghost tours that weave local history with spooky seasonal fun (best for older kids or teens).

More on America's 250th Birthday

• America's Cost of Living at 200 vs 250: How Affordable is American Life Now?
• America at 250: The 3 Economic Headaches That Haven't Changed Since 1976
• How Has Retirement Changed in the Last 50 Years? Take Our Quiz
• Financial Advice From America's Founding Fathers
• Which Presidents Are on the Social Security Payroll?

After 43 years advising families through nearly every kind of wealth transfer imaginable, I've noticed something.

The families who struggle almost never struggle because of the tax plan. They struggle because nobody had a real conversation before the money moved.

That's not how most coverage of the Great Wealth Transfer sounds. Trusts, tax brackets and estate structures dominate the conversation — and for good reason.

An estimated $124 trillion is projected to change hands in the U.S. over the next two decades, and a lot of it runs through complicated legal and tax mechanics. Getting those right matters.

But mechanics aren't what decides whether a family holds together or comes apart once the money actually moves. I've watched technically flawless estate plans blow up because the heirs were blindsided by decisions they'd never once discussed.

I've also watched messier, less elegant plans work just fine, because the family had already done the harder work of talking to one another.

Here's something that should concern every family with real assets on the line. The Federal Reserve's Survey of Consumer Finances found that the average inheritance families actually received came in well below what they expected to receive, and the gap was largest among the wealthiest families surveyed.

Most people read that as a planning or market-timing issue. I read it as a symptom. If your family's expectations and the actual plan don't match, it's a sign the plan was never really discussed out loud. The dollar figure is just the first thing to surface.

The conversation that gets skipped

Early in my career, I learned a set of principles from my mentor, Joe Gabriele, that I've carried ever since. Chief among them: Attack problems head-on, with complete transparency. That applies to markets. It applies just as much to families.

Most parents I work with have a will. Many have trusts. Far fewer have ever sat their adult children down and explained why the plan looks the way it does, what they'll be responsible for or what the family actually expects of them once the money arrives.

I had a client years ago, a business owner worth several million dollars, who built a detailed estate plan and never once discussed it with his three kids.

When he passed, one child assumed the family business would be split evenly. Another had quietly been promised it outright, years earlier, in a conversation nobody else knew about.

The estate plan was airtight. The family took over a year to speak to one another again.

Money didn't break that family. Silence did.

What I ask families to do instead

I don't tell clients to simply "loop in the kids." That's not specific enough to be useful, and vague advice rarely survives contact with an actual family.

What I ask them to do is sit down, together, and walk through these questions before a single dollar moves:

• What is each person actually going to inherit? In plain terms, not legal language.
• Why was the plan structured this way? What was the reasoning?
• What responsibilities come with it? A business, a property, a caregiving role for a sibling?
• What does the family want this money to accomplish two generations from now?

None of these require a lawyer in the room. They require the parents to be willing to have an uncomfortable conversation while they're still healthy enough to lead it.

I've sat in on dozens of these meetings. They're rarely as bad as clients fear, and the families who have them almost never end up blindsided later.

Why this matters more for advisers, and for families, than people realize

I'm at a stage in my career where I think about succession constantly, not just for my clients but for my own practice. My son and business partner are actively involved in the business today.

What I've learned firsthand is that transferring a book of business is the easy part. Transferring the judgment, the relationships and the reasons behind decades of decisions is the hard part.

It has to be modeled and explained. It can't just be inherited by default.

Families face the same challenge with wealth. A trust document tells your heirs what they'll receive. It doesn't tell them why, and it doesn't prepare them to carry it forward responsibly.

That gap is where families come apart, and it's entirely preventable.

Where to start

If you're in the position of planning a transfer, start smaller than you think you need to. Pick one conversation, maybe the reasoning behind your estate plan, and have it this year.

If you're an adult child who suspects your parents haven't had these conversations, you can be the one to raise it. In my experience, most parents are relieved when their kids ask.

The tax and legal mechanics of the Great Wealth Transfer will get sorted out. That's what estate attorneys and advisers are for.

The part that actually determines whether your family thrives afterward is the conversation nobody wants to schedule. Schedule it anyway.

Related Content

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• How to Organize Your Financial Paperwork for Your Heirs
• The Seven Worst Assets to Leave Your Kids or Grandkids
• What Is a Good Inheritance? 6 Great Assets to Keep an Eye On
• Think You're Too Busy to Do an Estate Plan? In 3 Hours (Seriously), You Could Save Your Heirs Months (or Years) of Stress and Heartache

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.

Signing up for Medicare isn't as clear-cut a process as some might think. That's because enrollees have a big decision to make — stick with original Medicare (Parts A and B) and pair it with a Part D drug plan, or sign up for an all-in-one Medicare Advantage plan.

As of February 2026, more than 35 million people were enrolled in a Medicare Advantage plan. And enrollment in Medicare Advantage has increased steadily in recent years, with 19% of eligible Medicare beneficiaries signing up in 2007 versus 54% in 2025, reports the Kaiser Family Foundation (KFF).

It's easy to see why so many people find these plans appealing. Not only do many Medicare Advantage plans come with $0 premiums, but most also offer supplemental benefits beyond what original Medicare covers.

Plus, some enrollees like the security of an annual cap on out-of-pocket spending, which Medicare Advantage plans offer. Original Medicare does not, though a supplement (Medigap) can help cap costs to a large degree.

That doesn't mean Medicare Advantage plans are perfect, though. Enrollees who ditch Medicare Advantage often cite reasons such as limited provider networks and strict prior-authorization rules.

Mark Prip, a Medicare supplement insurance agent at Policy Guide, says, "If you've kept up with the headlines over the last year or two, you've seen Medicare Advantage undergo a significant shift. More than a million Medicare beneficiaries have been affected by Medicare Advantage plan terminations, consolidations, and service-area exits due in part to lower federal reimbursement rates."

Prip also explains that to combat these lower reimbursement rates, many insurance companies have been shrinking provider networks and ending contracts with large hospital systems across the country.

Given these and other constraints, there are certain people for whom Medicare Advantage simply may be a poor fit. Here are three signs you may want to stick with original Medicare instead.

1. You don't have great health

There's a common saying that people in good health tend to do well with Medicare Advantage, while those in poor health tend to lose out financially. Scott R. Maibor, Managing Director at Senior Benefits Boston, says there's some truth to that generalization.

"For someone with multiple or severe health issues, a Medicare Advantage plan may prove to be ultimately more expensive than traditional Medicare with a supplement due to the higher copays and maximum out-of-pocket limit," he says.

Just beware of the "Medigap trap." Those supplemental insurance policies that wrap around Original Medicare can be almost impossible to get if you enroll in Medicare Advantage first and try to switch back later. In most cases, you can only sign up for Medigap plans without facing medical underwriting during the first six months after you become eligible for Medicare, though state rules do vary.

Another reason you might prefer original Medicare if you have a chronic illness? Out-of-pocket prescription drug costs under Part D are capped at $2,100 annually (for 2026).

Danielle K. Roberts, co-founder of Boomer Benefits, a national Medicare insurance agency, says Medicare Advantage plan maximum out-of-pocket limits matter more than some people realize.

"If you're managing a serious illness or anticipating frequent medical care, make sure to ask yourself, 'If I had a year with significant medical expenses, could I comfortably afford to reach that maximum?'" she says.

On the other hand, Roberts points out that Medicare Advantage plans aren’t automatically the wrong choice just because someone has health issues.

"They can be an excellent idea for many people, especially those with certain health conditions or life situations who qualify for both Medicare and Medicaid," she says.

Roberts also explains that Medicare Special Needs Plans (SNPs), a type of Medicare Advantage plan, are designed specifically for people with certain health conditions or who are dual-eligible for Medicaid and are "actually one of the strongest examples of how Medicare Advantage can work well."

As of February 2026, more than 8 million people were enrolled in an SNP, accounting for 83% of total Medicare Advantage enrollment growth over the previous year, per KFF.

2. You plan to split your time between different ZIP codes or travel frequently

Because Medicare Advantage plans limit enrollees to specific provider networks, Prip cautions that people who travel a lot may run into issues.

"While most plans will cover you out of state for medical emergencies, seeking care at specialty facilities in another state can become a real issue because of Medicare Advantage provider networks," he explains. "So if you're someone who travels frequently or simply wants the option to seek specialty care anywhere in the country, Medicare Advantage may not be the best fit."

Maibor agrees and says snowbirds or retirees with providers in two locations may find it difficult to use a Medicare Advantage plan.

3. You don't have the patience for constantly changing rules and providers

Another issue with Medicare Advantage plans? The rules aren't set in stone. And that could make managing care cumbersome.

"I think the main reason Medicare Advantage may not be a good fit for someone is if they're not comfortable keeping up with the rulebook that comes with these plans," Prip says.

"Whenever we conduct a needs analysis with a client, we ensure they understand exactly how Medicare Advantage works," Prip continues. "For example, I ask them, 'Are you OK knowing that your current medical providers who are in network today may not be in network in the future? Are you OK with having to switch doctors if your insurance company is no longer contracted with your medical providers?'"

Prip says that if you live in a smaller town and don't travel often, Medicare Advantage may be a more suitable option. However, he says that for those who want freedom, flexibility, and fewer surprises, original Medicare with supplemental insurance may be a better, less confusing choice.

How to choose the right Medicare Advantage plan

Medicare Advantage is wrong for some people but right for others. If you're in the latter camp, it's important to know how to choose the right one. To that end, Roberts says the key is not to get hung up on premium costs.

"The first thing I'd do is verify that your doctors, specialists, hospitals, and preferred pharmacy all participate in the plan's network," she says.

Next, Roberts says, you should make sure every prescription you take is covered by the plan's formulary and see what your copays will actually be. From there, you can compare each plan's out-of-pocket maximum.

Roberts says you should also estimate the cost of a major medical event.

"Understanding what you could owe if you need surgery, chemotherapy, or frequent specialist care is just as important," she says.

Finally, Roberts advises, don't let extra benefits be the driving factor. They can seem tempting, but you may not end up needing or using all of them.

"I always tell people to choose the plan that gives them confidence they'll have access to the care they need at a cost they can comfortably afford," she says.

Read More

• What Medicare Covers When You Travel in the US and Abroad
• How Medicare Advantage Costs Taxpayers — and Retirees
• Problems with Medicare Advantage Plans Keep Mounting
• What Does Medicare Not Cover? Eight Things You Should Know

Three decades ago, buying a stock required a phone call to a broker, a sizeable fee and the confidence to act on limited information.

Today, a client can analyze their portfolio, stress-test retirement plans and execute trades before finishing their morning coffee. I've seen this transformation unfold remarkably quickly over the course of my career in this industry, and it is still accelerating.

But as technology has made financial planning faster, cheaper and more transparent, it has also introduced a new category of risk — the illusion of certainty. More data and authoritative-looking outputs do not always produce better decisions. And in retirement planning, the gap between what technology can model and what it cannot understand is consequential.

From gatekeeping to empowerment

The shift in financial access over the past generation has been profound. High fees and limited platforms once kept most investors dependent on intermediaries for even basic transactions. The emergence of online brokerage accounts, zero-commission trading and real-time data fundamentally changed that dynamic — and the nature of the adviser-client relationship itself.

Clients come to meetings better informed, ask sharper questions and hold advisers to a higher standard of transparency. That accountability is healthy. It pushes advisers to be more rigorous and to communicate with greater clarity.

Technology has freed advisers from operational tasks that once consumed a disproportionate share of the day. Investment selection, trade execution and portfolio rebalancing were painstaking manual processes at one time.

Today, they are largely automated. That shift allows advisers to direct their attention toward the work that matters most: Understanding a client's values, goals and concerns in ways that no algorithm can replicate.

The promise — and limits — of artificial intelligence

Artificial intelligence (AI) has become the most discussed tool in financial planning — and with good reason. AI-powered platforms can process vast datasets, generate retirement projections and identify tax-planning opportunities in a fraction of the time it would take a human adviser working manually.

But while I'd recommend using AI tools to prepare for advisory meetings, they can't replace them. When clients arrive having already worked through an initial plan, the conversation moves past the basics to focus on the decisions that are genuinely complex.

• How do we plan for a child with special needs?
• What does retirement look like for someone who intends to keep working part-time?
• How do we balance competing obligations to aging parents and a college-bound teenager?

These are not questions AI can answer without truly knowing the client, and they are often the most significant.

There is also a subtler risk that plays out more than once in any advisory practice. Clients often assume that because a plan was generated by a sophisticated platform, it is fully personalized to their situation.

In reality, AI outputs are only as good as the inputs they receive. A projection built on incomplete or inaccurate information can create overconfidence — a false sense of retirement readiness that goes unexamined because the output looks authoritative. The plan may be technically sound but emotionally incomplete.

It's important to view AI not as a threat but as infrastructure — a foundation that makes advisory work faster and more precise, while leaving the interpretive and relational dimensions of planning firmly in human hands. The financial advisers who thrive in this environment are not those who resist technology, but those who integrate it thoughtfully.

Beyond the headline technology

AI has been behind some of the most consequential improvements in financial planning. Tax planning is a good example. AI-assisted platforms can now model complex strategies around Roth conversion timing, charitable giving and capital gains harvesting — work that previously required hours of manual effort.

Advisers still review and refine these outputs, but the platform does most of the analytical heavy lifting, enabling more sophisticated planning to reach a broader range of clients.

Automation has simplified everyday financial management for clients as well. AI-powered note-taking tools now capture meeting conversations accurately and feed them into client management systems.

Context from one meeting is preserved and accessible in the next, which is incredibly valuable for maintaining continuity in long-term advisory relationships.

Where human judgment remains irreplaceable

Perhaps the clearest illustration of technology's limits can be seen at the transition from accumulation to distribution — the shift from building wealth to drawing it down. This phase involves products and strategies, including certain annuities, long-term care solutions and income-layering approaches that are typically available only through licensed advisers.

A client relying entirely on self-directed digital tools may not know these options exist, let alone understand how to evaluate them. Bridging that gap is what advisers are for.

Then there is behavioral finance. Markets decline. Plans require revision. Life circumstances change in ways no projection anticipated. In these moments, an adviser's role is not primarily analytical — it is steadying.

The conversations that matter during a market downturn, job loss or unexpected health crisis have nothing to do with spreadsheets.

Helping someone hold a long-term perspective when emotion is pulling in another direction is a distinctly human skill, and one with real financial consequences.

Avoiding costly mistakes in times of volatility can impact retirement outcomes as much as years of disciplined saving.

As automation handles more of the technical work, advisers get to focus on the aspects of planning that are most personal, complex and consequential. That is not a smaller role — it is a more meaningful one.

A more useful question

The right question about technology in retirement planning is not whether to use it. The better question is how to use it well and where to recognize its limits.

The clients who navigate this environment most effectively treat digital tools as a starting point, not a final answer. They use AI platforms to build initial frameworks, then bring them to an adviser who can pressure-test the assumptions, account for the intangibles and translate a spreadsheet into a plan that reflects how they want to live. Technology makes that conversation more efficient. It does not eliminate the need for it.

In a world where financial data is more accessible than ever, the scarcest resource in retirement planning is no longer information. It is the discernment to use it wisely —and that is still a very human strength.

Related Content

• In 2026, the Human Touch Will Be the Differentiator for Financial Advisers
• The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills Matter
• Sorry, But AI Alone Doesn't Cut It for Financial Planning
• I'm a Personal Finance Expert: Here's the Truth About Using AI to Plan Your Retirement
• So Your Employer Doesn't Offer a 401(k)? That's a Challenge, Not a Dead End

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.

Think you need $1 million or more to retire happily? You're not alone. Northwestern Mutual's 2026 Planning & Progress Study found that Americans think they need $1.46 million to retire comfortably. High-net-worth Americans think they need even more — an average of $2.67 million. Meanwhile, conventional wisdom says you should save at least 10 times your annual salary.

But here's the reality: many retirees do just fine with far less.

You don't have to spend your entire working life chasing a seven-figure benchmark. Combined with Social Security and smart estate planning, a retirement fund of $300,000 to $400,000 is often enough to enjoy a comfortable, stress-free retirement.

Matt Twiford, fractional CFO and Managing Director of the Pegacom Group LLC, notes, "While it would be nice to have $1 million in retirement, not having it doesn't mean you can't enjoy a good quality of life and feel somewhat financially free."

Here are 6 practical reasons why a "modest" retirement fund may be more than enough to be happy in your golden years.

1. Keeping your spending in check prevents lifestyle creep

On average, Americans have roughly one year's worth of their current annual income saved in tax-advantaged accounts. For most households, that figure hovers around $80,000, according to a SmartAsset study. That's far less than $300,000 and worlds away from the magic number of $1.46 million. Other surveys suggest that only about half of retirees have any retirement savings at all.

Even so, retirees who paid off their mortgage years ago and have annual expenses of about $45,000 to $50,000 avoid the stress that can come with maintaining a more extravagant lifestyle — or lifestyle creep (increased spending on non-essentials and making luxuries feel like necessities).

Paying down or paying off a mortgage and resisting expensive vehicles and gadgets can save thousands over time and make a happy retirement possible even with limited savings.

2. Moving to a lower-cost area can stretch your retirement dollars

Location plays a big role in retirement finances. Living in high-cost states such as Hawaii, California, New York, or Massachusetts takes a much bigger bite out of your budget than living in places such as Tennessee, Arkansas, Oklahoma, or Missouri. Choosing a lower-cost state frees up more money for travel, family, or charitable giving, rather than sinking more cash into housing, taxes, utilities and healthcare.

“My advice would be to start by evaluating where you are and what you have,” says Twiford. “Many retirees own their home outright and have little if any debt, along with a large Social Security check. That's great if that's the case. Others may rent and have few assets, but hopefully some funds from Social Security coming in. Regardless of where you are, analyze it honestly and be truthful with yourself.”

3. Social Security and savings can provide a steady base income

As of 2026, the average monthly benefit for retired workers is approximately $2,071, or about $25,000 annually. While that's a good number, it's probably not enough to live on each month for most people. However, a couple with combined benefits of $40,000 to $50,000 per year only needs about $20,000 to $40,000 from savings to reach a $60,000 to $70,000 lifestyle.

For example, claiming $2,000 per month in benefits at age 62 with a life expectancy of 87 yields $600,000 over your lifetime. But because Social Security payouts grow the longer you delay, waiting until age 70 boosts your annual benefit by roughly 80% compared to starting at 62.

4. Low-risk investing can generate a reliable income

Generating income from investments while also preserving hard-earned savings is key, especially for those with a modest retirement fund. When savings are limited, low-risk investments are often the smartest move. That's because protecting your principal takes priority when you don't have time to recover from market losses.

Most financial experts recommend taking a more conservative investment path as you near retirement. Instead of risky, higher-yield investments, consider low-risk investments, such as bonds, Treasury notes, money market funds, fixed annuities, and CDs.

Robert Laura, retirement expert and co-founder of Retirement Coaches Association, suggests considering preferred stocks, another asset class that doesn't get much attention but can put more income in a retiree's pocket. Preferred stock can be particularly helpful to a retiree with a more modest nest egg. "For example, the iShares Preferred and Income Securities (PFF) ETF currently yields over 5%."

While it's true that all investments carry some level of risk, low-risk assets are typically less likely to fail.

5. Planning for healthcare costs now removes one of retirement’s biggest threats

A healthy 65-year-old woman can expect to spend around $340,000 on healthcare over the course of her lifetime. A 65-year-old man can expect to spend about $297,000, according to Milliman's 2026 Retiree Health Cost Index.

Those figures assume the person has original Medicare, Medicare Part D for prescription coverage, and a Medigap Plan G supplement plan. However, these figures do not include long-term care, which can easily add up to six figures. Unfortunately, most retirement plans can't cover a bill of that size.

"Max funding an HSA can help reduce these costs and thus withdrawals from an IRA or other investment accounts," says Laura of Retirement Coaches Association. "Additionally, allocating funds to a Roth IRA for this purpose, since they come out tax-free in retirement, can also play a role in reducing taxes on distributions. It's also worth noting that some large companies do offer health care to part-time employees."

Also, by taking care of your health, getting routine tests and screenings (many covered by Medicare), getting recommended immunizations, and practicing healthy habits, like not smoking, you can enjoy a higher quality of life and stretch your retirement savings even further.

6. A cash buffer helps during tough times

Life happens. Whether it's unexpected car or home repairs, a health issue, or rising inflation, things don't always go as planned. That's why retirees with more modest lifestyles usually keep a three- to six-month supply of cash in an emergency fund to cover living expenses — just in case.

Having a little extra cash on hand helps create a financial buffer that can keep you afloat without relying on credit cards or high-interest loans.

According to NerdWallet's April 2026 savings report, nearly half (45%) of Americans surveyed said they are actively saving money in a bank account for emergencies. Since an emergency can happen at any time, it's probably best to put your emergency fund in a high-interest savings account for easy access rather than a long-term investment fund.

Why a "modest" retirement fund can be enough

In the end, a "modest" retirement fund can be more than enough to be happy. By focusing on smart habits around spending, investing, saving and everyday life, you may discover you already have more than enough to live comfortably.

The real secret isn't a massive nest egg. Instead, it's having the freedom, flexibility and peace of mind to enjoy all of the years ahead. After all, your retirement shouldn't be only measured in dollars, but by how well your money lets you live the life you actually want.

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The letter arrives unexpectedly in the mail, tucked among bills and junk mail, and many people are likely intrigued.

A former employer has a proposition. The letter's recipient is vested in a pension at their former workplace, and that pension is still on track to be paid every month for life once they reach a certain age.

The employer has an offer: The person can take a one-time lump-sum amount now instead of future monthly pension payments. The window for making a decision comes with a deadline, so don't wait too long to decide, the letter says.

For the former employer, this is a chance to reduce some long-term risk and limit how much future pension payments to employees might affect the company's financial performance.

But if you're the one receiving the letter, you might need to puzzle over the math, trying to figure out how the numbers will work best for you.

• Is it wiser to stick with the plan you had — drawing a pension when the time arrives?
• Is the lump sum an opportunity to build an even better retirement?

People still working for an employer that offers a 401(k), a pension or both face similar questions as they gear up for retirement. What are the best options for them, and are there ways they can act before retirement to get the most out of their money?

For example, if their plan allows it, should they roll their 401(k) money into an IRA before they retire, to protect their assets and perhaps have more investment options? If they do, should they also take their pension as a lump sum and use that to replenish the 401(k) account?

Are there other strategies they can put into play?

To reject or not

There are things to mull over here.

One reason to decline a lump sum could be that you expect a long life — much longer than the average — and the pension is guaranteed, regardless of how long you live.

Holding on to that pension promise might feel less risky than taking the lump sum and investing it on your own.

In contrast, a reason for taking the lump sum could be that doing so will give you more control of the money as you explore the options for investing it and how that might fit in with your other investments.

Perhaps you have other retirement savings, and the lump sum would give you an opportunity to leave more of a legacy for your children.

The questions are many, and the answers aren't sitting on a one-size-fits-all shelf waiting for you to put them to use.

This is, without a doubt, a complex decision that requires careful thought.

A case study

All that said, though, in many cases, I find it's best to take the lump sum, seizing control of your future and putting the money to the best use for you.

In my experience, you can use that lump sum to purchase an annuity that will match the monthly pension payment and still have money left to invest in other ways.

Rolling over a current 401(k) into an IRA can also be a wise move in many instances. I've seen that play out in real life, and here is one example: Sometime back, a client still working at the business where she has a pension and a 401(k) came to me to review her options and try to determine the best way forward.

In her case, the numbers were sizable, which made the decision even more consequential. The monthly pension she had earned would pay her $5,855 a month for life or $4,808 monthly if she chose an option that allowed her spouse to continue to receive the pension after her death.

After evaluating the numbers and the possibilities, we came up with a plan.

We decided to roll over her 401(k) money, and when she retires, we will replenish the account we moved with the lump-sum money from her pension.

We could arrange for her to buy an annuity that would pay her the same $4,808 as the spousal option. She'll have the same amount of income that the pension would provide, but with a larger amount of invested assets.

If necessary, seek assistance

If you receive a letter offering a lump-sum option on your pension — or you're nearing retirement and wondering about the proactive steps you could take —review the numbers carefully and see how they line up with your personal situation and goals.

Usually, you get only one chance to make a decision on this, and you want to make the right one for you.

It's understandable if you find the options confusing and overwhelming. Plenty of other people are just as confused.

If you work with a financial professional, bring them into your decision-making process. They can help you review the numbers and decide on a strategy that's best for your situation.

Maybe that's keeping those pension payments in place. Maybe it's using the lump sum to buy an annuity. Maybe it's taking the lump sum and investing it in some other manner.

Ultimately, it's your money and your decision. But with thoughtful consideration, you can arrive at the right choice and feel satisfied that you did all you could to try to give yourself a more secure future.

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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• Is This 1950s Investing Strategy Holding Your 2026 Portfolio Back?

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.

Retiring with a traditional pension is a financial win, putting you among the lucky minority of Americans with such income. But your most important decision is still ahead of you. If your employer asks you to choose between guaranteed monthly checks and a lump-sum cash buyout, opting for the wrong payment type could cost you thousands over your lifetime.

"Everyone's situation is a little different," says Thrivent Financial Advisor Jason Rogoff. "You have to analyze the situation and look at what other assets people have, what other streams of income, their age and health."

When it comes to pension payouts, some rules may impact the decision-making process. For example, with many pensions, payouts end with the spouse, so they can't be passed on to the children. Meanwhile, the majority of private pensions don't account for inflation with a cost-of-living adjustment (COLA). Then there are tax treatments and investment choices to worry about.

Since there are so many moving parts, it's important to put yourself through the paces before selecting a payout. To help you decide, answer these three questions first.

1. Do your guaranteed income sources already cover your monthly bills?

A peaceful retirement is one where you don't have to worry about paying the bills. The rent is covered, there's food in the fridge and the lights are on. Rogoff says retirees get that peace of mind through guaranteed income, and if they don't have enough of that, annutizing a pension may be a way to create it.

"I like to have a guaranteed source of income for my clients over things like housing, utilities, healthcare and food," says Rogoff. "One of the first questions people should ask is, do I have enough guaranteed income, or do I need more? '"

To determine if you have enough guaranteed income, add up all your monthly expenses and subtract them from your guaranteed monthly income before your pension. If you face a shortfall, Rogoff said it may be better to take lifetime monthly payments to ensure your expenses are covered.

There are downsides to getting paid monthly for your lifetime, including:

• Inflation: Most private pension payments are fixed with no inflation protection. (Public plans usually do offer a COLA.)
• Liquidity: You can't pull out more money for a one-time emergency.
• Stability: Payouts depend on the plan's stability and may be reduced. The federal government's Pension Benefit Guaranty Corporation (PBGC) acts as an insurer of private pensions and will step in if a pension fails. All 50 states offer some form of protection for public pensions.
• Heritability: The benefit often ends with the spouse. You typically can't pass it on to your children.
• Tax complications: If your monthly benefit is significant, it may push you into a higher tax bracket over several years, especially if you'll have to take required minimum distributions (RMDs) at 73 or 75.
• Hybrid options: You may not have to make an all-or-nothing decision, as some pensions allow you to divide your benefit into a lump sum and monthly checks.

2. Are you comfortable managing an investment portfolio through market ups and downs?

When you take a lump sum payout from your pension, your employer pays you an amount that is typically calculated by estimating the present value of all your future monthly checks using IRS interest rates and life expectancy tables. You give up a guaranteed monthly income for life and shift all the investment risk onto yourself. But in return, you get complete control over your money and full investment flexibility.

That can be scary for some retirees and exciting for others. Knowing your level of comfort with investing and the markets is essential in making the right decision. After all, if you take the lump sum and select to roll it into an IRA, you will have to decide what to invest in and when to sell. There is also the potential for it to grow more in the markets than if you chose a fixed monthly payout over your lifetime.

"If you have financial sophistication and don't mind dealing with risk, it may be wisest to take the lump sum," said Jeffrey Smith, owner of The Retirement Smith, a financial advisory firm.

Keep in mind that if you take the lump sum and don't roll it into an IRA, it will be treated as ordinary income and subject to taxes, including a 20% withholding by your employer in certain circumstances.

3. Is leaving an inheritance important, and how is your health?

Your health and legacy goals must be considered in lockstep when deciding how to receive your pension payments. After all, your guaranteed monthly pension payments are tied to your life expectancy; for many pensions, the checks stop coming once you pass away.

If protecting your spouse is of utmost importance and there is a significant age gap, a monthly payout with a joint-and-survivor option may be the better choice. It guarantees your spouse continues to get paid after you are gone. Keep in mind that selecting that option typically reduces your monthly benefit.

Note that if a married person wants to take a lump sum or a single-life annuity (cutting out the spouse), the spouse must sign a waiver.

Installment payments may also be the better option if everyone in your family lives well into their 90s, as it guarantees you won't outlive your money. But it also means once you and your spouse are gone, your kids won't see a dime. So if legacy is more important than protecting a spouse, a lump-sum payout that you can invest and leave to your children may be the better option.

No two retirements are the same

Whether to choose a lump-sum payout or guaranteed monthly income over your lifetime will depend on your cash flow, health, legacy and financial sophistication. What makes total sense for one person may seem completely wrong for another.

Before you make a decision that you can't take back, weigh all your options, answer these three questions, and if you are still unsure, seek the help of a trusted adviser. Remember, you are among the lucky ones to still have a pension — make sure you are getting the most out of it for you and your family.

Read More "3 Questions" Stories

Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are:

• Retirement readiness
  • 3 Questions That Determine If You're Actually Ready to Retire Early
  • 3 Questions to Ask Before Unretiring
• Where to retire
  • Moving to Florida or Texas for Retirement? 3 Questions to Ask First.
  • 3 Questions That Reveal If You're Actually Ready to Age in Place
• Retirement savings and spending
  • 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You
  • 3 Questions That Help You Find Your Perfect Social Security Claiming Age
  • Go Ahead and Splurge, But Ask Yourself These 3 Questions First
  • Before You Give Money To Your Kids, Ask Yourself These 3 Questions
  • 3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof

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• Should You Retire Now or Work Five More Years?
• Afraid to Dip Into Your Savings? 8 Guilt-Free Ways to Finally Enjoy Your Retirement
• 9 Upgrades That Transform Your Family Home Into a Retirement Oasis
• 6 Strategic Moves to Keep Growing Your Wealth After You Retire

One of the first questions many people ask after learning they’ll receive an inheritance is: "Will I owe taxes?"

It’s an understandable worry. Taxes can be confusing, especially during an already emotional time when someone has passed away. But there is some good news — receiving an inheritance doesn’t automatically mean you’ll owe taxes to the IRS.

That's because for most people, the inheritance itself isn’t a taxable event. Whether you owe anything depends on what you inherit, where you live, and whether those assets later produce income or are sold.

Still, before you decide what to do next, it helps to understand which tax rules might apply to your situation and when. Here's more to know.

Do you owe taxes on an inheritance?

When you first inherit money or property, your instinct might be to prepare for a heavy tax bill on your next federal income tax return. It's a natural concern, but the IRS actually treats inheritances with a surprising amount of grace.

As a general rule, the federal government doesn't handle inherited assets as taxable income.

Simply receiving cash, a house, a stock portfolio, or other property won't trigger an automatic tax event or change your baseline tax situation for the year. In most cases, you aren't required to report the initial inheritance on your federal return.

Where tax responsibilities tend to enter the picture is not from the gift itself. The inheritance itself is generally a "clean slate," so to speak; what you choose to do with those assets is what determines which tax rules may apply.

Different inherited assets come with different tax rules

If you inherit cash: For most people, inheriting cash doesn’t create a federal income tax bill. That's because, as mentioned, the inheritance itself isn’t taxable. But any income it earns afterward might be.

For example, if you deposit inherited money into a high-yield savings account, any interest you earn is generally taxable. The same applies if you invest the money and later receive dividends or realize capital gains.

If you inherit a house: Inheriting a home generally isn’t a taxable event. If you later sell the property, however, capital gains tax rules may apply.

That’s where the tax picture can start to change.

• Most inherited homes receive a stepped-up basis, which adjusts the property’s value to its fair market value at the time of the owner’s death.
• That can reduce the amount of taxable gain if you later sell the home.

For example, if you inherit a home worth $400,000 and later sell it for about that amount, you may owe little or no capital gains tax. If the home’s value increases after you inherit it, you may owe tax only on the appreciation that occurs after the inheritance.*

*This is a simplified example solely for educational purposes. Consult a trusted financial professional to help determine possible capital gains tax liability if you plan to sell an inherited home.

If you inherit stocks or investments: Stocks, mutual funds, and other investments generally aren’t taxable when you inherit them.

Much like inherited real estate, inherited stocks, mutual funds and other investments generally receive a stepped-up cost basis. If you sell them later, you may owe capital gains tax only on the appreciation that occurs after you inherited the assets.

If you inherit an IRA or retirement account: Inherited retirement accounts follow different tax rules than most other inherited assets.

While inheriting the account itself usually isn’t taxable, withdrawals often are. The rules depend on your relationship to the original account owner, the type of retirement account, and other factors.

• For example, distributions from an inherited traditional IRA are generally taxable, while qualified withdrawals from an inherited Roth IRA are typically tax-free.
• However, even though inherited Roth IRA distributions aren't taxed, most non-spouse beneficiaries are required under the SECURE 2.0 Act to withdraw all funds from the account within 10 years.

Because inherited retirement account rules can be complex, it’s important to understand these distribution timelines before taking money out and to consult a trusted tax advisor who knows your individual circumstances.

Common inherited assets and when taxes may apply

State inheritance taxes

Although there is no federal inheritance tax, a handful of states impose an inheritance tax paid directly by the beneficiary.

(Note: This is separate from a state estate tax, which is paid from the deceased person’s estate before assets are distributed.)

Whether you’ll owe state inheritance tax depends on where the deceased lived or owned property and your relationship to them — spouses and close relatives are often exempt.

If you’re unsure whether your state imposes an inheritance tax, our guide might help, but also consult a trusted tax professional or financial planner since every beneficiary's situation is different.

Keep in mind: Whether you’ll owe an inheritance tax largely depends on the state involved and your relationship to the deceased.

Frequently asked questions about inheritance taxes

Even though most inheritances aren’t subject to federal income tax, there are a few situations that can confuse beneficiaries.

Can you owe taxes years after receiving an inheritance?

Yes. While the inheritance itself usually isn’t taxable, you may owe taxes later if inherited assets earn interest or dividends, appreciate before you sell them, or require taxable withdrawals from a retirement account.

Does every state tax inheritances?

No. Only a handful of states impose an inheritance tax, and many exempt spouses and other close relatives. In most states, beneficiaries don’t owe a state inheritance tax.

Should you talk to a tax professional?

If you inherit a retirement account, real estate, a business, or other high-value assets, a qualified tax professional can help you understand how federal and state tax rules apply to your situation.

You can also find additional guidance in IRS Publication 559, Survivors, Executors, and Administrators, which explains the tax responsibilities of beneficiaries, executors, and estates.

Related

• Inherited an IRA? Key Distribution Rules to Know
• States That Won’t Tax Your Death
• Estate Tax vs Inheritance Tax: Who Actually Pays the Bill?
• Filing a Deceased Person's Final Income Tax Return

You’ve spent 30 or 40 years mastering the art of saving; it's now time to master the art of spending. You built the budget, made the trade-offs and watched your nest egg grow. But now that you’ve reached the finish line, turning off "saving mode" can feel surprisingly unnatural.

If the thought of spending down your hard-earned portfolio causes a pang of anxiety, you aren't alone — in fact, most retirees spend far less than they safely can, shortchanging the very lifestyle they sacrificed to build.

This 10-question quiz is designed to help you identify the subtle psychological traps that keep retirees in perpetual saving mode. Take a few minutes to test your knowledge, unpack the financial mindset holding you back, and learn how to spend with confidence. You earned this life — it’s time to enjoy it.

Follow the links below to learn more about safely spending in retirement without guilt.

More on overcoming the fear of spending:

• The Average Retirement Withdrawal Rate by Age
• Are You a Retirement Millionaire Too Afraid to Spend?
• Master the Art of Spending in Retirement
• The 'Permission to Spend' Rules of Retirement Spending
• Average IRA Balance by Age and Generation
• The 'Die With Zero' Rule of Retirement

Retirement is supposed to be carefree and financially predictable, but that doesn't mean you're exempt from recurring bills. That's particularly true if you own a home. Everything from maintenance to insurance comes at a cost. How you pay those bills — all at once or over time — can have a big impact on your savings and cash flow.

The secret to saving money is timing. Some annual expenses offer discounts if you lock them in early, while others are best kept flexible so you can shop around or keep your money earning interest.

To help you figure it out, here are four everyday bills you should wait to pay to save some serious cash.

4 bills retirees should not prepay

1. Heating oil

For retirees who value predictability, locking in heating oil rates ahead of winter provides peace of mind amid volatile energy markets, but they typically pay extra for that relief.

A fixed-rate plan locks in your price for the entire season, protecting you from cold-weather price spikes. But you won't benefit if market prices drop. A capped-price plan sets a ceiling and lets you pay lower rates if prices fall, but dealers usually charge an upfront protection fee for that option.

The cheapest option, according to nonprofit consumer energy groups and state agencies, is a floating-rate plan. With that, you pay the current market rate and that's it. Over multiple years, those savings can add up.

2. Electricity

Just like heating oil, you can lock in your electricity rate for the year, but doing so can cost you if electricity rates decline.

Plus, you have to be careful of the fine print when signing up for a fixed-rate electricity contract. Some may have early termination fees, monthly recurring charges, and promotional rates that spike once the initial period expires.

3. Auto and homeowners insurance

Who doesn't love the convenience of auto-renewal for auto and homeowners insurance? It's one less thing to worry about, and doesn't loyalty always pay? It turns out it's better to shop around each year to ensure you're getting the best rates.

How much can you actually save? According to a LendingTree survey, drivers reported saving at least $100 per year simply by switching auto insurance providers.

Use the Bankrate tool below to connect with auto insurance providers and compare quotes:

4. Home warranty contracts

Home warranty contracts are supposed to protect you from expensive repairs. For a fixed annual fee, you won't have to worry if the furnace dies, a pipe bursts or the AC is on the fritz. Often, you get high service call fees, strict restrictions on what is covered and exclusions hidden deep in the fine print.

Instead of locking up money in a warranty contract that will require you to pay out of pocket anyway, put it in a high-yield savings account where your cash earns interest until it's needed for a repair.

Keep control of your retirement

Cash is king; it couldn't be truer in retirement, which is why patience pays off when it comes to some everyday expenses.

By shopping around annually and keeping your cash accessible in high-yield savings, you'll ensure your money stays liquid and under your control.

Use the Bankrate tool below to search for today's top high-yield savings account offers:

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Watching your retirement portfolio take a hit is painful, but it offers an unexpected gift: a discount on your future tax bill. Converting to a Roth IRA during a down market lets you pay taxes on depressed share prices now, turning market losses into years of tax-free growth.

Kiplinger's investing experts expect the second half of 2026 to remain strong. At the same time, there are signs that some asset classes or industries (such as AI) may struggle, which could provide an opportunity for savvy investors to convert holdings that see a significant drop.

The benefits of doing a Roth conversion in a down market

Since the amount you pay in taxes on a Roth conversion is based on the dollar amount you convert, a lower account balance means you’ll pay less to the IRS.

"The tax payment on the conversion is going to be smaller since the account value is lower," says Ben Rizzuto, wealth strategist with the Specialist Consulting Group at Janus Henderson Investors.

When moving a specific position, a smaller account balance doesn't mean the number of shares you convert to a Roth will be lower. In a down market, the value of the stock, mutual fund, or exchange-traded fund (ETF) may be depressed — but you'll still be able to convert the same number of shares.

How a Roth conversion in a down market works

Let's say you planned on converting a traditional IRA balance of $100,000. But the asset you own in the retirement account, say, an AI memory chip maker, suffers a 20% drop, reducing your balance to $80,000. The big decline in the stock price means you'll be able to convert all of your shares to a Roth IRA while only recognizing $80,000 in taxable income.

The depressed shares you convert to a Roth will benefit from an eventual market recovery inside the tax-free Roth wrapper. The upside? The future growth of those converted shares benefits from a longer runway to compound without IRS taxation, compared with a traditional IRA, which is taxed as ordinary income in retirement.

The best time to do a Roth conversion is in a year when not one but two financial forces are working in your favor.

The first, as discussed above, is a market pullback (a drop of 5% to 9.99% from a high), a correction (a 10% to 19.99% drop) or a bear market (a decline of 20% or more). Or, even if the market remains strong, you may be able to take advantage of a price drop in an industry or asset class.

The second is when your taxable income is lower than normal. In years when you report less income, you can convert more dollars to a Roth at a lower tax rate.

"That's a double benefit," says Steven Conners, founder and president of Conners Wealth Management. You end up converting fewer dollars and get taxed at lower rates.

How to decide if this Roth conversion strategy makes sense for you

Financial advisers, however, stress that a big market drop isn't the only factor a retirement saver should consider before doing a Roth conversion. Timing a Roth conversion based on market conditions is akin to trying to time a stock's purchase or sale.

The biggest factor by far when deciding whether to do a Roth conversion is the overall tax impact. Saving some money on taxes by doing a conversion during a down market doesn't necessarily mean doing the conversion is a slam dunk, financial pros say. You must look at the bigger tax picture you face in any given tax year.

A Roth conversion makes the most sense if your current income tax rate is lower than it will be in retirement. The idea is to pay a lower tax rate on the conversion now and pay zero taxes on withdrawals in the future when your tax rate is expected to be higher.

So, if you think your tax rate may be lower in retirement than it is now, you may want to hold off on a conversion even if a down market makes it a more attractive option, says Rizzuto.

Another factor to consider is whether converting a larger dollar amount to a Roth in a down market could result in an income increase large enough to bump you up to a higher — and more costly — tax bracket. That's something you want to avoid, especially if the conversion amount puts you at risk of going from the 22% or 24% tax bracket to the 32% bracket.

"You need to think about how much of a traditional IRA you are going to convert, and whether that conversion will bump you up into a higher tax bracket," says Rizzuto.

One way to dodge a higher tax bracket is to convert only a portion of your traditional IRA in a single tax year. Convert just enough dollars to stay below the higher bracket's threshold, then repeat the process over time. "The conversion can be done piecemeal," says Rizzuto

Once you've determined that the tax aspect of the conversion works in your favor, taking advantage of a down market to do the conversion makes an awful lot of sense, adds Conners.

That's especially true if you own a hard-hit tech stock or other company whose business model and future growth outlook remain intact. As explained above, moving a mispriced asset that’s likely to bounce back into a tax-free Roth account is likely to benefit you over the long haul.

"With a Roth, all your withdrawals will be tax-free, so you're better off from a conversion with a starting point when tech stocks are down 15% to 25% from their highs," says Conners. "That's a much safer spot to buy into something (i.e., a Roth) that's going to give you tax-free benefits down the line."

What to watch out for when following this strategy

Avoid Roth conversions that bump you up into a higher tax bracket. "Talk to your accountant and ask, ‘How much of my traditional IRA can I convert without bumping up my tax bracket?'" says Conners.

Make sure you have free cash to pay the tax bill. You don't want to sell assets from your IRA to pay the tax bill on the conversion, as it reduces the number of shares you can convert into a Roth and benefit from tax-free withdrawals. The goal of a Roth conversion is to move as many shares as possible under the tax-free umbrella to benefit from long-term growth. Remember that using IRA funds to pay the tax bill triggers an additional 10% early withdrawal penalty if the account holder is under 59½.

Avoid generating too much income and paying a Medicare penalty. A Roth IRA conversion increases your taxable income for that year, which can raise your premium two years later due to IRMAA (Income-Related Monthly Adjustment Amount) surcharges on Parts B and D if your modified adjusted gross income (MAGI) tops an income threshold ($109,000 for single filers and $218,000 for joint filers). For this calculation, the IRS looks back at income from two years ago. So, 2026 MAGI will impact 2028 Medicare premiums.

The bottom line? A down market doesn't necessarily mean it's always a good time to do a Roth conversion. But if the tax piece works in your favor, a bear market in stocks is a great time to move traditional retirement assets into a Roth account.

Read More on Roth Conversions and Retirement Investing

• IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRA
• How to Turn a $1 Million Nest Egg Into a Lifetime Income Machine
• Understanding Roth Conversions: Quiz
• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You

When we talk about retirement, the conversation usually focuses largely on building a nest egg.

With employers moving away from offering pensions and average life expectancies increasing, saving for retirement has fallen on the employee.

As a result, industry professionals consistently encourage workers to maximize contributions to their IRAs or 401(k)s.

While asset accumulation is important, and fundamental to affording retirement, financial planning doesn't stop once you leave the workforce, because saving for retirement and living in retirement are different and require separate approaches.

New hurdles for retirees

When entering retirement, many retirees face new hurdles when it comes to tax planning, healthcare expenses, account withdrawals and making their savings last. When you're working, retirement planning is often centered around saving.

For example, financial professionals might help you identify your risk tolerance, guide you through long-term investments and many employers offer a retirement plan with a matching program as an incentive to contribute.

If savings fall behind while you're still working, it can be fixed by increasing contributions, delaying retirement or working a side gig, if your schedule allows.

In retirement, circumstances are different. Rather than actively earning income, which can come with raises and bonuses, retirees must rely largely on their savings, which are likely fixed.

This phase of life is also when federal programs, such as Social Security and Medicare, become prevalent, raising questions about when to claim benefits, what Medicare options to pick and how to withdraw money from those retirement accounts without triggering access taxes or becoming penalized.

Rather than focusing solely on growth, retirees must figure out how to turn their savings into a reliable source of income that lasts.

A big mistake

One of the biggest mistakes I see retirees make is assuming the investment strategy that helped them build their nest egg will work the same once it's time to live on it. When you're working, market volatility is easier to recover from because you're actively earning income, and you have the time to recover from downturns.

However, once your portfolio becomes your main source of income, you might need to make withdrawals regardless of where the market stands. For some, this could mean selling investments at a lower value to meet income needs.

Over time, this can strain your savings, potentially depleting your portfolio prematurely.

Generating income from your investments involves much more than taking out money when you need it. Traditional IRAs, Roth IRAs, brokerage accounts, Social Security benefits and pensions, if you have one, are all taxed differently.

Without a coordinated withdrawal strategy, you could unintentionally pay more in taxes or miss opportunities to make savings work more efficiently.

One coordinated strategy

Instead of viewing retirement accounts as separate buckets of money, a retirement income plan allows you to manage withdrawals, taxes and income needs under one coordinated strategy.

Unfortunately, many people wait until they're in retirement to start thinking about their retirement income strategy.

In addition to prioritizing growth, the time leading up to retirement can also be used to start planning for how those assets will be used.

Estimating future income needs, reviewing healthcare costs, coordinating retirement accounts and understanding how they'll work together in retirement will make the transition much easier when that time comes.

Saving for retirement is crucial, but the financial planning doesn't end once your golden years begin. The transition from earning income to living off retirement savings requires a different mindset and a new approach.

Developing a retirement income plan that addresses how income will be generated, how withdrawals will be taxed and how your savings will support future spending needs can help ensure the nest egg you've spent decades building serves you throughout retirement.

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

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: My mother suffers from MS and now needs daily help. I'm starting to look into programs that will pay me to be a caregiver. Am I allowed to keep my regular job or will I be forced to quit? I'm a freelance consultant with flexible hours, but I can't give up that income (or not easily). I assume the pay to be a caregiver isn't great. — Squeezed

Dear Squeezed: As the U.S. population ages, a growing number of Americans are finding themselves thrust into a role they may not be prepared for — caregiving.

AARP reports that one in four U.S. adults is a caregiver, with the majority caring for another adult. Additionally, one in three caregivers is under 50, which means they may be trying to balance providing care for a loved one with maintaining a career during their peak earning years and keeping up with retirement savings goals.

Here, we have a reader who wants to step in and care for her ailing mother. But every hour she spends providing care is an hour she can't earn income through her consulting business.

While there are programs that may pay her to care for her mother, the question is: Will the income be enough to cover her lost wages? Here's what our experts say someone in this situation needs to know.

You probably won't have to quit your job

For people with strict working hours, juggling a full-time job and caregiving may not be possible. For someone with flexible hours who isn't tethered to an office, it may be doable.

Faris Flournoy is the CEO at Flournoy Health Systems, a home care management company. And he says that in this situation, you definitely do not need to rush to quit your consulting job.

"One of the biggest misconceptions about family caregiving is that you have to choose between caring for your mother and keeping your career," he says. "There are programs that may allow you to do both. Some states offer programs that compensate family caregivers while they continue working another job, particularly if they have flexible schedules."

Before reducing your work hours, contact your state's Medicaid office or Area Agency on Aging to determine exactly which caregiver programs are available, how many hours are covered, whether your parent qualifies and whether family caregivers are eligible for payment. Rules differ by state, so don't assume a program available elsewhere is the same where you live.

Don't expect caregiver pay to replace your income

As our reader correctly assumes, the wages associated with caregiver programs do not tend to be overwhelmingly generous. Plus, Flournoy cautions, "Many programs cap the number of paid hours, even if you are providing significantly more care than that."

Flournoy explains that while being paid as a family caregiver can certainly help offset some of the financial burden, it's rarely enough to replace a full-time income. And even with a flexible job, it may be challenging.

"Some caregiver programs require you to provide care during approved hours or meet minimum hour requirements, which can make managing another job more challenging," Flournoy says. "Before making any financial decisions, get clear on exactly what the program expects, how many hours it will cover, and whether those requirements fit with your current work schedule."

Flournoy also emphasizes the importance of looking out for your own financial best interests while trying to help.

"The financial impact of caregiving extends well beyond today’s paycheck," he warns. "Many family caregivers reduce their work hours, pass on promotions, or leave the workforce entirely, which can affect retirement savings, Social Security benefits, and long-term financial security. Those are sacrifices families often do not anticipate until they are already making them."

Evan Farr, Certified Elder Law Attorney and retirement planner, agrees that caregiving can have more long-term financial consequences than expected.

"While the immediate costs include lost income for this calendar year, the true cost includes compounded losses from reduced savings and reduced career longevity due to interrupted employment," he insists.

Medicaid is what usually pays, but there are other solutions too

Medicaid: While getting paid to be a caregiver may be an option, there are requirements to meet. And one of those may be qualifying for Medicaid.

"Most paid family caregiver programs are funded through Medicaid, not Medicare, and each program has its own financial and medical eligibility requirements," Flournoy says.

Depending on the program, some Medicaid caregiver payments may receive favorable federal tax treatment.

Flournoy commonly sees families land in situations where they've saved too much money to qualify for Medicaid but not enough to comfortably pay for ongoing home care.

Flournoy also says that for the most part, Medicare does not have paid caregiver programs in place, nor does it pay for custodial care — the ongoing personal assistance many people need with bathing, dressing, meal preparation, and other daily living activities.

Special cases: "Some Medicare Advantage plans, veterans’ benefits, and long-term care insurance policies may provide additional support, but families should not assume Medicare alone will cover long-term daily caregiving," he says.

To be clear, some Medicare Advantage plans (Part C) cover limited in-home support services or respite benefits, but they generally do not pay family members as ongoing caregivers. They may, however, cover adult daycare.

Veterans' benefits are available only if the care recipient is an eligible veteran (or, in some cases, a qualifying spouse).

Become your parent's employee: Finally, if your mother has sufficient assets to pay you directly, you could consider setting up a personal care agreement. Your compensation must be set at a "reasonable" rate, or what you would typically pay someone else to do caretaking. The national average for non-medical in-home care was $35 per hour in 2025, according to CareScout. If you happen to be a trained nurse, you can charge more, or $90 per hour on average.

However, be aware of the "nanny tax." If your parent hires you as a household employee, payroll tax rules may apply once annual wages exceed the IRS threshold. Check current IRS rules or consult a tax professional.

The devil's in the details when it comes to Medicaid

A big reason not to rush into a caregiving arrangement is that the nuances can be complicated, Farr says. As he explains, it's important to determine whether you can legally perform the authorized care within the authorized time frame and properly keep records of that care.

"Medicaid-paid family caregiving is not merely a family-arranged situation where Medicaid sends you a check. It is a regulated form of caregiving," Farr insists.

"The mother must meet medical requirements and financial requirements to receive Medicaid-funded LTC," Farr continues. "The state must also approve a care plan. The caregiver may be required to register through an agency, fiscal intermediary, or through the consumer-directed model."

Farr says that, in addition, to become a caregiver, you'll typically need a background check and training. You'll also need to see how many hours of care Medicaid actually approves.

"One of the largest misconceptions is that the family decides what hours of care need to be performed and then expects Medicaid to pay for those hours," Farr explains. "This is not how Medicaid-paid family caregiving works."

Rather, Farr says, each state determines what hours are allowed in the approved care plan.

Flournoy says that one challenge of becoming a caregiver is that each state administers these programs differently.

"One of the biggest differences from state to state is how many caregiving hours are eligible for reimbursement. Documentation requirements also vary," Flournoy says.

Some programs, he explains, require detailed time logs and care plans, while others have a more straightforward reporting process. Eligibility rules can also differ, including which family members can be paid.

"In some cases, spouses or legal guardians may not qualify," Flournoy cautions.

Build a robust care plan for your mom — and a financial plan for yourself

While it may be possible to get paid to care for your mom, both Flournoy and Farr recommend looking beyond the caregiver paycheck and instead focusing on a holistic care plan.

"I have seen too many families spend valuable time searching for one program that will cover everything, when the better approach is combining the right services at the right time," Flournoy says. He says that in this situation, a comprehensive plan may include personal care, skilled nursing, therapy services, hospice, and palliative care.

"The sooner families can identify what level of care their loved one needs and which programs can help along the way, the more flexibility they will have to build a care plan that supports both their loved one and their own financial stability," Flournoy says.

Farr, meanwhile, recommends consulting with an experienced elder law attorney to ensure that your mother maintains eligibility for Medicaid benefits and advise on the legal side of things.

He also says it's important to protect your family's financial well-being in addition to your own.

To that end, you may want to sit down with a financial planner to discuss how your caregiving role may affect your long-term financial goals. Even if you're able to continue working as a consultant, juggling both roles may force you to forgo income that impacts your retirement savings and future plans.

It's noble to want to step in and help your mother. But it's important not to sacrifice your financial security in the process.

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.

More Wealth Wise Retirement Advice

• He's 49 and 'Burned Out.' Can He Afford to Quit a $200K Job?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

Read More on Caregiving

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• How to Hire a Caregiver: Tips for Finding the Right Fit
• How to Create a Retirement Income Plan to Cover Caregiver Costs

The past few years gave many investors exactly what they hoped for — and also set them up for some major risks.

If you bought the right stocks and held them through the volatility of the past few years, your positions have grown substantially. The problem is that "substantial" and "safe" are not the same thing.

We talk to a lot of clients who have watched a single holding climb to 20, 30 or even 40% of their net worth. Sometimes it's a tech stock they've owned for a decade, or a company stock that has accumulated through a career of compensation packages. Either way, they're sitting on significant gains.

Many investors recognize the risks of holding too much in a single stock — they just don't act.

Investors who struggle in retirement are often the ones who held for so long that the decision was eventually made for them, whether by a market correction, an estate situation or the realization that the tax bill they were trying to avoid had grown far larger than if they'd started earlier.

The position that built your wealth doesn't have to be the one that defines your retirement. Getting there is mostly a matter of being willing to ask the question.

The attachment problem

When a stock has been good to you for a long time, it starts to feel like a relationship. Clients who've held Nvidia (NVDA) or Apple (APPL) or Microsoft (MSFT) through multiple cycles have watched those stocks get them through a lot. The idea of selling feels like betrayal. It isn't rational, but human nature rarely is.

That attachment compounds over time. The longer a position has outperformed, the more convinced investors become that it will keep outperforming. We don't want the discomfort of being wrong after so many years of being right.

Consider this: If you didn't already own this stock, would you choose to put 35% of your retirement savings into it today? For most people, the honest answer is no.

At a certain point, the conversation ought to shift from maximizing returns to protecting what you've already built. Unlike institutions, individual investors don't have the benefit of perpetuity — there's a finite window to use and enjoy wealth.

The tax trap

Many advisers recommend reducing concentrated positions. The problem is, most people know that intellectually, but as soon as advisers bring it up, all the client hears is "taxes." They're not entirely wrong to do so.

Investors often let the tax tail wag the dog — prioritizing the avoidance of a tax bill over making decisions that better align with their long-term goals.

A position worth $1 million with a $100,000 cost basis carries $900,000 in embedded gains. In higher-tax states, the combined federal and state rate could reach 37.1%, meaning selling could result in a tax bill of more than $330,000.

So investors hold. They tell themselves the position is still performing. They say they'll deal with it later. But deferring a decision is still a decision, just not a conscious one.

Eventually, "later" becomes "now." The closer a client is to retirement, the more that tax liability weighs on their financial decisions. Spending decisions, income planning and even how much they let themselves enjoy retirement all get filtered through the same question: What will it cost me in taxes?

People end up taking the minimum required by their RMDs and missing the years when they actually have the energy and desire to use their wealth. The government's distribution schedule isn't designed around your travel plans.

Building a way out

The good news is that selling everything at once is rarely the right answer anyway. There are structured approaches that can gradually reduce concentration, spread tax consequences over time and preserve flexibility.

The most straightforward is staged selling across multiple tax years, which allows an investor to recognize gains in manageable increments rather than all at once.

Paired with detailed cash flow modeling in retirement, this approach can actually free people up to spend more by making the tax exposure visible and predictable.

For investors who want to build a more systematic tax strategy, they can offset their gains through tax-loss harvesting.

Direct indexing strategies have also evolved considerably. The newer long/short variation is particularly relevant for people dealing with concentrated positions.

These methods are designed to generate losses over time, which may help offset gains as a concentrated position is gradually reduced. The goal isn't to predict market direction, but to create flexibility and improve after-tax outcomes.

Another option worth serious consideration, especially in the current interest rate environment, is the charitable remainder trust.

The core appeal is simple: An investor contributes appreciated stock to the trust, and the trust sells the stock tax-free and reinvests the full proceeds.

The investor receives an income stream from the trust over their lifetime, and the tax liability on the original gain is spread across those payments rather than being due all at once.

With current interest rates, distribution rates from these trusts may exceed 10%, and the deduction generated can be paired strategically with Roth conversions in the years before RMDs begin.

None of these strategies requires perfection or a full exit. What they do require is a willingness to start. A conversation with your financial adviser is a meaningful way to get the ball rolling.

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

For decades, you've saved in tax-deferred retirement accounts, watching your balance compound untaxed. Then you turn 73, and the IRS comes calling.

Required minimum distributions (RMDs) force you to begin withdrawing and paying taxes on those savings — whether you need the money or not.

What many retirees don't realize until it's too late is that RMDs don't just create a tax bill. They trigger a cascade of consequences that can raise Medicare premiums, subject Social Security to taxation, push you into higher brackets and affect your estate planning.

Understanding these traps before your first RMD can save you thousands over your retirement.

1. The Medicare premium surcharge trap

One of the most common surprises hits retirees in their monthly Medicare bills. Part B and Part D premiums are income-based, with higher earners paying more through income-related monthly adjustment amounts (IRMAAs).

The trap: IRMAA is based on your modified adjusted gross income (MAGI) from two years prior, so a large RMD in 2025 raises your premiums in 2027.

For 2026, surcharges begin at $218,000 for joint filers. At the highest tier, Part B premiums reach $689.90 per month per person, versus the standard $202.90.

A $1 million account generates an RMD of roughly $37,736 at age 73. If that pushes you just over an IRMAA threshold, you could pay an extra $2,000 to $5,000 a year in premiums — money that never shows up on your tax return but flows directly from your RMD.

2. The Social Security taxation trap

Up to 85% of your Social Security benefits can become taxable depending on your combined income (adjusted gross income, tax-exempt interest and half of your benefits). The thresholds are surprisingly low: $32,000 for joint filers and $25,000 for single filers.

Large RMDs push many retirees over these thresholds, turning tax-free Social Security income into taxable income. Consider a couple with $40,000 in Social Security and $30,000 in pension income.

Without RMDs, they might owe minimal tax, but add a $50,000 RMD and suddenly $34,000 of their Social Security becomes taxable (85% of $40,000), sharply raising their bill.

The math gets worse because the effect is marginal. In the phase-in range, every additional dollar of income makes 85 cents of Social Security taxable.

3. The tax bracket cascade

RMDs don't just add to your taxable income — they can push you into higher tax brackets, where each additional dollar is taxed at a higher rate. The 2026 federal brackets create several danger zones where modest RMDs trigger significant tax increases.

For married couples filing jointly, the jump from the 12% to 22% bracket occurs at $100,800 of taxable income. The next jump to 24% happens at $211,400. These thresholds are inflation-adjusted annually, but RMD amounts grow faster as you age and your life expectancy decreases on the IRS tables.

The hidden trap: Many retirees assume they'll be in a lower bracket in retirement. But combine RMDs with Social Security, pensions and perhaps part-time or investment income, and your marginal rate can exceed what it was in your working years.

4. The net investment income tax trap

Once your MAGI exceeds $250,000 (joint) or $200,000 (single), you face the 3.8% net investment income tax (NIIT) on interest, dividends and capital gains.

The indirect trap: RMDs don't count as net investment income themselves, but they raise your MAGI. If that pushes you over the NIIT threshold, your investment income becomes subject to the extra 3.8% tax.

For retirees with substantial taxable accounts, this can add thousands to the annual bill.

5. The charitable deduction trap

Many retirees donate to charity and assume they can deduct it. But the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction to $31,500 for joint filers in 2025, making itemizing unnecessary for most households.

The trap: if you take the standard deduction, your charitable contributions provide zero tax benefit, while your RMD increases your taxable income. The solution is a qualified charitable distribution (QCD), but many retirees don't learn about it until after they've already taken their RMD and made separate gifts, missing the chance to lower their taxable income.

QCDs let retirees 70½ and older transfer up to $111,000 annually, directly from an IRA to charity. The distribution counts toward your RMD but doesn't appear in taxable income, effectively making your giving tax-deductible even if you take the standard deduction.

6. The state tax trap

While the federal consequences of RMDs are widely discussed, state treatment varies dramatically. Some states fully exempt retirement distributions, others tax them at ordinary income rates, and a few have special provisions.

In high-tax states, RMDs can trigger substantial bills. California's top rate is 12.3% (plus a 1% surcharge over $1 million), and New York's reaches 10.9%. A $100,000 RMD could generate $10,000 or more in state taxes alone.

The trap: Retirees who move to low- or no-income-tax states, such as Florida, Texas and Nevada, can avoid this. Those who delay the move may pay substantial state taxes on RMDs for years.

7. The widow's penalty

When one spouse dies, the survivor faces a particularly painful RMD trap. Joint filers enjoy wider brackets and higher standard deductions than single filers. After the year of death, the survivor must file as single, with brackets roughly half the width of joint ones.

Yet the RMD continues at nearly the same level, based on the account balance and the survivor's age, not filing status. This combination often pushes widows and widowers into significantly higher brackets, a phenomenon planners call the "widow's penalty."

How to minimize RMD tax traps

While you can't avoid RMDs entirely once you reach the required age, several strategies can reduce their tax impact.

Roth conversions before RMDs begin. Converting traditional IRA funds to Roth IRAs in your 60s and early 70s lets you control the timing and amount of taxable income. Roth IRAs have no RMDs during the owner's lifetime, and qualified withdrawals are tax-free.

Strategic timing of other income. Delay Social Security or spread capital gains across multiple years to create lower-income years for Roth conversions or to minimize the impact of early RMDs.

Qualified charitable distributions. Use QCDs to satisfy RMD requirements while reducing taxable income if you're charitably inclined.

Asset location planning. Keep tax-efficient investments (index funds, municipal bonds) in taxable accounts and high-income holdings (REITs, bonds) in Roth accounts where possible.

The key is planning ahead. By the time you face your first RMD, many of the most effective strategies are off the table. Working with a financial adviser in your 60s to model scenarios can help you avoid these hidden traps before they cost you.

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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 nearly three decades, financial planning experts relied on a 30-year benchmark: retire at 65, and your money will last to age 95. However, medical advancements, earlier career exits, and active longevity have shifted the baseline.

According to Social Security Administration (SSA) data, a 65-year-old married couple has about a 50% chance that at least one partner will live past 90, and a 20% chance of reaching 95. So, preparing for a 40-year retirement is becoming the new normal for many.

Yet while most investors recognize that living longer requires a larger nest egg, few might account for how a four-decade timeline reshapes the tax landscape. Stretching a retirement portfolio across that span exposes wealth to escalating forced withdrawals, Medicare surcharges, and bracket jumps that standard 30-year models might not capture.

Here are the primary financial and tax risks of a potential 40-year retirement — and how you might adapt your strategy accordingly.

Financial Risks

1. The compounding math of inflation

Across a 30-year period, inflation is already a hassle to deal with. But over 40 years, it can significantly degrade your purchasing power.

A quick way to visualize this decay is the "Rule of 72." This rule states that, at a modest 3% annual inflation rate, your buying power is cut in half roughly every 24 years. By year 40, a single dollar retains barely 30% of its original value, as shown in the table below.

So, a lifestyle that costs $100,000 at age 60 could require over $326,000 annually by age 100 to maintain the same standard of living, assuming a flat inflation rate (though, of course, economic periods fluctuate — more on that below).

2. Exposure to more market downturns

Historically, the S&P 500 Index enters a bear market (a decline of 20% or more) roughly once every 4 to 5 years. While market cycles are unpredictable, these historical patterns suggest that over a typical retirement:

• A 30-year plan will navigate between 6 and 7 bear markets.
• A 40-year plan must survive 8 to 10 major downturns.

Naturally, when these downturns occur matters just as much as how many you face.

Research on sequence-of-returns risk shows that a severe crash in the first three years of retirement is far more damaging to a portfolio’s longevity than one occurring two decades later.

Extending your retirement to 40 years compounds this vulnerability in two ways. 1) It doubles your chances of starting retirement during a market trough. 2) Even if you survive an early crash, adding a fourth decade increases the odds of a second prolonged downturn later in life — when years of withdrawals have already left your portfolio with less capital to recover.

3. A multiple-decade healthcare horizon

In a typical 30-year plan, healthcare and long-term care expenses are frequently modeled as a late-stage spike occurring in the final three to five years of life.

But in a 40-year plan, medical expenses can become a multi-decade expense.

Fidelity recently reported in its annual Retiree Health Care Cost Estimate that a single 65-year-old retiring today can expect to spend an average of $185,500 (or roughly $371,000 for a couple) out of pocket on healthcare throughout retirement (and that assumes standard Medicare coverage without long-term care needs).

Comprehensive long-term care or extended medical needs over 40 years can push total healthcare expenditures well beyond $600,000 for a couple, far outpacing general consumer price index (CPI) inflation rates.

Managing these financial risks over 40 years requires careful portfolio drawdowns. But withdrawing more capital to keep up with inflation and healthcare introduces a secondary threat: triggering a domino effect of late-life tax penalties.

Tax Risks

1. The RMD expansion spike

When you save money in a traditional IRA or 401(k), the government lets you defer paying income taxes on it right away. But they won't wait forever.

Under current law (SECURE 2.0), starting between ages 73 and 75, the government enforces a rule called a required minimum distribution (RMD). This rule requires you to withdraw a set amount each year so they can tax it.

The catch? The older you get, the bigger the percentage you are forced to take out.

The IRS divides your account balance by a life expectancy divisor that shrinks every year you live. Because you divide by a smaller number, the required withdrawal percentage spikes as you age:

• Age 75: Divisor 24.6 (~4.07% of balance mandatory withdrawal)
• Age 85: Divisor 16.0 (~6.25% of balance mandatory withdrawal)
• Age 95: Divisor 8.9 (~11.24% of balance mandatory withdrawal)

If tax-deferred accounts compound undisturbed for 15 to 20 years before RMDs begin, a $1.5 million balance at age 60 could easily grow to over $3 million by age 80.

A forced 6.25% withdrawal on $3 million means $187,500 in mandatory taxable income in a single year. This extra income can push you into higher tax brackets and exceed your actual lifestyle cash-flow needs.

2. The survivor or 'widow's tax' penalty

When one spouse passes away during a multi-decade retirement, the surviving spouse often inherits the combined balance of tax-deferred accounts. However, their tax filing status changes from married filing jointly to single the next year after their spouse passed away.

Single federal tax brackets are approximately half as wide as joint brackets for the same rate tiers. The result? Higher taxes on the surviving spouse, also known as the "widow's tax" penalty.

• For example, the threshold to enter the 24% or 32% single federal tax bracket is roughly half the dollar amount allowed for joint filers.
• The impact is that the surviving spouse receives nearly the same mandatory RMD income stream from inherited accounts, but pays higher marginal tax rates at much lower income levels. Over a 40-year horizon, this survivor penalty can erode wealth when late-life health costs peak.

For more information, check out Kiplinger's report, Avoiding the Widows' Penalty Tax Trap After a Spouse Passes.

3. Social Security 'tax torpedo' and IRMAA surcharges

During a standard 30-year retirement, tax traps are often viewed as short-term hurdles in late life. With a 40-year projection, however, decades of tax-deferred growth force larger required distributions, which can subject your wealth to multi-decade tax penalties:

Social Security tax torpedo. The IRS determines Social Security benefit taxation using a figure called "provisional income."

• This is basically your adjusted gross income (AGI) plus tax-exempt interest and 50% of your Social Security benefits.
• By increasing provisional income with, say, higher RMDs, up to 85% of your Social Security benefits may become subject to federal income tax.
• For instance, taking just $1,000 extra from an IRA can expose up to $850 of Social Security benefits to taxation, effectively pushing your marginal tax rate above 40%.

IRMAA Medicare surcharges. Realized capital gains or large IRA withdrawals can also cross Medicare's income-related monthly adjustment amount (IRMAA) thresholds.

• In 2026, the first IRMAA threshold begins at $109,000 for single filers and $218,000 for joint filers. (Because Medicare uses a two-year tax lookback, your 2026 premiums are actually determined by your modified adjusted gross income (MAGI) from your 2024 tax return.)
• Because IRMAA uses strict "cliff" thresholds rather than marginal tiers, crossing these thresholds by as little as $1 can cost you thousands in retirement through full monthly premium surcharges on Part B and Part D for both spouses.

Absorbing high-tier IRMAA surcharges ($6,900 to $13,800+ annually for a couple) over 15 to 20+ years, rather than just a few final years, can dramatically accelerate portfolio depletion in your 80s and 90s.

Related: 7 Ways to Plan Now to Save on Medicare IRMAA Surcharges Later.

Update Your Tax Plan

Although minimizing your taxes on a four-decade retirement plan isn't everything, avoiding taxes can help you control your tax brackets across different life phases.

Below are a few strategies that may help protect a 40-year portfolio (though this list is certainly not exhaustive; be sure to consult a qualified tax professional regarding your specific situation).

1. Maximize the 'gap years' with strategic Roth conversions

The period between your career exit and the start of Social Security and forced RMDs (typically ages 60 to 73 or 75) can be used as a valuable planning window. During these relatively "low" income periods, your marginal tax rate might be lower than when you were working.

Instead of letting this low-tax window go to waste, you can try a multi-year Roth conversion.

How it works: Suppose a retired couple (both born in 1960 or 1961) pays $80,000 in annual living expenses from savings, which generates $2,200 in high-yield taxable interest income.

To capitalize on this temporary "tax valley," they convert $100,000 from a traditional IRA to a Roth IRA in 2026:

• Gross income: $102,200 ($100,000 conversion + $2,200 interest)
• Deductions: -$35,500 (2026 standard deduction for joint filers 65+)
• Net taxable income: $66,700

This taxable income figure of $66,700 falls squarely into the lowest federal tax tiers — the 10% and 12% brackets (which max out at $100,800 for joint filers in 2026).

Paying this relatively low tax rate today permanently shifts those funds into tax-free Roth status.

By the time RMDs kick in at age 75, the couple’s traditional IRA balance is substantially smaller, suppressing forced distributions, mitigating the Social Security tax trap, and shielding them from higher tax brackets in their 80s and 90s.

Related: 6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't).

2. Treat your HSA as an extended-life medical account

Health savings accounts (HSAs) offer an unmatched triple-tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are 100% tax-free.

In 2026, individuals can contribute up to $4,400 (or $8,750 for family coverage), plus a $1,000 catch-up contribution for those age 55 and older. (Provided they are not yet enrolled in Medicare, which stops all active HSA contributions).

Furthermore, expanded 2026 eligibility rules now include certain catastrophic marketplace plans and direct primary care (DPC) arrangements alongside traditional high-deductible health plans (HDHPs).

How it works: Instead of spending HSA funds as medical bills arise during your working years, pay those bills out of pocket, digitally scan and back up the receipts, and leave the HSA invested in low-cost index funds. Over 20 to 30 years, an HSA balance can grow into a multi-hundred-thousand-dollar tax-free health fund.

• Then, when late-life healthcare costs inevitably rise in your 80s or 90s, you can draw from the HSA completely tax-free to cover doctor bills and long-term care.
• This eliminates the need for extra traditional IRA distributions, keeping your taxable income low and protecting your core retirement portfolio.

3. Establish a three-bucket asset location model

A 40-year portfolio may need more spending flexibility than a 30-year window. To help navigate market cycles over four decades, structure your wealth across three distinct tax environments:

How it works: Having balanced amounts across all three buckets allows you to "blend" annual withdrawals. For example, if you need an extra $10,000 in a given year for a home improvement or medical event, withdrawing that money from a Roth account or using unrealized cash/principal from a taxable brokerage account may keep your taxable income from crossing an IRMAA cliff or perhaps triggering higher Social Security income taxes.

A quick warning on taxable accounts: Liquidating appreciated stock in a taxable brokerage account to generate cash triggers realized capital gains tax. These gains increase your modified adjusted gross income (MAGI), which can inadvertently trigger an IRMAA surcharge.

Furthermore, high earners should watch out for the 3.8% net investment income tax (NIIT), which sits on top of capital gains tax rates and can push your total capital gains tax rate up to 23.8%.

The bottom line

Living to 95 or 100 should be celebrated without fear of financial liability. But stretched over four decades, tax drag becomes a compounding weight on your portfolio if you rely on an outdated 30-year model.

Thus, achieving a 40-year retirement isn't just about accumulating a larger total sum — it's about controlling when, where, and how you pay the IRS over the next forty years.

By converting pre-tax assets early, building multi-bucket flexibility, and leveraging tax-free accounts like Roths and HSAs, you might help ensure your wealth lasts as long as you do.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

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There's a conversation that comes up in the mortgage business more than you'd think.

Consider a retired couple, financially comfortable, with no substantial debt, a home they own outright and brokerage and retirement accounts that have been accumulating wealth for 30 years.

They want to buy a place in Florida, move closer to grandchildren or downsize and free up some equity. They apply to get preapproved to buy a home with financing — and get denied by the lender.

The issue isn't their credit score, nor is it their ability to afford the payments. It's their income. It doesn't meet the threshold the lender is looking for.

That experience is more common than most people realize, and it points to something worth understanding before you find yourself in the same position.

Traditional mortgage guidelines weren't built for most retirees

Mortgage qualification in the United States runs on a single central question: How much verifiable income comes in every month?

That question made sense when the dominant borrower was a salaried employee in their 30s or 40s, with pay stubs, W-2s and a tidy debt-to-income (DTI) ratio. The whole underwriting framework, from DTI calculation to income documentation requirements to approval logic, was calibrated around that person.

Retirement changes the picture entirely. Social Security counts. Pension income counts. Required minimum distributions (RMDs) from an IRA count, provided they've already started, count.

But a brokerage account with $900,000 in it? That's negligible. A paid-off home worth $700,000? That can't show up as income.

In conventional underwriting, home value doesn't service a mortgage.

According to research from the Center for Retirement Research at Boston College, rejection rates rise consistently with age. Borrowers ages 60 to 69 are 1.54% more likely to be denied than younger applicants. Past 70, that gap reaches 2.7%.

Wealth is not the problem. The mismatch between where that wealth lives and what lenders are looking for is.

Asset depletion as a workaround

A methodology called "asset depletion" — you might also hear it called "asset-based qualification" or "asset dissipation" — exists specifically to bridge that gap. It's been around for a while, and most lenders are aware of it.

The issue is that not all offer it, and among those that do, the version available through conventional channels often doesn't produce enough qualifying income to matter. That distinction is worth understanding before you start shopping.

Here's the basic idea. A lender totals your eligible liquid assets (checking, savings, taxable brokerage accounts and retirement accounts after a standard discount for taxes and market risk) and runs a calculation.

Under conventional mortgage standards, the total gets divided across the remaining loan term to produce a synthetic monthly income figure. That number goes into the DTI calculation alongside whatever documented income you're already receiving. If the math works, you qualify.

To put some numbers to it: Say a retiree has $2 million in a brokerage account and wants to buy a home in Boca Raton, Florida. Under conventional asset depletion guidelines, that $2 million gets discounted roughly 30%, then divided across 360 months, producing about $3,900 a month in qualifying monthly income.

Combined with Social Security, that might not be enough to qualify for a home at the price point they're looking at in that market.

The same $2 million run through a non-QM, or non-qualified mortgage, framework, where lenders can divide by as little as 60 months rather than 360, produces closer to $23,000 a month in qualifying income.

That's a different conversation entirely. Instead of being ineligible to purchase a home, the buyer can easily qualify to buy a home in excess of $1 million. It's a huge part of why lender selection matters. While the assets didn't change, the calculation changes the qualification.

What counts as eligible is key. Liquid, accessible accounts generally do. A paid-off home doesn't since equity isn't income until you tap it.

Business assets, illiquid investments, and anything pledged as collateral typically get excluded. The discount applied to retirement accounts varies by lender, with most taking somewhere from 30% to 40% off the top to account for the tax liability and withdrawal timing.

What to do before you apply

Most big banks and conventional lenders don't offer asset-based qualification, or they offer a narrow version of it that doesn't serve most retiree profiles well.

The Fannie Mae and Freddie Mac framework for asset depletion divides eligible assets over 360 months, regardless of the actual loan term.

For most retirees, the monthly income figure that process produces is too compressed to move the needle on a purchase loan. If you're working with a lender whose only option is conforming underwriting, you might be hearing "no" when a different lender would have said "yes."

Portfolio lenders, meaning institutions that hold loans on their own books rather than selling them into the secondary market, can offer asset-based qualification, but they tend to carry higher rates than lenders operating in the non-QM wholesale space.

Non-QM lenders set their own underwriting guidelines rather than following Fannie or Freddie's framework, and because they distribute through wholesale channels, the pricing is generally more competitive.

Non-QM is not a synonym for high-risk. For a retiree with substantial assets and clean credit, it's often the channel that produces the best combination of qualification flexibility and rate.

The catch is that most consumers don't have direct access to these lenders, and the ones they can access typically have higher rates.

Working with a mortgage broker rather than going directly to a bank or portfolio lender matters here more than in most borrowing situations because you get more access to lenders, and more options often mean lower rates as lenders compete for your business.

Brokers have wholesale relationships across multiple investors and underwriting frameworks and can match your financial profile to the product built for it.

On the documentation side: Be ready. Lenders using asset depletion typically want two to three months of statements across every eligible account, proof of ownership and, sometimes, a written explanation for any large deposits or transfers in the recent statement period.

If your accounts are spread across four or five institutions, start gathering statements early.

One thing worth saying plainly: Drawing down the assets you use to qualify affects the financial picture those assets were meant to support long term. This decision sits at the intersection of mortgage strategy and retirement income planning.

A conversation with a financial adviser before you apply will help you think through whether the structure makes sense for your situation.

Who you talk to determines your ability to buy a home

Getting this right has less to do with how much you have than with understanding, before you walk into anyone's office, that the conventional mortgage path wasn't built for your financial profile.

The borrowers who find their way through it are usually the ones who went looking for lenders equipped to work with them.

Remember, a denial is not a verdict.

Related Content

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• A Different Way to Approach Your Mortgage in Retirement
• Should You Pay Off Your Mortgage Before You Retire? A Financial Planner Gets Real
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• High Mortgage Rates Are Holding My Retirement Hostage: Can I Still Downsize and Retire?

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

When Jude and Matt Bell got engaged, they faced their first major argument: minimalist or floral dinnerware? As a money-management writer, Matt notes that these small decisions often reveal deeper differences you bring into a marriage.

After decades of disagreements, you’d think couples would have mastered the art of compromise by retirement age. Alas, that doesn’t seem to be the case for many. Studies show that more than one third of divorces today occur between people 50 and older — what’s often called "gray divorce."

The good news, financial experts say, is that the same money decisions that strain a marriage can also strengthen it. While money may not buy a happy marriage in retirement, these financial moves can help keep partners aligned.

1. Build a plan that you both believe in

What works best to keep couples together might not be found in a therapist’s office or in the bedroom. Rather, it sits on a printed page or screen.

"One of the biggest things that keeps couples together in retirement is having a financial plan they both understand and believe in," says Nathan Sebesta, CFP® and founder of Access Wealth Strategies.

The confidence a plan provides is measurable. According to Fidelity’s 2026 State of Retirement Planning study, Americans with a financial plan in place are more than twice as likely as their peers (83% vs 38%) to feel confident about their retirement prospects.

Bell agrees a plan is invaluable, especially when spouses disagree about how quickly to spend down their savings, and says it’s often worth working with an adviser who can bring objectivity.

"The ideal is to create a plan where your agreed-upon lifestyle needs are met for the rest of your lives," he says.

2. Go on a "money date"

A plan only works if couples keep talking. And talking about money, specifically, is something many couples avoid. In fact, the Fidelity Investments Couples & Money study found that 49% of couples steer clear of financial conversations to head off arguments.

Bell’s fix is what he calls "money dates." "Get out of the house and away from all the distractions. And then talk about money," he says. "What’s working? What isn’t working? What would you like to pursue and what will it take financially to get there? Establishing the habit of talking about money will be so good for your marriage. It’ll keep you aligned and working as a team."

3. Talk about what money means, not just what it costs

As with the artistic design of dinnerware, what couples argue about is often deeper than the dollars.

"One of the biggest mistakes couples make in retirement is assuming they’re arguing about money when they’re actually arguing about what money represents," says Laura Mattia, author, CFP® and financial adviser at Wealth Enhancement. "One spouse’s desire to spend may reflect a desire for experiences, freedom or making the most of healthy years ahead. The other spouse’s reluctance to spend is often rooted in a need for security and fear of becoming financially vulnerable later in life."

The healthiest couples, Mattia says, don’t start by asking, "Can we afford it?" They start by asking, "What are we each trying to accomplish?" As she puts it: "The breakthrough happens when couples stop debating the money and start discussing the values and fears underneath it."

4. Commit to full transparency

A potential relationship killer at any stage of marriage is financial infidelity. And many people take it seriously: a Bankrate survey found 43% of U.S. adults believe keeping financial secrets is at least as bad as physical cheating. Yet nearly half of couples admit they don’t know everything about their partner’s finances.

Sebesta advocates for complete transparency, though he points out that the financial accounts themselves matter less than the openness. "You don’t have to combine every account, but both spouses should know where everything is, how the household finances work and what happens if something happens to the other," he says.

5. Build in financial margin and agree on how fast to spend it down

"How fast do we spend this down?" can become a major marital question in retirement. One spouse wants to enjoy the money now; the other fears outliving it. Even couples who've saved diligently can find themselves at odds over how to enjoy it. A Western & Southern Financial Group survey found just 43% of married Americans completely agreed on what retirement would look like.

Bell’s antidote is margin, a gap between income and essential expenses. Living primarily on one income early in his marriage created that cushion, and the same principle carries into retirement. "For anyone planning for retirement, build margin into your plan," he says. "That means creating a plan that doesn’t require everything to go perfectly. That’ll keep stress low and flexibility high."

But he cautions against being so conservative that couples miss out. "You don’t want to run out of money, but you also don’t want to die with so much in reserve that you missed out on some things that would have mattered to you," he says. One approach Bell favors is "giving while you're living," such as helping adult children with a down payment on a home so you get to enjoy watching the impact.

Mattia frames the balancing act as a shift in perspective. "Common ground emerges when couples stop treating retirement as a purely financial transition and start treating it as a life transition," she says.

6. Invest in purpose and in the marriage itself

Retirement can strip away a major source of identity and structure: work. One peer-reviewed study found that fully retired people reported a significantly lower sense of purpose than those still working or partially retired.

Bell calls lost purpose "a huge factor" in late-life struggles. His advice is to decide, before retiring, how you’ll continue to use your skills and passions. "Just because you’re no longer drawing a paycheck doesn’t mean you're not needed," he says.

The same intentionality applies to the marriage itself. "If you want to be good at marriage, do the same," he says. "Go on a marriage retreat. Read books about marriage together." He points to research suggesting that couples can get the most joy per dollar from spending on shared experiences.

Catherine Valega, CFP® and adviser at Green Bee Advisory, suggests couples map out those experiences deliberately. Do the ambitious travel while you have the energy, she advises, and plan and budget for how you’ll want to spend time with family as you age. "Think of retirement as a starting line, not an end line," she says. "You could be spending 40 years in this phase of life."

In the end, a lasting marriage is built on navigating decisions large and small, right down to the pattern on the plates. Whose turn it is to wash those plates, on the other hand, is one problem money will never solve.

Read More

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I grew up in a time when it felt possible to figure things out on your own. It was before smartphones and online tutorials. If something broke, we learned how to fix it. If we wanted to learn something, we found a way.

That mindset is still alive and well today, although we have more access to information than any generation before us. Whether we're repairing a vehicle, researching a medical diagnosis or learning a new skill, the answer is often just a few clicks away.

That same confidence has served many people well in their financial lives. They learned how to budget, save, invest and build wealth.

However, retirement introduces a different challenge altogether. The challenges of retirement can often leave someone who is typically "good with money" feeling overwhelmed and vulnerable.

Why does retirement shift the goalposts?

Many people who consider themselves financially adept have spent their working years focused on one primary objective: Growth. They have worked hard, saved consistently, invested diligently and delayed gratification.

For many, that process built on discipline, knowledge and consistency has enabled them to accumulate meaningful retirement savings, pay down debt, raise families and build successful careers.

Retirement, however, changes the approach entirely. This is the point in the journey when three financial disciplines begin to intersect: Income, investments and taxes.

During our working years, these areas often operate independently. But in retirement, when people are in the distribution phase rather than the accumulation phase, they become interconnected.

The transition from accumulating wealth to coordinating wealth is one of the most overlooked and important challenges in personal finance.

Income

Income planning in retirement asks a different question than accumulation planning. The goal shifts from maximizing account balances to answering a much more practical question: "How am I going to get paid?"

Income planning becomes essential for creating a sustainable paycheck from assets that may need to last 30 years or more.

Investments

Investment planning also changes during retirement. During the growth phase, throughout your working years, market declines can often be viewed as temporary setbacks or even opportunities to invest at a discount.

But during retirement, the timing of losses matters. The same market decline that felt insignificant at age 40 can feel very different when withdrawals are occurring simultaneously. Protecting savings becomes increasingly important when regular contributions and dollar-cost averaging are no longer part of the equation.

Taxes

Then there is tax planning. For many retirees, taxes become more complicated.

• IRA withdrawals can affect tax brackets
• Tax brackets can affect how much Social Security becomes taxable
• Income can influence Medicare premiums for several years
• Decisions made today may affect surviving spouses and even the tax burden left to children

Making the pieces fit

In retirement, a decision in one area often affects the other two.

• If you increase withdrawals, taxes may rise
• Increase taxable income and Social Security taxation or Medicare premiums may change
• Reduce investment risk and future income potential may be affected

Everything becomes connected.

I've noticed a pattern among people approaching retirement. Many arrive with spreadsheets, account statements and years of disciplined saving behind them. They know what they've accumulated, but they're uncertain about how all the pieces fit together.

Questions begin to surface, such as:

• How much can I safely spend?
• When should I claim Social Security?
• Should I prioritize reducing taxes or maximizing income?
• How much investment risk should I still be taking?
• What happens if one spouse dies first?
• How will today's decisions affect my children tomorrow?

What makes these questions so unsettling is that they rarely have simple answers. Instead, the answers come only through developing careful, intentional strategies. And the reality is, in this space, there isn't a practice round.

During our working years, progress is relatively easy to measure. We receive a paycheck. We watch account balances grow. We contributed more this year than we did last year. Success is naturally measured by accumulation.

But retirement changes the scoreboard.

The questions become less about growth and more about sustainability. Instead of asking, "How much have I saved?" people begin asking, "Will what I've saved be enough?" The focus shifts from building wealth to making decisions that support a desired lifestyle for decades.

So many decisions

For those staring into the fog of retirement, uncertainty often has less to do with the size of a portfolio and more to do with the number of decisions that suddenly appear. The closer retirement gets, the more interconnected those decisions become.

What was once a straightforward objective — save and invest — becomes a series of questions involving income, taxes, risk, healthcare costs, legacy goals and lifestyle choices.

Understanding how those pieces work together often becomes more important than any individual investment selection.

You may be "good with money," but this season of life may leave you with more questions than ever.

However, having questions and needing clarity doesn't make someone bad with money.

Rather, it is a sign that the realities of retirement are coming into focus. And at this moment, making wise decisions is paramount in preserving the income, freedom and lifestyle that often take decades to build.

Retirement asks us to think differently about wealth. It is no longer measured solely by account balances or annual returns. It is measured by the ability of our resources to support the life we want to live.

Income, investments and taxes each play an important role. Yet their true value is realized only when they work together.

Dan Dunkin contributed to this article.

This appearance in Kiplinger was obtained through a public relations 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.

When Serena Williams stepped away from tennis in 2022, she very deliberately said, writing in Vogue (paywall), that she "never liked the word 'retirement.'"

"Maybe the best word to describe what I'm up to is 'evolution.' I'm here to tell you that I'm evolving away from tennis, toward other things that are important to me," she wrote, in what served as her announcement that she was, at least temporarily, leaving the profession.

She said she was making the move because she wanted to grow her family, and, as a woman, she couldn't do that without impacting her career. She also said she was interested in trying other work, like venture capital. With that very specifically worded announcement, Williams left her industry — with the door still open for her to return.

In the four years since then, Williams did exactly what she said she would. She had a second child and ramped up her work with Serena Ventures, her investment firm. And when she wanted to, she went back to that door she'd left open, accepting a wildcard to play at Wimbledon this summer.

With that, she established what I'll call the Serena Williams Rule of Retirement: Rather than plan a black-and-white retirement, plan to give yourself options.

Let your career 'evolve'

When you've spent decades building and prioritizing your career, the idea of one day abandoning it can seem terrifying and almost nonsensical. That's true even if you've already ascended to the C-suite and built up a more-than-sufficient nest egg.

"Why are we stressing out like that?" said Pam Krueger, founder and CEO of Wealthramp and a Kiplinger contributor. "Instead, have you ever seen a dimmer switch? Forget the on-and-off; it's a dimmer switch. And that's what Serena is doing, that's what her rule is, that's what she's teaching us."

This is largely why Krueger, a financial literacy advocate, urges people of all ages to "stop planning for retirement" and instead plan for optionality.

Now, it's easy to say that of course Serena Williams can wave a magic wand for a Wimbledon wildcard and do whatever she wants after ascending to the top of her industry and making many millions of dollars. But what about us mere mortals?

Optionality means keeping multiple paths open. You might choose a phased retirement, in which you gradually scale back your hours, take on part-time work, or accept "fractional" C-suite roles. Maybe you want to shift industries or work part-time on a passion project, which can mean anything from mentoring younger professionals to working as a handyman after decades in corporate life. You could even start a new venture, whether that's launching a consulting business or selling handmade crafts.

Giving yourself these options requires both a mindset shift and practical planning. A "mindset shift" sounds easier, but in practice, this might be the harder part. We are hardwired to believe the story that you work a career for a few decades and then retire, never to do anything productive again. That's why having an icon like Williams set an example is so important, because it can challenge how we, as a society, think a career path should go.

How optionality leads to a happier life

There are many reasons why giving yourself options, rather than restricting yourself to "retired" or "not retired," can make your life easier and happier.

1. Save your savings. On the practical side, picking up some work after you stop working full-time, even if you're making a fraction of what you made, means you don't have to dip as much into your savings. That leaves more of your nest egg untouched, allowing it to stay invested and keep growing.

"The physics of money are that the more you can leave the biggest chunk of money in your retirement account to draw down less at the beginning of those years, the more you're allowing the compound interest to work for you," Krueger said.

Working a little can save your savings in other ways. Venus Williams, for example, has also never formally retired and plays tournaments a handful of times a year. Last year, she half-jokingly said during an on-court interview that she "had to come back for the insurance." Jobs, even part-time ones, can provide benefits like healthcare that can preserve your savings a little longer.

2. You give yourself purpose and fulfillment. After retiring, some people become depressed or discontent because they feel that they're no longer contributing to the world. By picking up some work or staying connected to your past industry, you can maintain that feeling of purpose and accomplishment.

3. Make use of your skills. You spent years building up skills that can be applied in different ways. Williams, for example, was obviously an athlete, but at the same time, she was learning the ins and outs of investment as she was seen as an investment by sponsors. She then applied that experience to the VC world as an investor herself.

The skills and expertise that you gained don't have to disappear once you step back from your 9-to-5. You can find other ways to use them. This is also a way for you to show respect for yourself and trust in your years of experience.

4. Learn something new. Many studies have shown that learning new things makes people happier. By trying out something different in your later years, you give yourself opportunities to keep stretching your brain, which will make you happier.

Returning to your industry

Maybe, like Williams, you want to leave yourself the option of returning after you leave full-time work. Here's what to keep in mind:

• Don't burn your bridges. Like leaving any job, ensure you are respectful as you walk out the door.
• Nurture your relationships. If you had regular golf outings with colleagues, maintain those, within reason. Make time for occasional phone calls with people in your network. These steps will ensure that if the right opportunity arises, the people who are still there will have you in mind.
• Be open about continuing work. Make it apparent that you are still open to picking up work. Sometimes that's as simple as saying exactly that when you talk to former colleagues, or, if you're doing part-time or side gig work, sharing stories about it on a network like LinkedIn. (In Williams' case, that was sharing videos of herself on courts with her family.)
• Don't expect immediate triumph. If you do return to your old work, manage your expectations. People are often brought back to manage times of crisis or to hold a boat steady between leadership, such as an interim executive. Sometimes triumph is simply keeping a ship afloat. Sometimes, like Williams at Wimbledon, the triumph is in showing up and showing it can be done.

Don't be surprised if returning to the office is a little more intimidating than you remember. Environments change and turnover happens. Just remember that you were brought back because the company or industry feels you have something to offer. Carry that confidence with you, along with an open mindset regarding changes that occurred after you left.

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For decades, financial advisers sold the same allocation: 60% stocks, 40% bonds. It was clean. It was simple. It worked.

Until it didn't.

In 2022, both sides of that portfolio got crushed at the same time. Stocks fell. Bonds fell. The supposed hedge didn't hedge. And if you go back further, the financial crisis told a version of the same story.

The 60/40 wasn't built for this environment. It was built for one that no longer exists.

The math has changed

Think about why someone would put 40% of their wealth into bonds. In the late '70s and '80s, you could buy a 30-year Treasury yielding 15%. A piece of paper backed by the United States government paying you 15% a year. Of course you'd hold that. Anyone would.

That product doesn't exist anymore.

Interest rates fell for 40 straight years. They came back up recently, but a Treasury still pays you somewhere around 4%.

Meanwhile, the state that's backing that paper isn't what it was four decades ago. U.S. debt was less than a trillion dollars then. It's north of $36 trillion now. Ask yourself how confident you are in the full faith and credit of a government carrying that balance sheet.

The yield has diminished. The security behind it has diminished. And the correlation advantage — bonds zigging when stocks zag — has broken down. Stock and bond markets move together now more often than not.

The 40% side of the 60/40 portfolio can no longer deliver its two core promises: A competitive return and real diversification.

So why are people still running it? Because it's easy to sell. And because old habits die hard.

The menu has changed

The investment universe got bigger in those same 40 years.

When the 60/40 became standard, you had stocks and you had bonds. Those were the options. Today, you have access to asset classes that used to be reserved for endowments and family offices.

Private equity. Real estate. Venture. And you don't need $5 million to get in the door.

You can buy private equity exposure through a public ETF. Tech-focused PE, real estate PE, broad diversified PE. Some for as little as $500. Twenty years ago, none of this was available unless you had eight figures and the right connections. Most individual investors haven't caught up yet.

Where I keep my wealth

I'm not going to tell you what to do with your money. But I'll tell you what I do with mine.

I run closer to 40% private markets, 40% public equities, 20% split across crypto, gold and cash. No bonds. Zero.

On the public equity side, I start and stop with the S&P 500. The idea of being a stock picker is folly at best. You're competing against algorithms and institutions with more information and faster execution than you'll ever have. Buy the index. Let the market do its job.

On the private side, some of these PE vehicles trade as ETFs now. Diversification and liquidity. That used to be a trade-off. Now it doesn't need to be.

On cash and gold, they're the ballast. Money markets are yielding roughly the same as bonds right now. So the argument for locking capital into a bond fund when you can park it in cash at a similar rate and keep full liquidity? I don't see it.

Gold is the oldest store of value on earth. I don't need it to grow. I need it to sit there when everything else gets volatile.

A word on bitcoin

Crypto may seem like the black sheep in my allocation, so here's my reasoning.

I start and stop with bitcoin. Bitcoin is a roughly $2 trillion asset that the market still can't agree on. One camp says it's the greatest Ponzi scheme ever built — the greater fool theory playing out in real time.

The other camp says it's the reserve currency of the future. When the dollar fades, and every fiat currency eventually does, it's not going to be replaced by the yen or the euro. It's going to be replaced by something digital. Bitcoin is best positioned to be that thing.

Over almost 20 years, the price has oscillated between those two stories. It's been at $300. It's been above $100,000. If I knew where bitcoin would land, I wouldn't be writing about it. But a small allocation, sized to what you can stomach losing entirely, is an asymmetric bet.

The downside is bounded. The upside, if the reserve-currency thesis plays out, is not.

The point

You don't have to run my allocation. But there's no reason to keep running a model from an era when Treasuries paid 15% and private equity required a country club membership. Times change, and so should your strategy.

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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.

Dividend stocks are an important part of most investors' portfolios, and for good reason. For one, dividend stocks can boost your total investment returns over the long run, in part because they increase the yield on your original cost basis.

Dividends also provide income for investors, which is especially important for those nearing or in retirement.

How much do you know about dividend stocks? Test your knowledge with our short quiz. And don't worry if you miss an answer or two. You can follow the links below the quiz to refresh your knowledge on dividend investing.

More on dividend investing from the Kiplinger team:

• What Are Dividend Stocks?
• Best Dividend Stocks to Buy for Dependable Dividend Growth
• Best Dividend Kings for Decades of Dividend Growth
• The Kiplinger Dividend 15: Our Favorite Dividend-Paying Stocks
• Highest-Yielding Dividend Stocks in the S&P 500
• How to Use the Barbell Rule for Dividend Investing in Retirement
• Qualified Dividends vs Ordinary Dividends: Taxing Dividends

What do you do when you're suddenly in charge of everything?

I often point to Dorinda Medley from The Real Housewives of New York as a surprisingly relatable example. After her husband passed away, she spoke publicly about discovering just how much of the family's financial and household administration he had handled.

She has shared that she didn't even know who was paying certain bills and later uncovered investments and financial arrangements she hadn't previously been involved with.

While her circumstances involved significant wealth, the underlying challenge is one I see, as an attorney and financial professional with decades of hard-won expertise, far more often than people expect: When one spouse manages most of the financial life, the surviving spouse can find themselves trying to navigate complex decisions at the same time they are grieving.

In many households, one partner naturally becomes the person who handles the finances. They manage the accounts, coordinate with advisers and make the long-term decisions.

The other partner may understand the broader picture, but not the details — just like Dorinda.

That dynamic can work for years, until something changes. When it does, whether due to illness, loss or incapacity, the uninvolved spouse is suddenly responsible for everything.

When clients come to me in that situation, their first question is almost always the same. Where do I even start?

Looking for clarity

The answer is to focus on the information that creates the most clarity, as quickly as possible. In most cases, that starts with identifying key documents and accounts.

Tax returns are often the best entry point, because they provide a consolidated view of income, assets and the professionals involved.

From there, we work through locating bank and investment accounts, insurance policies and estate planning documents.

In many cases, this is where the first challenge appears. I have worked with clients who discovered accounts spread across five or six different institutions, with no centralized system and no clear understanding of what existed where. That fragmentation alone can make the situation feel overwhelming until it is organized piece by piece.

Once we know what exists, the next step is understanding how everything fits together. That means reviewing assets and debts, confirming how accounts are titled and, just as importantly, understanding beneficiary designations.

It is also critical to identify who has been named to act on your behalf. That includes executors, trustees and healthcare decision-makers.

We often find that just as there are gaps in account visibility, there are also gaps in these roles. Clients may not know who is listed, or those designations may be outdated. These are not abstract details. They directly affect how decisions are made and how quickly assets can be accessed.

Avoid costly mistakes

At the same time, this is where I see clients most at risk of making costly mistakes. When someone is overwhelmed, there is a natural inclination to act quickly just to regain a sense of control.

I often see people make significant changes to their investments early on or move large portions of their portfolio to cash simply because they are unsure what they own or how it is structured. While that can feel protective in the moment, it can create longer-term consequences if it is not part of a broader strategy.

There are also timing considerations that come into play. Certain benefits need to be evaluated, tax filings still need to be completed, and some decisions have deadlines attached to them.

This is why creating a clear order of operations is so important. Not everything needs to be addressed immediately, but some things do, and knowing the difference matters.

There are, of course, several priorities in the first few months.

Establishing a clear picture of cash flow is critical so that day-to-day expenses are covered without disruption.

It is also the time to evaluate any available benefits, including Social Security survivor benefits, and begin the process of updating estate documents and beneficiary designations to reflect the new reality.

One especially crucial item is ensuring that an estate tax return (Form 706) is filed within nine months of the death (or 15, if filing for an extension) in order to elect portability on a deceased spouse's unused federal estate tax exemption to retain maximum flexibility in estate tax planning.

Don't neglect the emotional side

Just as important as the technical work is the emotional side of the transition. Many uninvolved spouses feel like they should already understand these things.

I often hear clients say, "I wish I had paid more attention," or "I feel like I should know this."

The reality is, this is one of the most common situations I see. Financial confidence is not something you either have or do not have. It is something you build, and this is often where that process begins.

While much of my work is helping clients navigate this transition after the fact, I also spend time encouraging couples to plan ahead so neither partner is ever in the dark.

That does not mean both people need to manage every decision, but it does mean both should have a basic understanding of where accounts are held, who the key contacts are and what the overall plan looks like.

That level of transparency is often the difference between a difficult transition and an overwhelming one. It is what allows someone stepping into this role to move forward with clarity instead of starting from zero.

This is not a rare situation. It is something that plays out in real households every day. The goal is not just to respond well if it happens. The goal is to make sure that if it does, the person stepping in is prepared, supported and has a clear path forward.

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

It’s easy to see why Florida is a haven for retirees. Between the year-round warm weather, miles of coastline, and zero state income tax, the Sunshine State is already home to roughly 5 million people 65 and older.

However, relocating doesn't guarantee a lower cost of living, even for those moving from high-cost northern states. Unforeseen expenses in Florida can easily derail an otherwise solid retirement budget.

"Florida is great because there is no income tax," says Andy Smith, a certified financial planner at Edelman Financial Engines. "But people have to look at the total cost of living instead of focusing on one particular tax advantage."

From HOA fees to hefty insurance premiums, before you make the move, be sure to budget for these unexpected expenses.

1. Sky-high HOA fees

Whether you live in a condo or a community, homeowner's association fees are a fact of life in many Florida communities, and that fee can get expensive.

Florida leads the U.S. with the most expensive HOA fees, with seven of its cities charging the highest HOA fees, according to Realtor.com. Take Miami, for one example. The owner of a $425,000 home in Miami pays $617 a month in HOA fees.

2. Surprise condo special assessment fees

Ever since the 2021 collapse of the Surfside condo in Miami, Florida, associations with buildings three stories or higher are subject to mandatory structural inspections and must have fully funded reserves. When condo associations don't, they can charge unit owners a one-time special assessment.

"Many of these buildings are quite old," says John Gillet, CEO and founder of Gillet Agency. "You should thoroughly investigate the condo before making a financial move."

If you can't get a sense of how the condo association is run, what the financials look like and the structure of the building and the unit, you should hire a consultant to research before buying, Gillet said. An assessment fee, if ever required, can range from a few hundred dollars to tens of thousands of dollars.

3. Rising insurance premiums

Expect to pay more than the national average for insurance in Florida, whether it's homeowners, health, or auto. That's across the board in the state, and even higher in certain metro areas. "Insurance is very, very expensive," says Michael Cabanas, a regional managing director at Fiduciary Trust and a longtime Miami resident. "If you live in a flood zone, flood insurance is required by law, and it's not cheap." The same goes for auto insurance. Florida is among the costliest states for auto insurance, according to a U.S. News & World Report ranking.

4. Year-round utility bills

Florida electricity rates are below the national average, but residents' monthly utility bills are among the highest in the country. The reason? Year-round heat and the need to stay cool.

"Instead of two or three months, you pay for eleven months out of the year," says Cabanas. "That's an expense some northeasterners may not anticipate when they move down here."

5. Lack of caregivers

Supply and demand are on display in Florida when it comes to caregiving. As retirees flock to the state, demand for caregivers is rising, driving up the cost of care. In fact, Florida ranks last in caregivers, with just 17 personal care and home health aides per 1,000 adults aged 65 and older. That compares to the national average of 65 per 1,000, according to America's Health Rankings.

6. Property tax resets

Florida caps annual property tax assessments for existing homeowners at 3%, but when a retiree buys a home, that number resets to the market rate. When they get their tax bill in year two, homeowners could be in for a big shock when their property taxes are double or triple what the previous owner paid.

Calculate everything before you make a move

Just because there are unexpected costs associated with moving to Florida doesn't mean you shouldn't make the move. Every town, city and state has different costs that may offset tax breaks. The good news is that with a little research, you can figure out what they are ahead of time and determine if the Sunshine State still makes financial sense for your retirement.

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Retirees are often advised to maintain diversified portfolios while focusing on assets that can produce steady income. REITs can help in both regards.

REITs, or real estate investment trusts, are companies that operate portfolios of properties, whether it's data centers, malls, fulfillment centers, healthcare facilities, or residential complexes. They make it possible for retirees to branch out into real estate without actually having to own or maintain physical property as investments.

As of early 2024, 50% of U.S. households owned REITs, according to the National Association of Real Estate Investment Trusts. And for retirees, REITs offer a couple of distinct benefits.

REITs tend to pay above-average dividends since they're required to distribute at least 90% of their taxable income to shareholders on an annual basis. REITs also have inherent inflation protection. They often can raise rents and pass that income along to shareholders. And those higher dividends can help retirees stay ahead of rising costs.

But are REITs a retirement investment worth pursuing? Or is there too much risk involved?

There's upside, but it comes at a cost

While REITs can serve as a source of steady income for retirees, they're not without risk, says

Mike McCracken, president and founder of Wealth Guide Financial.

"REITs could be part of a diversified retirement portfolio, but I don’t think they’re as safe as many people assume," McCracken says.

"Clients have told me that they like the idea of holding real estate without the headache of tenants or repairs, and their thoughts are that REITs can satisfy that desire. That may have been the case prior to 2021, but rising interest rates have caused REITs to underperform low-cost stock portfolios over the last few years," McCracken continues.

Adam Vega, CFP and Managing Partner at Avance Private Wealth Management, warns that REITs aren't necessarily as liquid as you might think.

"Publicly traded REITs are those that trade on an exchange, like any normal stock would. You can buy it today and, through the public markets, sell it tomorrow. Private REITs do not trade on an exchange. There is no open market available, so if you bought it today, you are at the mercy of the issuer of when you might be able to sell it," he explains.

In fact, Vega cautions, "With a private REIT, it could take years to find the right buyer. This isn't inherently bad, but this should be understood, as the lack of liquidity is often what helps keep the price more stable on private REITs."

Another thing to consider is that REITs are very sensitive to interest rates.

"Rates from 1985 to 2021 generally were slowly falling, providing decent safety with investing in REITs," McCracken explains. "When rates go up, [REIT] share prices usually drop because their high dividend yields become less attractive compared to bonds."

REITs also aren't immune to sector-specific meltdowns. As McCracken points out, office REITs struggled with occupancy issues during and after the pandemic, when remote work was all the rage and companies were reluctant to renew leases and bring workers back to the office.

Other sectors could be similarly vulnerable in the future. If regulations come down the pike that crack down on data centers, REITs that operate those facilities could see their value decrease.

Have REITs become trendier?

Despite the risks, McCracken says he's seen a growing number of retirees put money into REITs.

"There has been some increased interest in REITs over the last 10 to 15 years, mostly because they are easy to buy and sell compared to owning actual real estate," he says. But that doesn't mean those people chose wisely.

As McCracken explains, many of his clients who hold REITs have been disappointed with the returns those assets produced over the past five years in particular.

"Many of them would have been better off in a simple, low-cost stock index fund," he says.

Vega, meanwhile, says he's seeing more interest in REITs despite the fact that they had a "tough 2025."

"Higher rates slowed down the sector, and as an underperforming asset, it puts it back on the radar as an opportunity to consider. For those seeking income and diversification, it is starting to look attractive again," he says.

Should REITs be a part of your retirement investment strategy?

Whether REITs are a good choice for you depends on your income needs, goals, and appetite for risk. But McCracken certainly wouldn't say they're right for everyone.

"Currently, I tell my clients that REITs have had their day and are generally underperforming the broad stock market indexes in recent years," he says. "For most retirees, I think there are simpler and more effective ways to get growth and income without adding the extra complexity or the interest rate risk that comes with investing in REITs."

Vega says many retirees like the consistency of payments REITs can provide.

They can also help with diversification. The key, he says, is to limit exposure.

"REITs should be considered part of your real estate allocation," he says. "Sticking to normal diversification rules, a good guideline is no more than 15% of a portfolio in any one sector."

Read More

• The Best REITs to Buy
• 5 Ways To Increase Your Investment Income In Retirement
• You've Mastered Asset Allocation — Now It’s Time for Asset Location
• Average Net Worth by Age

Sometimes, punching the clock for the very last time can feel more unsettling than exciting, even if your biggest fear isn't running out of money. Instead, it might be losing the daily structure, work friendships, or the purpose and identity that the workplace provided.

The good news? There are both practical and psychological signs that you're truly ready for retirement, and on your way to enjoying one of the best chapters of your life.

Here are 8 key signs you'll thrive in retirement — even if part of you is quietly panicking.

1. You're already practicing retirement

If you've already started experimenting with having spontaneous days — whether during long weekends, vacations or through phased work — and found yourself energized rather than anxious, that's an indicator you're ready to retire.

People who thrive in retirement often discover they can create their own rhythm. They replace the old 9-to-5 with new hobbies, volunteering, exercise, taking classes, or spending more time with the grandkids or other family — and they do it without feeling particularly anxious or guilty.

Rod Mitchell, Psychologist and Clinical Director at Emotions Therapy in Calgary, explains that one indicator of how prepared someone is for retirement is whether they have developed their own daily structure during unscheduled periods. "The people who tend to thrive in retirement are those who feel calm, not anxious, when they look at an empty calendar for the coming week," Mitchell said.

2. Your finances give you real breathing room

Financial security is the foundation of a happy retirement. You don't need to be wealthy, with the magic number of $1.46 million in your pocket. However, you should have a clear picture of your income sources from Social Security, retirement accounts, savings and investments, and a realistic withdrawal plan in retirement.

A good rule of thumb is that once your everyday expenses are covered with breathing room and your emergency fund is solid, you can shift your focus from survival to lifestyle. From that point, retirement calculators and annual financial reviews turn leftover money worries into actionable plans for a comfortable future and a happy retirement.

3. You've got a life beyond work

One of the strongest predictors of happiness in retirement is having a few (or many) interests and relationships outside of work. If you have friends, community groups, or passions that are not specific to your job title, you're already ahead of the game.

Elizabeth Lombardo, PhD, Concierge Coach at Elizabeth Lombardo International, LLC, says that since we are all social creatures, having strong relationships outside of work is a step toward ensuring you thrive in retirement. "If your entire social circle revolves around your job, you might worry about loneliness. Cultivating new friendships through community groups, hobbies, or volunteering can help you build a supportive network that sustains your happiness in retirement."

4. You're curious about the future

A subtle but telling sign you are anticipating what's yet to come is shifting your thinking from "I'll miss the office" to "I wonder what I'll try next."

Retirement-ready individuals tend to feel some curiosity and excitement when they think about life beyond work. They may be itching to talk about travel, learning a new skill, starting their own small business, or finally tackling that list of long-overdue projects.

"The happiest retirees are those who have planned for the transition," says Stuart Schiffman, Founder and Principal at Compound Wealth Advisors. "They take into account the time they have left, the goals they want to achieve for themselves, and the values they want to instill as a legacy for future generations."

5. You have a flexible plan for the future

Thriving in retirement doesn't require a minute-by-minute schedule, but having some structure helps. For example, Monday for exercise and volunteering, Tuesday for grandkids and yard work. Allowing yourself the flexibility to change your plans is what separates those who flourish from those who feel at loose ends.

Financially, this also means having a flexible spending plan that takes into account healthcare expenses, travel costs and money leftover for fun, without derailing your nest egg.

6. You're comfortable with a slower pace

Work often defines who we are. A key psychological sign of a happy retiree is when you start separating your self-worth from your job title. If you can imagine introducing yourself without mentioning what you used to do for a living — and feel okay about it — you're making progress.

"This perspective allows retirement to represent a period of potential personal development rather than an end to previous experiences," said Dr. Lauren Grawert, MD, Clinical Advisor at The Garden Recovery and Wellness.

7. Your physical and mental health are priorities

Preparing to succeed in retirement means taking care of your physical and mental health with regular checkups, physical activity, social connections and good sleep.

On the financial side, long-term estate planning and health care cost estimates are factors you need to consider when laying out your retirement budget. Long-term care is expensive, and preparing ahead of time can make all the difference between a stressful and stress-free retirement.

8. You're more excited than scared about the future

It's normal to have mixed emotions about retirement. But if feelings of possibility and relief are starting to outweigh the fear of losing the structure of the workplace, you're ready to kick the day job goodbye. Retirees who thrive treat the transition like any big life change, with preparation, patience and a willingness to adjust.

Make sure your money is working for you

A big part of thriving in retirement is knowing your money is working for you. Here are a few practical tips that can help reduce any anxiety you might be feeling:

• You've stress-tested your estate and retirement plans against market downturns, inflation and a longer lifespan.
• You maintain a diversified portfolio with some conservative investments as you age.
• You've considered part-time work, consulting, or a small "retirement business" as a way to phase into retirement.
• Healthcare and long-term care costs, including Medicare supplements, HSAs, or insurance, are factored in.

Give it a try first

Lombardo offers these final words of advice: "I often encourage people to try out retirement by taking an extended vacation where they are completely cut off from work. This is not feasible for everyone, but for those who are considering retiring and not sure that they can handle it, an extended period away from work allows them to start to develop some of the important components of a healthy retirement."

Do you recognize any of these signs in yourself? If so, bravo. You're not just surviving retirement, you're well on your way to making it your best chapter yet.

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For older adults who need supervised care throughout the day, an adult day center can offer some much-needed support. These nonresidential facilities provide services such as medical assistance, social interaction and organized activities for participants, who typically have some physical or cognitive impairment. And their adult child, spouse or other caregiver can use the time to work or take a break from their caregiving responsibilities.

Generally, there are three types of adult day centers. Social day centers primarily offer opportunities for attendees to interact with one another and participate in group activities. A medical day center also provides health-focused services, such as physical or occupational therapy. Specialized centers include services such as memory care or therapeutic exercises for those with certain health conditions, such as dementia or Parkinson's disease.

To find local day centers, Tia Sauceda, executive director of the National Adult Day Services Association, suggests using NADSA's tool or this AARP-sponsored directory (click on "Community Services"). Or ask your loved one's doctor for recommendations. Once you've narrowed down a list of centers to consider, contact your state's department of aging to verify that they are licensed, and visit them in person, says William Zagorski, president of American Senior Care Centers, in Nashville. Day centers typically require a doctor's letter detailing the attendee's health condition.

Financial assistance and tax breaks

According to a 2025 study from CareScout, a site families can use to search for care providers, adult day centers charge a median daily rate of $95. Some centers have additional fees for certain services, such as a certified nursing assistant providing showers, says Sauceda.

While original Medicare generally doesn't pay for care at an adult day center, some Medicare Advantage (Part C) private insurance plans cover the expense. Medicaid, the government-provided health insurance for low-income Americans, may also cover day center care.

A specialized Medicare/Medicaid program that provides coverage for adult day center services is the Program of All-Inclusive Care for the Elderly (PACE). It aims to help older adults who need a nursing home level of care to continue living in their homes and is offered in 33 states (see the list here) and Washington, D.C.

A couple of other possible avenues for financial assistance: If your loved one has a long-term-care insurance policy, see whether care from an adult day center is included. Military veterans enrolled in the Veterans Affairs Medical Benefits Package who need clinical care are eligible for coverage at an adult day center.

Don't overlook tax breaks you may qualify for as a caregiver. If your loved one is unable to care for himself or herself and lives with you at least six months of the year, and you pay for them to attend a day center while you work or seek employment, you may be able to claim the child and dependent care tax credit.

If your employer offers a dependent care flexible savings account, through which you can set aside pretax dollars to pay for a dependent's care while you work, you may use those funds for day center care. (Note that you can't use the same expenses your FSA reimburses to claim the child and dependent care tax credit.)

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Usually, there are crosscurrents in financial markets, but today's seem particularly demanding.

The war in Iran seems always there, affecting short-term policies while being a longer-term problem. We don't know where it will go, just that the on-again, off-again intensity of the war affects the stock and bond markets.

Adding to this scenario is AI. Artificial intelligence is very promising, but it's hard to determine who the big winners are. The staggering sums of money that companies are investing in AI is worrying many investors, while the earnings that AI-related companies are reporting are impressive.

But will that growth continue and at what pace? This clouds the longer-term outlook.

Some investors are throwing their hands in the air and selling all or some of their equity holdings.

Here's an option: Fixed income

Meanwhile, fixed income is attractive, with rates having risen. For example, the 30-year Treasury bond is back up to about 5%, a number that hasn't been seen except for brief periods since July 2007.

The U.S. Treasury securities market has grown substantially, and individual investors have participated in its growth. Treasuries carry the U.S. government guarantee of timely payment of principal and interest. The interest that U.S. Treasuries pay is exempt from state and local taxes. This makes them the highest-quality investment of their type.

So, what is the best way to buy Treasury securities?

The go-to way to trade Treasuries used to be to visit TreasuryDirect.gov, but not anymore. The much larger Treasury market has flooded TreasuryDirect and made it impossible for the site to keep up with demand.

There are many reasons for this growth, including the increased share of insurance companies, money market instruments and broker-dealers buying Treasuries; the Federal Reserve shrinking its balance sheet; and pension funds and other institutions increasing their holdings.

The result is that the site recently reported delays in its response to fill mail requests. Among other delays, it could take nine months to complete converting paper savings bonds into electronic bonds. To cash paper savings bonds could take at least three months.

And requests to find lost, stolen or missing savings bonds would take a minimum of 11 months to process.

More bond trading

Bond trading volume is probably going to increase. Kevin McPartland of Crisil Coalition Greenwich reported in April that corporate bond market trading hit an average of $65 billion traded per day in March.

This was a record, surpassing the volume of the previous month, which was also a record.

Also, on the last day of March, $108 billion was traded, a single-day record for bond trading.

McPartland also pointed out that this higher bond volume was partly being facilitated by the advanced electronics used by institutional traders.

Another factor is that developed execution management systems are being employed, along with more standardized post-trade processes.

He pointed out that even though the systems and tools are more advanced, good people handling the processes are still needed. "Traders want a human element even when trading electronically," he wrote.

How to buy and sell fixed income, including Treasuries

Brokerage firms have always offered fixed-income securities, including Treasuries, but they have improved the ways for investors to buy and sell, even for small amounts. For example, the electronic trading platform Public has secondary market liquidity, an easy-to-navigate interface and other advantages.

Although bonds usually trade in $1,000 increments, Public trades corporate bonds and Treasuries in as few as $100 increments.

Investors can also build ladders at Public, spreading maturity dates to match investor needs. This can be done with Treasuries or bonds. Investors can call Public anytime, day or night, for support.

Another broker, Charles Schwab, advises that certificates of deposit (CDs) and Treasury bonds are two of the safest fixed-income investments you can make. And both can add diversity to your portfolio, generate income and protect principal. (Schwab also points out that investors can lose money in these securities.)

Schwab, like other brokerages, has fixed-income specialists available for calls from investors, as well as in-house traders who can be contacted either by phone or online. Schwab additionally builds taxable and tax-free Treasury and bond ladders for investors.

Fidelity Investments created a fixed-income site that offers a wide range of bonds, Treasuries and other offerings — 75,000 to 100,000 new issues and secondary securities are offered.

Fidelity charges only $1 markup or markdown for bonds traded in the secondary market; it charges no fee for online U.S. Treasuries.

For qualified clients, it offers help from fixed-income specialists and provides a high-net-worth desk to help investors with bonds and CDs.

Interactive Brokers (IBKR) is another broker committed to upgrading bond trading to a new standard and doing it on a worldwide basis.

On its platform, investors can invest globally in many financial securities, including equities, options, currencies, futures, bonds and funds. Accounts can be funded in many currencies, and trades can be denominated in different currencies. Market data can be accessed six days a week, 24 hours a day.

Thomas Frank of IBKR said, "We aim to provide our clients with the most flexible and comprehensive trading environment possible."

To that end, IBKR offers over 1 million corporate, municipal, non-U.S. sovereign bonds and Treasuries. These are offered without markups or built-in spreads.

ETFs that are unique

The professionals at investment management firm F/m Investments believe that investors have sent a clear message — they want safety, and they want to be shielded against inflation.

According to F/m, that's why investors poured $25 billion into ultra-short-duration U.S. Treasury ETFs. The funds started coming into the ETFs — BIL, SHV, SGOV and TBIL — at the outset of the Iran conflict and took only six weeks to be deposited.

The reason for the investment surge, according to F/m, is that these ETFs pay an attractive rate.

Also, if the conflict raises inflation further, these ETFs can reset soon to receive higher yields. And principal is protected because these securities will fall less than longer-term bonds as a reaction from the market adjustment to the higher rate.

F/m offers investors its single-maturity Treasury ETFs, called the U.S. Benchmark Series. The series makes it possible to buy Treasury ETFs during stock market hours and lock in the current on-the-run yield. On-the-run refers to the securities most recently auctioned. The securities are held only until the next auction, and they are sold, with the proceeds being used to buy a new series being auctioned.

The U.S. Benchmark Series is available in the full maturity range of Treasury bills, bonds and notes. This includes all securities from the 3-month Treasury bill ETF (TBIL) to the 30-year Treasury bond ETF (UTHY).

Treasury yields are attractive, even at the short maturity end: The TBIL yield is 3.54%; UTHY is 4.85%. This yield will change throughout the trading day; the market price will price in changes. The market price of publicly traded Treasuries and other income securities, in an ETF structure or individual securities, will fluctuate, and money can be made or lost.

The U.S. Benchmark Series offers maturity date diversification. As interest rates fluctuate between the series offerings, investors can switch into a higher-yielding Treasury or stay where they are.

The ETF series attempts to pay interest monthly, another advantage over holding individual Treasuries. The expense ratio is reasonable at 0.15% per annum.

Navigating today's volatile markets requires staying informed and being flexible, but whether you choose to buy individual Treasuries through a brokerage or opt for the simplicity of ETFs, there are reliable tools to help you protect your capital and generate steady income.

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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.

Retirement has a lot of moving parts, and planning for them can be overwhelming.

Taxes, investments, Social Security, estate planning, healthcare and income strategies all compete for attention, and many retirees end up postponing important decisions because they aren't sure where to start.

As a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that the good news is that not every improvement requires a complete overhaul of your financial plan.

In fact, some of the most impactful retirement moves can be implemented relatively quickly.

While no single strategy is a silver bullet, taking action on a handful of key areas today could improve tax efficiency, simplify your finances and create more flexibility later in retirement.

Below are 10 retirement fixes worth considering.

1. Review whether Roth conversions make sense

For many retirees and pre-retirees, Roth conversions remain one of the most powerful tax-planning opportunities available (I talk about Roth conversions more in depth in my bestselling book I Hate Taxes, which you can request for free here).

The basic Roth conversion concept is straightforward: Move money from a traditional IRA into a Roth IRA, pay taxes on the converted amount today and enjoy tax-free withdrawals in the future.

This strategy can be especially attractive for retirees who expect a higher future taxable income from pensions, required minimum distributions (RMDs) and Social Security. By paying taxes now, while rates remain historically low, you could reduce future tax burdens and create greater flexibility later.

That said, Roth conversions are rarely as simple as they appear. They can affect Medicare premiums, Social Security taxation and other aspects of your tax return.

Before making a move, it's important to run the numbers and look at them carefully.

2. Take advantage of available charitable tax benefits

Many retirees are charitable by nature, yet they often miss opportunities to maximize the tax benefits of their giving. Recent tax law changes have expanded charitable deduction opportunities for some taxpayers, even those who don't itemize deductions.

A little organization today could result in significant tax savings when it's time to file.

3. Improve your tax location strategy

Most investors focus heavily on asset allocation. Far fewer pay attention to asset location.

Asset allocation determines what you own, but asset location determines where you own it.

For example, growth-oriented investments might be more valuable inside Roth accounts because future appreciation could be tax-free.

Meanwhile, more conservative holdings could be appropriate inside tax-deferred retirement accounts.

Two investors can own identical portfolios yet experience very different tax outcomes depending on how their investments are positioned across account types.

Reviewing account placement might not require changing your investments at all, but it can have a meaningful impact over time.

4. Maximize retirement account contributions

Many workers increase their salaries over time but forget to increase their retirement contributions. If you're still employed, review your current contribution levels to workplace plans, IRAs and health savings accounts (HSAs).

Contribution limits often increase, and individuals age 50 and older may qualify for additional catch-up contributions.

A small adjustment to your payroll deductions today could translate into thousands of additional dollars for retirement down the road.

5. Reevaluate where excess cash is sitting

Many retirees and near-retirees accumulate large balances in savings accounts or taxable brokerage accounts while underutilizing tax-advantaged retirement vehicles.

If you have excess cash and are eligible to contribute to retirement accounts, consider whether those dollars could be working harder in a Roth IRA, Roth 401(k), traditional IRA or HSA.

In many cases, repositioning existing assets can improve long-term tax efficiency without changing your overall investment strategy.

6. Become more tax-efficient in taxable accounts

For investors with substantial brokerage accounts, tax management can be just as important as investment management.

One opportunity many people overlook is tax-loss harvesting, which involves realizing investment losses to offset gains or reducing taxable income. Over time, these tax savings can add up significantly.

Investors with larger taxable portfolios could also benefit from strategies such as direct indexing, which can provide additional opportunities to harvest losses while maintaining market exposure.

Even modest improvements in tax efficiency can create significant long-term value.

7. Audit your mutual funds

Many investors continue to hold mutual funds purchased years ago without reviewing whether those holdings remain appropriate. Some mutual funds carry higher internal expenses than comparable ETFs or index funds, and others may generate taxable distributions that create unexpected consequences in brokerage accounts.

Conducting a mutual fund audit doesn't necessarily mean replacing every holding.

However, reviewing expenses, tax efficiency and performance relative to alternatives can help identify opportunities for improvement.

8. Update your estate planning documents

This might be the least exciting item on the list, but it could be among the most important.

Wills, trusts, powers of attorney and healthcare directives are foundational components of a retirement plan, and yet, most Americans either don't have these documents or haven't reviewed them in years.

Life changes. Laws change. Family circumstances change. If your estate plan hasn't been updated recently, now may be the time to revisit it.

Equally important, make sure beneficiary designations on retirement accounts and insurance policies align with your overall plan and goals.

9. Simplify and consolidate accounts

Many retirees accumulate accounts over decades of employment. A former 401(k) here. An IRA there. A brokerage account somewhere else. Before long, keeping track of everything becomes unnecessarily complicated.

Consolidation might not improve investment returns, but it can make your finances easier to track.

It could also simplify tax reporting, improve organization and reduce confusion for spouses or heirs if something happens to you.

Sometimes the greatest benefit isn't financial performance; it's peace of mind.

10. Don't forget to enjoy the money

This final fix may be the most challenging one for diligent savers. Many successful retirees spent 30 or 40 years accumulating wealth and have developed strong saving habits, avoided lifestyle inflation and consistently prioritized financial security.

The challenge is that those same habits can make it difficult to spend money in retirement. Retirees still need a plan to avoid overspending, but many aren't in danger of running out of money; they're in danger of never fully enjoying what they've worked so hard to build.

Whether it's traveling with family, helping children and grandchildren, supporting charitable causes or simply creating memorable experiences, retirement isn't just about preserving assets; it's about using those assets to support the life you want to live.

After all, while running out of money is a legitimate concern, running out of time might be the greater risk.

The most successful retirement plans balance both sides of the equation: They protect your future while giving you permission to enjoy the present.

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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.

This is a story about the largest lizard and the largest health care payer in the country. But mostly, it’s about the millions of Medicare beneficiaries who might receive coverage of GLP-1 drugs.

Americans have taken to these drugs fast. Eleven percent of U.S. adults now use a GLP-1 for weight loss, while 15% say they’ve used one at some point, according to Gallup.

Now Medicare has joined in. As of July 1, it covers weight-loss drugs for the first time in the program’s history. Eligible beneficiaries can get Wegovy, Zepbound or Foundayo for $50 a month through the Medicare GLP-1 Bridge.

Sounds great, right? Well, as with most things involving Medicare, it’s more complicated than the headline. There’s a catch. Or rather, catches.

Here’s what to understand before counting on cheap GLP-1 coverage in retirement.

Catch #1: The coverage has an expiration date

It helps to know where GLP-1s come from.

GLP-1 drugs trace back to a compound in the saliva of the Gila monster that mimics a human gut hormone signaling fullness. Researchers originally built it into a treatment for type 2 diabetes, not weight loss.

That distinction still governs everything. When Congress created Medicare Part D, it barred coverage of drugs used for weight loss, which were then considered unsafe, ineffective or both. The exclusion is still law today.

The wrinkle is that it applies to the use, not the molecule. Prescribe GLP-1s for type 2 diabetes, cardiovascular risk or sleep apnea and Part D covers them like any other drug. Prescribe the identical injection for obesity alone and Medicare is legally forbidden to pay.

So the Centers for Medicare & Medicaid Services, the federal agency that runs Medicare, built a workaround. The Bridge is a demonstration program that operates outside your Part D plan, through a separate CMS claims processor. It expires on December 31, 2027.

Catch #2: Long-term coverage remains in limbo

The Bridge was supposed to have a sequel. A longer-term program called the BALANCE Model would take over in 2027 and run through 2031.

BALANCE, however, needed insurers. Plans representing at least 80% of Part D enrollment had to volunteer by April 20, 2026. They didn't.

Therefore, CMS responded by extending the Bridge from six months to 18. That patched 2027 and did nothing for 2028. That leaves older adults trying to plan prescription costs around a program with no confirmed successor.

It’s why Jeff Judge, CFP® and managing partner of Chesapeake Financial Planners who works with Medicare-age clients, treats that date as fact rather than forecast.

“We build the plan assuming the Bridge ends on schedule, then treat any extension as a bonus, not something to count on,” he says.

Catch #3: You probably don’t qualify

An estimated 38.9% of U.S. adults 60 and older are living with obesity. Yet, very few will get this deal.

You’ll need a body mass index (BMI) of at least 27 paired with a qualifying condition such as prediabetes, a history of heart attack or stroke or peripheral artery disease. At a BMI of 30 or higher, heart failure, uncontrolled hypertension, chronic kidney disease or severe sleep apnea can open the door.

KFF estimates 3.8 million beneficiaries qualify, out of more than 69 million people on Medicare. That’s roughly one in 18.

Your doctor also has to clear prior authorization through the central CMS processor, not your own Part D plan.

Dorothea Vafiadis, the National Council on Aging’s Senior Strategist for Healthy Aging, expects people to get stuck well before that.

"Medicare beneficiaries aren’t routinely monitoring CMS demonstration programs, and many won’t know if this benefit exists unless they hear about it from a trusted source," she observes.

Catch #4: The $50 hides a few things

Without insurance, these drugs run roughly $900 to $1,400 a month, so $50 looks like a rounding error. Two design quirks, however, could make it cost more than it appears.

First, the $50 doesn’t count toward anything. Because the Bridge sits outside Part D, that copay never touches your deductible or your annual out-of-pocket cap, which is $2,100 in 2026.

"Clients assume hitting the cap means their drug costs are done for the year," Judge says. "This one keeps billing regardless."

Second, Extra Help doesn't apply. Beneficiaries in the Low-Income Subsidy program, who typically pay little or nothing for medications, owe the full $50.

"For many older adults living on fixed incomes, an additional $50 per month, or $600 annually, is a substantial financial burden that may put treatment out of reach," Vafiadis says.

A third cost catches people who aren’t in Part D at all. Roughly 14 million people eligible for Part D aren’t enrolled, Vafiadis notes, and the Bridge requires a drug plan. For them, she says, the true cost extends well beyond the $50 copay, adding monthly premiums and possibly late enrollment penalties.

Catch #5: Getting on it is easier than staying on it

Say you qualify and the drug works. Three things can still take it away.

Your plan can change, as any successor to BALANCE would likely be voluntary. So keeping your medication could require switching Part D plans.

"Switching Part D plans to chase GLP-1 access can quietly wreck coverage on someone’s other five prescriptions," Judge says. "A plan that covers the GLP-1 beautifully might reformulate their blood pressure medication into a higher tier."

You may also stop on your own. Between 50% and 65% of patients quit within the first year, usually over cost, side effects or coverage barriers. A 2026 meta-analysis in eClinicalMedicine found patients regain about 60% of lost weight within a year of stopping.

Perhaps most importantly, your doctor may hesitate. Only about one in 10 participants in the trials that made these drugs famous was 65 or older, which means information about benefits and side effects in the 60-and-older population is limited. Consider that muscle loss is a known side effect. In an older adult, that’s a fall risk rather than a cosmetic issue.

Steps you can take now to secure GLP-1

Older adults mostly aren’t chasing the cultural version of these drugs. KFF polling found that among adults 65 and older, 8% had taken a GLP-1 for a chronic condition while 1% took one for weight loss. For most, this is disease management, which makes it worth handling carefully.

Ask about a covered diagnosis first. If you have type 2 diabetes, sleep apnea, MASH or qualifying cardiovascular risk, that route runs through your regular Part D plan, counts toward your cap and isn’t scheduled to disappear at the end of 2027.

"For a client who qualifies both ways, I generally point them toward the covered-diagnosis route for the long-term stability, even if the near-term cost looks less predictable," Judge says.

Budget the $50 separately. That's about $900 over the program, and neither your out-of-pocket cap nor Extra Help will soften it.

Document your conditions now. Prior authorization requires it, and the paperwork could move slowly.

Bring your whole drug list to open enrollment, October 15 through December 7. Not just the GLP-1.

Ask your prescriber about 2028 before you start. What happens if coverage lapses? Have that conversation in year one.

Price your fallbacks. Manufacturer direct-to-consumer programs, TrumpRx and pharmacy discount pricing all exist.

Because of the growing popularity of these drugs, Congress or CMS may yet build something permanent. But that’s still to be determined.

The Gila monster gets through the desert by hunkering down and waiting out conditions. We don’t have that luxury. Better to start planning now, while the program is still in front of you, so you’re not left in a desert of information when the coverage runs dry.

Read More

• The Longevity Blueprint: 4 Everyday Signs You’re Tracked for a Longer Life
• 10 Medicare Changes to Watch in 2026
• How Obesity Drugs Like Ozempic Could Revolutionize Retirement

One of the most enjoyable aspects of retirement for married couples is finally having more time to spend together and the financial freedom to maximize those years.

That's possible because during their working years and into retirement, they've had a unified financial structure that's worked well — filing taxes jointly and budgeting based on their combined income.

But eventually, they must plan for the time when one of them is alone and make sure the survivor will be as financially protected as possible. Most married couples do not plan for that clearly enough.

When a spouse dies, the surviving spouse may still need much of the same income for the usual expenses — the house, property taxes, utilities, insurance, medical costs, family support and lifestyle.

But their tax structure changes, and they may be subject to the "widow's penalty" when their tax filing status changes from married filing jointly to single. Suddenly, tax brackets compress, the standard deduction changes and income that once fit comfortably inside a married tax structure may become more heavily taxed.

Picture a surviving spouse sitting at the kitchen table, looking at the same accounts, needing the same dignity but having less tax room to work with. No one wants to think about that. This is where many retirement plans fail emotionally, not just mathematically. They may protect the portfolio, but they do not protect the person who is left behind.

A new tax world for a surviving spouse — and its cascading effects

I remember when this issue first became real to me. It was years ago, when a longtime client — widowed a little more than a year — came into my office with her tax return and asked a question that seemed simple: "Why did my tax bill go up after my husband died?"

Her household income had gone down. Her husband's Social Security check was gone. Certain expenses had changed. Emotionally, she was still trying to adjust to life alone.

But financially, something did not add up. She had less income than before, yet her tax situation felt worse.

That is the widow's penalty. And once you understand it, you begin seeing it everywhere.

After one spouse dies, the surviving spouse often moves into a very different tax world. The tax code treats married couples filing jointly more generously than single filers.

• The brackets are wider
• The standard deduction is larger
• Medicare income thresholds are higher
• Long-term capital gains thresholds can be more favorable
• The net investment income tax (NIIT) threshold is also higher

For the 2026 tax year, a married couple filing jointly does not enter the 24% marginal income tax bracket until their taxable income exceeds $211,401 (the ceiling for that bracket is $403,550). But the single threshold is roughly half the joint threshold. A single filer for 2026 reaches the 24% bracket once taxable income exceeds $105,700 (up to $201,775).

The standard deduction compresses, too. For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. The surviving spouse may still have the same expenses and lifestyle needs they did when their spouse was alive, but has less tax room to absorb the income that funds them.

A surviving spouse may lose one Social Security check but typically keeps the larger of the two benefits. Pensions with survivor elections may continue. Required minimum distributions may continue. Portfolio income may continue. Rental income, annuity income and investment distributions may continue.

The survivor may end up retaining 70%, 80% or even 90% of the household income but lose the joint tax structure entirely.

For example, a couple with $140,000 of taxable retirement income may sit comfortably in the 22% bracket, but a surviving spouse with $115,000 of taxable income — less income than the couple had together — can suddenly be pushed into the 24% bracket. Over 15 or 20 years, the lifetime cost can become substantial.

Medicare adds another layer. For 2026, Medicare Part B IRMAA surcharges begin when modified adjusted gross income exceeds $109,000 for an individual, versus $218,000 for a married couple filing jointly. The premium is simply higher because income now lands on the single-filer scale.

That is where many widows and widowers get blindsided. They expected grief, paperwork and adjustment. They did not expect the tax code and Medicare rules to make retirement feel financially tighter at the exact moment life became harder.

How to use a Roth conversion efficiently

If you are already widowed and reading this, the situation is not hopeless. Meaningful planning may still be available. Roth conversions during widowhood can still make sense in some cases, even inside single tax brackets, if the alternative is allowing a large traditional IRA to compound into larger future RMDs.

Qualified charitable distributions (QCDs) can become powerful after age 70½. Asset-location changes, tax-efficient withdrawal sequencing and Medicare-income management can still reduce future drag.

But if you are still married, the best planning window may be before widowhood.

For many couples, the richest tax-planning window occurs after retirement but before RMDs begin. That may be five to 10 years, or sometimes less.

The core strategy often involves multiyear Roth conversion planning while both spouses are alive and still filing jointly. The goal is not to convert blindly but to use available joint brackets intentionally, reduce future tax-deferred concentration and give the surviving spouse more tax-free flexibility later.

The math requires discipline. Each year, evaluate how much traditional IRA money can be converted without creating unnecessary tax damage. You pay tax at known joint rates today to potentially reduce larger future taxable distributions later.

Repeat the analysis annually and stop when the math no longer supports it. Document the plan clearly so the surviving spouse is not left guessing.

The long-term care effect

Long-term care can destroy the planning runway.

Consider this scenario. One spouse becomes ill. The healthy spouse becomes the caregiver. Assets may be spent faster than expected. IRA withdrawals may increase. Roth conversion planning gets delayed. Tax planning gets pushed aside because the family is dealing with doctors, facilities, medications, stress and exhaustion.

Then, after months or years of care, the healthy spouse becomes the surviving spouse and may inherit a weaker financial structure with fewer clean choices.

Wade Pfau, author of the Retirement Planning Guidebook and a professor at The American College of Financial Services, has described long-term care as one of retirement's most unpredictable risks.

The cost data explains why. CareScout's 2025 Cost of Care Survey reported national median annual costs of $74,400 for assisted living, in excess of $114,000 for a semi-private nursing home room and more than $129,000 for a private nursing home room.

Those are not just care costs; they are tax-planning costs. If the money comes from an IRA, the withdrawal may create taxable income. If that income pushes the household across Medicare thresholds, the cost can compound.

If the healthier spouse is left with fewer assets and less flexibility afterward, the widow's penalty becomes more painful.

IRAs and 401(k)s: A structural blind spot in retirement planning

IRA guru Ed Slott, founder of IRAHelp.com, has spent years warning that tax-deferred retirement money is not tax-free money. That warning becomes especially relevant here. The surviving spouse may inherit the same IRA or 401(k) balance, but under compressed single-filer brackets.

The mistake is not having an IRA or 401(k). The mistake is assuming they behave the same way after the first spouse is gone. They do not.

If you are wondering why this may not already be in your plan, the answer is not necessarily that anyone has been negligent. For three primary reasons, the widow's penalty sits in a structural blind spot across much of retirement planning.

• Many plans focus heavily on the retirement date, not the surviving-spouse phase.
• Most people do not enjoy a planning conversation that says, "Pay taxes voluntarily today to potentially reduce a larger tax problem later." Not having the conversion often feels better in April. It may feel much worse 10 years later.
• Many reviews are organized around investments, not the household tax structure after the first death.

Understand the potential stakes. The table below is only a simplified illustration. It assumes the surviving spouse retains a high percentage of joint retirement income, which can happen when income is driven by pensions, RMDs and portfolio distributions rather than mostly by Social Security.

These estimates may include federal income tax and Medicare surcharge effects. They do not include state income taxes, the net investment income tax or other household-specific factors. The point is not that every household will match the table but that the annual cost can become a six-figure lifetime issue if it persists for 10, 15 or 20 years.

A surviving-spouse tax map

Married couples with meaningful IRA balances, pensions, taxable investment income, deferred compensation or future RMD exposure should not guess. The next practical step is specific: Ask for a surviving-spouse tax map.

That map should show, in dollars, what happens to income, taxes, Medicare premiums, IRA withdrawals and cash flow after the first spouse dies.

A useful version of that analysis can often start with last year's joint 1040. Run the same income through the single-filer tax structure, compare the result and then project the difference over 10 to 20 years with RMDs, Medicare thresholds and Roth conversion options included.

If the exposure is small, you should know that. If it is large, you should know that, too, while both spouses are still here, while both can still make decisions together and while the cleanest planning years may still be available.

The window closes a little further with every tax year that passes. You should at least know what is inside it.

Dan Dunkin contributed to this article.

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

Related Content

• Avoiding the Widows' Penalty Tax Trap After a Spouse Passes
• The Financial Effects of Losing a Spouse
• Three Ways to Help Create Financial Stability for a Widow
• Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
• Your Retirement Plan Looks Watertight, But Have You Checked for Tax Leaks?

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.

Jean Chatzky is the CEO of HerMoney.com and host of the podcast HerMoney With Jean Chatzky. Here, she speaks with Kiplinger about her new book, The Forever Paycheck, and what retirees struggle with in the transition to spending.

Kiplinger: You've referred to your new book, The Forever Paycheck, as the most important work you've done in your 40-year career. Why is this book such a passion project for you?

Chatzky: The book is about how to spend down your savings once you retire — or decumulate, as experts call it — and it is not something you can afford to get wrong. If you overdo withdrawals, you'll run short of resources late in life. If you underdo them, you're essentially underliving — not getting the most out of this phase of your life that you saved so long for. I think that's incredibly sad. For me, this issue feels both urgent and important.

Why do many re­tirees struggle with the transition from saving to spending?

It's emotionally really hard, because spending from savings feels like a loss. When you put so much time into accumulating something, it feels precious. You want to hold on tight.

Tactically, we've also had a lot of help accumulating, with automatic enrollment and escalation in retirement-savings plans and target-date funds. It has become super easy to do the right thing without doing anything. Those automatic hacks don't exist yet for managing withdrawals from savings.

You think the solution lies in creating what you call a forever paycheck. How can this help retirees?

A forever paycheck is a stream of income that will last for the rest of your life, and that enables you to live comfortably without the fear you'll run out of money. The income stream ideally should be enough to cover your needs and some of your wants — the ones you really don't want to give an inch on.

It is not a solution for all of your money. Everybody still needs to have some money invested in the market to grow. But researchers have found that having a regular income stream enables you to feel much more comfortable about spending.

How do you fund a forever paycheck?

If you can afford to, waiting as long as possible to claim Social Security so you maximize benefits is typically the right move for most people. That's the base of almost everyone's forever paycheck, plus any pensions you may get.

Then look at your expenses, those necessities and wants, to figure out how much money you'll need on an ongoing basis. Deduct the income you'll get from Social Security and pensions, and what is left is your gap. You can fill that gap with guaranteed income from annuities or withdrawals from your investments.

Personally, I'm going the guaranteed route. About a third of my retirement income will come from Social Security, another third from the rest of my forever paycheck, and a third from money invested in the market for growth.

How can retirees prevent an unpredictable event such as inflation or a big drop in stock prices from derailing their plans?

The whole point of building a forever paycheck is so these events will not derail you. If you've got a paycheck that covers your needs and key wants, and the market takes a tumble, you don't have to sell. You can give the market time to come back. And maximizing Social Security is your best friend when it comes to fighting inflation because it has a cost-of-living increase that's recalculated each year.

What else do retirees get wrong when it comes to spending?

Besides underspending and not living as well as they could be because of fear, many retirees think that spending across retirement will be consistent. It's not. People spend more in the early years, when they take their bucket-list trips and do home-improvement projects. Once we get into our mid-seventies, things slow down, and we don't spend as much. That fact should give people license to spend a bit more early on.

We should also think about ways to pass money along, whether it's to children or charities, while we're living. If I die in my nineties, my kids will be in their sixties. I really hope they don't need my money by then.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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If you're aiming to retire at the standard retirement age of 65, your 50s can feel like crunch time. Whether you're falling behind or you're pretty sure you're on track, this is the decade to nail down exactly how much you need to save for the retirement lifestyle you want and exactly what it's going to take over these next 10 to 15 years to get there.

At the same time, you might be part of the sandwich generation – those who have been stretched thin by the need to take care of both their aging parents and their older children, all while still trying to keep up with their own financial goals.

Suddenly, you hit 50 and realize the runway to retirement has gotten a lot shorter and you're not sure if you're anywhere close to where you should be at this point. If that sounds familiar, this checklist should help you get back on track.

4 financial priorities for your 50s

In your 50s, you have one major financial goal: get your retirement fully funded. With a few exceptions, anything else will take a back seat for this next decade. The question is less about what your financial priorities should be and more about building a personalized plan to get you where you want to be.

1. Come up with a realistic retirement number

When you first started putting away money in your 401k or other retirement accounts, you might have had a vague sense of how much money you needed to save up for your golden years. Now that those years are moving closer, it's time to revisit your goal and, if it's not already, make it more concrete.

You'll find some rules of thumb around what percentage of your current salary you should plan to spend each year in retirement — like 70% or 80% of your pre-retirement income — in order to maintain your current lifestyle. And you might have an idea of your expected lifespan based on how long your parents or grandparents lived.

But in reality, the amount you should plan to have for retirement depends on so many different factors. Do you want to maintain your current lifestyle or do you want to do more, like travel or rent out your home and retire in an RV for a few years?

This answer can change how much you need to save. Do you have a lot put away already or have you only just started to really save seriously for retirement? This answer can change how much you can realistically save (or what age you can realistically retire). Do you want to hang up your boots right at 65 or do you plan to retire sooner (or later) than that?

The best way to find the magic number that fits your retirement goals and your current financial situation is to meet with a financial planner. More than any online calculator or broad rules of thumb, a professional financial planner can talk through your finances with you and help you create a personalized plan to get you from wherever you are today to where you want to be when you retire.

Use the Bankrate tool below to connect with a financial professional who can tailor a plan to help you reach your financial goals:

2. Start learning about social security, Medicare and other retirement benefits now

How much can you expect social security to contribute to your retirement income? How much will that number change depending on what age you begin claiming it? If you plan to, say, start a business or take a part time job to keep busy and pad your budget, how will working affect your benefits?

Navigating the paperwork and logistics of social security, Medicare or a pension (if you have one) can be complicated and you don't want to wait until you actually need that income to figure it all out. If you haven't spent much time learning about how it all works yet, here are a few resources to get you started:

• How to estimate your Social Security benefits
• How to maximize your Social Security benefits
• A guide to Medicare basics
• What is Medigap insurance and who needs it?
• How does your retirement strategy change if you will have a pension?
• What happens to your benefits and taxes if you work past retirement age?

These are all great things to discuss with a financial planner as well. But if you're not ready to work with one just yet, take advantage of all the online resources you can right now to familiarize yourself with how it all works.

3. Aim to be debt-free by retirement

If you're still wrestling with debt, the idea of putting anything extra toward retirement might seem impossible. In that situation, think of your debt payments as part of your retirement plan. If you tally up everything you're spending now on your mortgage and other debts, that's the amount you can subtract from your retirement budget – or redirect toward pursuing the hobbies and bucket list adventures you're planning to do in retirement – once you've paid it all off.

Instead of feeling like those debt payments are holding you back, know that paying that debt down is just as important for your post-retirement future as contributing to your 401k is.

4. Prioritize your health now

A healthy retirement is just as important as a fully-funded one. Not only does physical health allow you to do more in retirement, it can also be a financial boost by lowering your future medical costs.

Work with your doctor to come up with a comprehensive and personalized diet and exercise plan so you can establish the right healthy habits now to slow the progression of conditions you might already have and prevent ones you don't.

The changes you make now can have a big impact, even if you weren't keeping up with regular exercise or a healthy diet before.

What to do if you're behind on retirement savings

By 55, the typical American has just $185,000 in retirement accounts, according to the Federal Reserve. That's just over two years worth of the median income of $82,150 at that age. In other words, it's not enough to retire on. If you're in a similar situation and feel like you might never be able to retire, here are a few strategies that can help you catch up.

Max out every retirement account you can

Once you hit 50, the IRS allows you to contribute even more than the standard maximum contributions to your retirement funds. By age 60, you'll enjoy super catch-up contributions to help you reach your goals even faster. All of these give you more wiggle room to catch up on your retirement savings if your fund isn't where you want it to be right now.

Before contributing more beyond the tax-advantaged limits on your 401k and IRA, however, make sure you also contribute to your health savings account (HSA) if you have one. HSA contributions are tax-free when you contribute to the account and tax-free when you withdraw later — provided you use them for medical expenses.

By treating your HSA like an extra retirement account, you can build up a sort of separate healthcare fund so you're not tapping your main retirement savings to pay for the medical expenses that inevitably come up as you age.

Be realistic about how much financial support you can provide others

As the sandwich generation, you love your kids and your parents. If you can afford to help out financially without sacrificing your retirement, that's great. But right now, your top priority needs to be a fully funded retirement, so you may need to set some boundaries.

You can still provide support to your loved ones in other ways. For example, instead of handing your kids cash, consider letting them move back home so they can focus on saving up for their own goals without worrying about rent.

If your parents are struggling to make ends meet, you can help them navigate the paperwork and logistics of setting up the long-term care they need through Medicare or other resources rather than writing the checks yourself.

If you have debt, work on lowering your interest rates

Juggling debt and catch-up retirement savings at the same time can be exhausting and make you feel you're not really making a lot of progress on either goal. To break through that plateau feeling, one of the most accessible tricks that many people overlook is lowering your interest rates.

Every percentage you can shave off that interest rate means more of each monthly payment is paying down the actual principal instead of being eaten up by interest.

Here are a few ways to lower your interest rates:

• Ask for lower rates. Yes, you can simply call up your credit card or loan provider and ask for a lower interest rate. Your chances of a yes are better if you have a good track record of on-time payments. But it doesn't hurt to ask regardless of your payment history.
• Use 0% intro offers on credit cards. 0% introductory rates on new cards or balance transfer offers on your existing cards can be a useful way to build momentum on debt repayment. The key is limiting the amount to what you can pay off before the introductory rate expires — and making sure you don't build up new debt now that the old debt is gone.
• Tap home equity to consolidate higher interest debt. By your 50s, you may have built up a healthy amount of home equity. Often, home equity loans can come with much better interest rates than you'll find elsewhere. So, whether you're battling credit card debt or a high interest auto loan, tapping some of that equity to consolidate that into a lower interest loan can help you pay down debt faster and pay less in interest overall.

These aren't one-off tricks, either. You can repeat these strategies regularly as you chip away at your debt. When your 20% credit card debt is gone, for example, your 10% personal loan becomes the "high interest debt" that you can consolidate into either a better rate loan or a 0% introductory offer credit card.

Use the tool below, powered by Bankrate, to compare today's top home equity offers:

Consider taking a side job

If you don't think you'll get anywhere close to your retirement goal with the amount you're currently able to contribute, it might be worth taking on a flexible second job for the next few years to help you catch up. You can dump those entire paychecks into retirement savings or debt to build some strong momentum toward your financial goals.

This isn't an option for everyone. But if you're able to take on the added stress of a side job for a few years in your 50s, it might be the ticket that unlocks the retirement you've been dreaming about 10 to 15 years from now.

Create retirement back up plans

Depending on where your retirement savings are at right now, it can help to come up with a few different scenarios for what your retirement might look like. For example, maybe you don't have the savings to fully retire at 65, but you have enough to cut back to part time work at that age for a few years to finish funding your retirement.

Maybe you're only slightly behind and can pull it off if you just push your retirement age up to 67 instead of 65 — or maybe you can retire at 65, but only if you downsize your home and throw that extra equity into retirement.

There are a lot of different ways to retire, and no one size fits all. Even if your alternatives don't sound quite as ideal as the retirement you envisioned, having those back-up plans can help you breathe easier. You'll know that no matter what, you've got a plan in place.

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For many adult children, one of the hardest conversations to have is with their parents about finances.

• Do Mom and Dad have updated estate documents?
• Who would make financial or health care decisions if one of them became incapacitated?
• Where are the accounts, insurance policies, passwords and key documents?
• Have they thought about whether they want to age in place, downsize or move closer to family?
• Are they vulnerable to scams?
• Is one spouse carrying all the financial knowledge while the other remains largely uninvolved?

These are practical questions. But inside a family, they rarely feel that way.

For parents, the conversation can feel like a threat to independence. For adult children, it can feel like overstepping, prying or implying that a parent is no longer capable.

Add sibling dynamics, second marriages, privacy concerns and years of family history, and it's easy to understand why so many families avoid the conversation altogether.

The problem is that silence doesn't preserve independence. In many cases, it puts it at risk.

When families wait until a health event, cognitive issue, hospitalization, death of a spouse or financial emergency forces the conversation, decisions often must be made quickly, emotionally and with incomplete information.

Adult children might not know where assets are held, whether estate documents exist, who the attorney is, how bills are paid or what their parents wanted.

A better approach is to reframe the conversation entirely. This is not about taking control. It's about helping parents remain in control for as long as possible and making sure their wishes are known, documented and respected.

Start with values, not account balances

One of the biggest mistakes adult children make is starting with the numbers.

"How much money do you have?" or "Where are all your accounts?" might be well-intentioned, but those questions can feel invasive. A more productive entry point is to start with values, preferences and peace of mind.

For example:

• "I don't need to know every financial detail, but I want to make sure I would know how to support you if something happened."
• "If there were ever a medical emergency, I would want to be certain I was helping make decisions in the way you would want."

This shifts the tone from investigation to support. It also makes clear that the goal is not to take over, but to understand the plan.

In my experience, families make more progress when the first conversation is about wishes.

• Where do your parents want to live if their health changes?
• Who do they trust to make medical decisions? Who should be contacted first in an emergency?
• What would comfort, dignity and independence look like to them?

Those answers can open the door to the more technical planning that needs to follow.

Consider a scenario we see more often than families expect. A spouse passes away after decades of careful saving. He was an electrician who built nearly $3 million through discipline and frugality, but managed everything himself.

The surviving spouse discovers accounts scattered across multiple banks, IRAs she can't access, missing passwords and a life insurance policy with no instructions on how to claim it. She doesn't know what her income will be, how to manage the investments or even how to pay the electric bill.

He meant well. But what he intended as good stewardship became an avoidable burden for the person he loved most.

That is what this conversation is really about.

Make the conversation smaller

Another common mistake is trying to solve everything at once.

Aging, estate planning, long-term care, digital access, beneficiary designations, powers of attorney and family roles are too much for one discussion. When adult children try to cover every topic in a single sitting, parents can feel overwhelmed or defensive.

Instead, think of this as a series of smaller conversations.

• "Do you have the right documents in place, and does someone know where they are?"
• "Have you thought about where you would want to live if staying in the house became difficult?"
• "Would you be comfortable introducing me to your adviser, attorney or accountant so I know who to call in an emergency?"

Smaller conversations reduce pressure. They also make the topic feel like part of normal family life rather than a one-time intervention.

Focus on organization before decision-making

Many families don't realize how much stress can be avoided simply by getting organized.

At a minimum, every aging parent should consider creating a central financial life organizer. This doesn't have to include every dollar amount, but it should tell trusted family members where to find essential information if needed.

That might include:

• A list of financial institutions and account types
• Retirement accounts, pensions and Social Security information
• Insurance policies, including life, home auto and long-term care
• The location of wills, trusts, powers of attorney and health care directives
• Names and contact information for the financial adviser, CPA, estate attorney and insurance professionals
• Mortgage, property tax, utility and recurring bill information
• Beneficiary designations and trusted contacts
• Key digital accounts and legacy access instructions

This kind of organization can be especially important when one spouse has historically managed the household finances. The surviving spouse might be fully capable, but if he or she does not know where things are, who to call or how bills are paid, the transition can become unnecessarily stressful.

A financial life organizer isn't just an administrative tool. It's a gift to the people who might one day have to step in.

Be careful with the word 'help'

Adult children often say, "I just want to help." Parents often hear, "You think I can't handle this anymore."

That disconnect can derail an otherwise important conversation. A better approach is to ask permission.

• "Would it be helpful if we sat down together and made sure everything is organized?"
• "Would you be open to walking me through who I should contact if there were ever an emergency?"
• "Would it give you peace of mind if we made sure your documents and beneficiaries still reflect your wishes?"

The difference is subtle but important. Asking permission preserves dignity. It allows parents to remain the decision-makers.

Bring in the right professionals

Some families are comfortable having these conversations on their own. Others benefit from involving a neutral professional.

A financial adviser, estate attorney, elder law attorney, CPA or geriatric care manager can help separate the emotional family dynamics from the technical planning. They can also help identify gaps that family members might not know to look for.

For example, an estate plan might exist, but beneficiary designations on retirement accounts or life insurance policies may be outdated.

A parent could have a power of attorney, but the named agent might no longer be the right person.

A parent might want to age in place, but the home could need modifications, additional support or a plan to fund future care.

The right professional team can help families move from vague concern to specific action.

Don't ignore fraud and exploitation

Another reason these conversations matter is financial safety.

Older adults are frequent targets for scams involving fake government agencies, tech support schemes, romance scams, grandparent scams and urgent requests for money. The most dangerous scams often involve fear, secrecy and pressure to act immediately.

Families can create a simple rule: No major financial decision, wire transfer, unusual payment or urgent request should be acted on without first speaking to a trusted family member or adviser.

That rule can prevent significant financial harm.

Keep the conversation going

The goal is not to have one perfect conversation; it's to normalize the topic.

Plans change. Health changes. Laws change. Family dynamics change. Documents that were appropriate five years ago might no longer reflect a parent's wishes today.

A brief annual family check-in can help keep everyone aligned. It doesn't need to be formal, and it does not require parents to disclose every financial detail. But it should confirm that key documents are current, trusted contacts are still appropriate, family members know who to call, and parents' wishes are understood.

The families that navigate aging and wealth transitions best are not the ones that avoid hard conversations. They're the ones that learn how to have them with respect, patience and love.

Talking to parents about money doesn't have to mean taking away their independence. Done well, it can do the opposite, preserving their voice, protecting their dignity and giving the entire family greater confidence about the road ahead.

Please see important disclosure information at opalwealthadvisors.com/disclosure.

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

Medicare premiums are set to rise again for 2027. The latest Social Security and Medicare Trustees Report (page 207) estimates that Part B premiums will climb 3.5% in 2027, reaching $209.50 per month, up $6.60 from 2026. While another price hike is never good news for retirees, the increase is a relief compared to the almost 10% spike experienced in 2026.

Unlike Part B, Medicare Part D is sold through private insurance companies, either as a standalone drug plan alongside traditional Medicare or as part of a Medicare Advantage policy.

Because individual plan costs vary, the average premium enrollees pay is typically lower than the base beneficiary premium. According to the latest Trustees Report, the Part D base premium is projected to reach $41.33 per month in 2027.

Medicare Part B premiums in 2027

Medicare Part B pays for doctor visits, outpatient care and some home healthcare. When enrolled, you pay both a deductible and a monthly premium. For 2027, the premium is currently projected to rise 3.5% to $209.50, up $6.60 from $202.90 in 2025.

The Part B deductible is projected to reach $292 in 2027, a $9.00 increase from $283.00 in the previous year. On a percentage basis, it's an increase of 3.2%, in line with the estimated increase of the Part B premium.

The projected Part B increase impact on Social Security benefits

The 2027 Social Security COLA is projected to rise 3.8%, after accounting for the June CPI. In terms of dollars, if implemented now, that would translate into an increase of $79.14 per month or $949.68 per year, when using the average Social Security check amount for May 2026 ($2,082.76) as the base amount.

The Social Security Administration (SSA) automatically deducts the Part B premium cost from the Social Security benefits of most Medicare recipients. For 2027, the average Social Security check would fall from $79.14 to $72.54, subtracting the projected Part B increase ($6.60) from the projected COLA raise (79.14). In that scenario, the Part B increase would consume approximately 8.3% of the monthly increase.

Understanding Medicare Part D premiums

Unlike Part B, there isn't a single "standard" Part D premium, as it varies by plan. The Centers for Medicare & Medicaid Services (CMS) establishes a standardized base premium amount used to calculate late enrollment penalties and to determine Part D IRMAA surcharges. For 2027, the base premium is $41.33.

Most final premium and deductible amounts won't be announced until late October or early November; however, most of the Part D amounts have been finalized.

Annual deductible: The standard Part D deductible will increase to $700 in 2027, up from $615 in 2026. That's a steeper increase than in 2026, when the deductible rose to $615 from $590 in 2025, a $25 increase.

Out-of-pocket spending cap: On a positive note for 2027, Medicare Part D's annual out-of-pocket prescription cap will rise to $2,400, up $300 from the $2,100 limit in 2026. Once beneficiaries reach this cap, they no longer pay out-of-pocket costs for covered prescription drugs for the rest of the year.

Premium protections and stabilization: To shield enrollees from steep rate hikes, the premium stabilization provision of the Inflation Reduction Act (IRA) caps annual base beneficiary premium (BBP) growth at 6% yearly through 2029, while limiting how much extra cost plan sponsors can pass along.

While an IRA demonstration program previously stabilized average monthly premiums, CMS scaled back that support in 2026, stating in a memo that reducing federal subsidies is meant to help the Part D program "return to operating under regular market conditions."

Full table

Below you will find the projected deductible, premiums and coinsurance amounts for Part A and Part B. The Part D amounts are final.

*The 2027 Part D base premium, deductible and maximum out-of-pocket limit have been finalized. These numbers are not estimates.

The value of tracking the projected premiums

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

To get the most from your plan, it’s important to understand your out-of-pocket costs for premiums, which will vary depending on your plan and income. For instance, you could also owe a monthly surcharge on Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA).

Your IRMAA liability for 2027 will be based on the MAGI shown on your 2025 return. While you can't do anything to change your 2025 tax return, you can look over your finances to see if you are in danger of paying the IRMAA in 2028, which will be based on your yet-to-be-filed 2026 tax return.

Income planning can go a long way in limiting your exposure to the surcharge. For instance, a well-timed Roth conversion can reduce your taxable income and eliminate required minimum distributions (RMDs).

Projections for Medicare Part B 2026 are primarily derived from the annual Medicare Trustees Report. While the final figures are usually announced by CMS in November of the preceding year (so, November 2026 for 2027 premiums), the Trustees Report provides strong estimates. The Part D base premium, deductible and out-of-pocket maximum for 2027 have been finalized and are reflected in our tables.

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Whenever I meet with new investors, one of their first questions is, "What are your fees?"

While this might seem like a natural question, it's often misguided and asked too early in the process. Before you ask about an adviser's fees, you should first want to know what services they can provide.

When I was in college, I ran a house-painting franchise. Every spring, homeowners would collect bids and try to decide who to hire. This is when I discovered that a price is comparable only after you define the job.

One painting crew might scrape, sand, prime, caulk, protect landscaping and do two coats, with a written warranty. Another might spray on a quick coat and disappear.

If all customers did was compare two quotes that were only a couple of hundred dollars apart, they weren't comparing value; they were merely comparing the costs of vastly differing services.

Choosing an investment professional works the same way. As one SEC article notes, "Just as a grocery store offers more products than a convenience store, some investment professionals offer a wide range of products or services, while others offer a more limited selection."

The key is to work with one that fits you well and can deliver advice specific to your needs and wants.

So instead of leading with a question about fees, here's the sequence that makes fees meaningful and helps you avoid paying for the wrong thing.

1. Name the job

One of the biggest mistakes people make when seeking financial advice is failing to clearly define what they need.

When I ask someone what they want from an adviser, the answer is often something vague like "to do better," "to get the highest rate of return" or "to make sure I'm on track for retirement." Those are ambiguous goals, not a clear job description.

Before you compare advisers, decide what problem you want solved. Do you need:

• A one-time second opinion?
• A written, comprehensive and holistic financial plan that connects retirement income, taxes and investments?
• Ongoing portfolio management?
• A "quarterback" relationship where one adviser helps coordinate investing, tax strategy and estate planning?

2. Understand what the adviser does for you

If you walk into a meeting and ask an adviser, "What are your fees?" and they say, "1%," what exactly does that number mean? What will you compare it to? Another adviser might also say 1%, but the two of them could provide completely different services.

One might be building a comprehensive, written retirement plan, coordinating tax strategies, helping with estate considerations and managing your investments. Another might simply be recommending funds from a menu their company provides.

The price might be identical, but the work behind it could be completely different. The depth and breadth of each adviser's capabilities would, in many cases, yield vastly disparate results.

If you only compare the cost, you may think you are comparing identical services when you are not. That is why the better question early in the conversation is not, "What do you charge?" but, "What exactly do you do for clients like me?"

Once you understand the services, the process and the expertise being offered, the fee discussion finally has context. And that is when you can decide whether the price is fair for the value being provided.

3. Determine adviser licensing, designations and background

Knowing what licensing and certifications your prospective adviser carries is critical to differentiating between professionals you may wish to engage. A narrow range of licensing may indicate both limited experience and limited access to industry products, services or strategies.

Also, certifications, such as the CERTIFIED FINANCIAL PLANNER® designation, may indicate the extent of training, depth and professional standards your practitioner brings to the table.

This can come into play when you notice an adviser does not use or recommend (or even denounces) certain financial instruments, which they are also conveniently not licensed to recommend or provide.

Unless you are aware of their licensing and certification, or even company affiliation, you may not be able to determine whether the advice you are seeking may have significant limitations.

The SEC's Investor Bulletin on using Investor.gov's Investment Professional Search tool suggests always researching an investment professional, including confirming registration and checking for disciplinary events, before deciding to work with them.

If your professional is licensed in the brokerage business, you can also use FINRA BrokerCheck. It's a free tool to research the professional backgrounds of investment professionals and firms.

You're not hunting for "gotchas." You're looking for patterns — repeat customer complaints, repeated job-hopping or disclosures that don't match the story you're being told. If you find something you are curious about, make sure you ask the adviser about it.

Ask for the documents that put fees and any conflicts of interest in writing. If an adviser is truly transparent, they'll gladly show you the paperwork that regulators care about.

If you'd like a ready-made interview script, the SEC's "Questions to Ask when Hiring an Investment Professional" bulletin includes practical questions that turn fuzzy conversations into measurable answers.

4. Now talk fees

Only after you've defined the scope and read the disclosures does "What are your fees?" become a useful question.

Since fees that look small can still have a major impact over time, ask what you will pay in year one and what you'll pay in a typical ongoing year.

Then ask what you can expect for those dollars, such as meeting cadence, written deliverables, tax coordination, rebalancing discipline and how recommendations will be documented.

Making better decisions

The real goal isn't simply to find the lowest fee. It's to find the right experience, the right process and the right fit for the problem you're trying to solve.

Once you know the job, understand the services and confirm the credentials, the conversation about price finally becomes meaningful.

When you follow this order, you don't just get clearer answers about fees. You make better decisions about the advice itself, and that's what ultimately protects your money and gives you clarity about your financial future.

Ezra Byer contributed to this article.

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

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

For many Americans, there's a disconnect between what's happening on Wall Street and how they're feeling about their personal finances.

The markets have remained resilient despite periods of volatility. But many people nearing retirement are worried about whether their money will last.

Much of that anxiety stems from inflation, which, for the first time in three years, is now outpacing wages.

That's why retirement planning shouldn't focus on cutting expenses, but rather on building a flexible income plan that can absorb higher costs over time.

Start with net income, not gross salary

Most people think they need to replace their full working salary when they retire. That's not necessarily true.

It's not just about replacing a paycheck. You need to replace the net income that supports your life today while accounting for some expenses that may go away or change in the future.

Instead of gross salary, start with your current net income. This will help you determine what you spend. Add up how much money is coming in each month and compare that to how much is going out.

Once you know what your income needs are, you can determine whether your current assets are enough, whether your retirement timeline needs to shift or whether your investment strategy should be adjusted.

Add a lifestyle and inflation cushion

One of the most overlooked tools to help combat inflation in retirement is the travel budget. Most retirees spend more on travel during the first part of their retirement and then gradually reduce that spending, whether that's owing to poorer health or simply wanting to spend more time around family.

Instead of viewing travel as a temporary expense, think of it as a built-in financial cushion for your retirement. An amount as small as 10% can provide flexibility if inflation rises faster than expected.

While that money may go toward dream vacations, new hobbies and experiences early in retirement, later on, those same dollars can be reallocated toward healthcare costs or other expenses.

Retirement spending categories shift rather than disappear. Because you know the money is there, the travel budget becomes less about leisure and more about being the buffer you need to feel confident in your plan.

A built-in buffer also helps retirees avoid overreacting to temporary market drops or cost increases.

Build the income plan around the gap

Retirement planning isn't only about how much you have saved in your portfolio. $1 million may be more than enough for one retiree but not enough for another. Your retirement depends on spending needs, income sources and your unique timeline.

Once you calculate your expected spending and account for guaranteed income sources such as Social Security or pensions, you can then identify the investment gap.

Your investment decisions should support your income needs. The strategy should be based on what you need your money to accomplish.

While some people may find out they need to work a few more years, many of the people we work with at Blue Ridge Wealth Planners are actually surprised to learn they may be able to retire sooner than expected. Income planning helps you make retirement decisions based on facts, not fear.

In conclusion

Unfortunately, inflation isn't something that you can avoid. It's always going to be a factor that you must account for when planning your retirement, but you don't have to let it eat away at your hard-earned savings. Remember:

• Inflation-proofing your retirement isn't just about investment returns
• It starts with realistic income planning and creating built-in cushions
• You then identify income shortfalls and fill in the gaps

Retirees who create room in their plan through travel budgets or spending cushions are often better positioned to handle rising costs. They can then enjoy a fulfilling and financially confident retirement.

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

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: At 49, I have more retirement savings than I ever imagined. My IRA is worth almost $2 million, and I inherited my house, so there’s no mortgage. It’s worth almost $1 million, so the taxes on it are high. I also have $300K in investments outside of my IRA and a six-month emergency fund.

I’m burned out and want to take a sabbatical, which my company will not support. I would have to quit and start over. I want to spend the time traveling and seeing old friends. I have several living in Europe with whom I can stay .

I'm single, no kids, no pets. I'd use the $300K investment account and emergency fund to pay my bills while not working. I want to take a break of six months to a year. My usual expenses are about $100K a year and I make $200K, so I save a lot of my income. I'll be spending more while out of work to pay for travel and health insurance.

I’m not really worried about affording the sabbatical so much as what happens next. If I can’t get back to a big salary, do I have enough in my IRA on which to retire? Is there anything I’m missing in my sabbatical plan? — Wealthy But Weary

Dear Wealthy But Weary: When you've been working hard for more than two decades, there might come a point when you feel you need a break — and not just a long vacation, but a months-long period to recharge, pursue hobbies, and take time for yourself.

Here, we have a 49-year-old reader in great financial shape, set on taking a sabbatical, even knowing it will mean starting a job search from scratch when returning. Let's see what our experts have to say about this plan, and what tweaks they might recommend.

You can probably swing the time off, but make sure to fund it the right way

Many people in their late 40s are scrambling to catch up on retirement savings. With an IRA worth close to $2 million, our reader is in the opposite boat. Between that and their $300,000 portfolio, they're in a strong position to take an extended break, says Rob Burnette, investment adviser representative and professional tax preparer at Outlook Financial Center.

"For the short term, you certainly have sufficient funds for a one-year sabbatical. Using your non-IRA investment account for living expenses is very tax-efficient and doesn’t run afoul of early distribution penalties on your IRA," he says.

However, Burnette cautions, "I would try to keep your emergency fund intact for its purpose — emergencies."

Trevor Houston, CEO at ClearPath Wealth Strategies, agrees.

"My advice is to set up a separate savings account dedicated to covering expenses during an intentional career break. Don't start raiding retirement accounts or building debt. This fund should be separate from the emergency fund. A planned career break is not an emergency," he says.

Houston also emphasizes the importance of planning for extra costs during a workforce break.

"The biggest mistake I see people make when planning a career sabbatical is assuming they only need to replace their regular paycheck," he says. "Unfortunately, things like health insurance, taxes, inflation … can end up totaling more than people may expect."

Before moving forward with a sabbatical, Houston recommends mapping out the costs, including surprise expenses that may arise, like home repairs. If your budget can support unplanned costs, you should be in good shape.

Speaking of home repairs, Mike Dunlop, CFP and co-founder at Ignite Financial, says that as a homeowner, you have an opportunity to help fund your sabbatical without raiding your investment account too heavily.

"I'd also at least have them look at that $1 million paid-off house sitting empty with a big property tax bill while they're in Europe. Renting it out might cover a good chunk of the trip," he says.

The only catch? Rental income will boost your modified adjusted gross income (MAGI), which could bump up your premiums for marketplace healthcare.

Your sabbatical year could be a good tax-planning opportunity

Giving up your paycheck for a year might be daunting, but it could serve as an opportunity to make a smart long-term tax-planning decision.

"While you have a large IRA, that is also a tax bomb that will go off when you do draw funds from it in retirement. For full tax diversity, you need to add a Roth IRA to your mix so that you have everything covered," Burnette explains.

"During the year on sabbatical," he continues, "you could look at doing some Roth conversions on your IRA while you aren’t drawing a large salary. The Roth conversion would certainly improve the status of making your $2 million in retirement assets go further when you finally retire."

Dunlop agrees that a Roth conversion could be a smart move during a planned sabbatical. But he also cautions that a conversion could lead to higher health insurance costs.

"I'd want them watching the health insurance piece, because ACA coverage can be cheap when income's low," he says. "But a Roth conversion bumps that income up and can shrink the subsidy, so those two levers work against each other."

Make sure you have a re-entry strategy

If you take a sabbatical at 49 and return to the workforce at 50, you might not be nearly ready to retire. Houston says it's important to plan for a re-entry that could take more time than anticipated.

"What happens if it takes longer than you expect, and your sabbatical savings are gone? What's happening in your industry? How might you need to adjust your career plans?" Houston says.

Dunlop says that at your age, there's some risk of age discrimination.

"The over-50 job market is real, and I won't pretend otherwise," he says.

However, Dunlop insists you have one thing going for you: You don't necessarily need to replace your $200,000 salary if you only spend $100,000 a year and have a robust IRA to fall back on. Trying to find a job is less scary when you can accept a lower number.

"The next job really only has to cover what they actually spend," Dunlop insists. "When you don't need the paycheck, you can usually interview better and hold out for something you actually want."

Enjoy your time off

There you have it. Our three experts agree that you're in a great position to take a much-deserved sabbatical. Even if you get a lower-paying job upon your return, you've built up a large enough IRA balance that you can let that money sit and grow until retirement age and still have more than enough.

If you want to approach that career break with even more confidence, it could pay to consult a professional.

"This would be a great conversation to have with a financial planner will look at all aspects of your financial situation," Burnette says.

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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When planning for retirement, state taxes on your 401(k), pension, and Social Security benefits should be part of your strategy.

Yet while some states offer no retirement taxes on any of these sources, a zero-percent tax rate can lose its shine if you can't get a doctor's appointment when you need one.

After all, an average 65-year-old retiring in 2026 can reportedly expect to spend $185,500 on healthcare and medical expenses throughout retirement. And living comfortably on a fixed income requires balancing healthcare costs with other top retiree concerns, like housing and daily living expenses.

To help you navigate this balancing act, we cross-referenced states that don't tax retirement income against property tax data, cost-of-living metrics, and senior healthcare rankings. The final list highlights the five most tax-friendly states for retirees, ranked by the quality and accessibility of their older-adult healthcare.

How we ranked these retirement states

Our list draws from Kiplinger's analysis of states that do not tax retirement income. Among the 13 states meeting that baseline, we filtered for the ten with the lowest median property taxes paid on mortgage homes (using PropertyShark data referenced from the latest U.S. Census Bureau data points).

Cost-of-living data was drawn from the Missouri Economic Research and Information Center (MERIC) index, where a score of 100 represents the national average.

Then, states were ranked using the United Health Foundation's "America's Health Rankings Senior Report," specifically focusing on "Clinical Care for Seniors." This metric evaluates:

• Healthcare access: Including availability of dedicated primary care providers, home health aides, and care affordability.
• Clinical services: Including rates of routine cancer screenings, avoided care rates due to high costs, and flu and pneumonia vaccinations.
• Quality of care: Including hospice care usage, nursing home quality ratings, and preventable hospitalization stays (per Medicare beneficiaries aged 65 to 74).

Scores range around a national benchmark of 0.00. Positive scores indicate above-average healthcare performance, while negative scores reflect below-average metrics. However, it's important to note that these scores are statewide averages and are not indicative of any one area within a specific state.

This list evaluates state income tax only. Federal income taxes still apply. Consult with a qualified tax professional when necessary.

1. Washington: Outstanding healthcare, higher cost of living

Senior healthcare ranking: +0.528 (Top 10 nationwide)

Median property taxes paid: $4,556

Cost-of-living score: 114.6 (14.6% above national average)

Washington takes the top spot on our list. The Evergreen State exempts all retirement income from state tax, meaning your Social Security, pensions, 401(k)s, and IRAs remain untouched by local authorities.

Another retiree benefit is its healthcare system. With a score of +0.528, per the Clinical Care report, Washington's medical care for older adults is above average, placing it in the top 20% of all states nationwide, just behind Colorado.

Yet everyday affordability remains an issue.

• Washington's median annual property tax bill exceeds $4,500, and overall living expenses — like groceries and housing costs — run roughly 14.6% higher than the national average.
• Plus, Washington recently approved an increased capital gains tax structure ranging from 7% to 9.9% on certain high-value investments, which can make the state more expensive for higher-wealth individuals.

But if you're retired and can comfortably afford the often higher price tag of Pacific Northwest living, Washington delivers an ideal combination of state retirement tax income exemptions and top-tier healthcare.

Related: 10 Cheapest Places to Live in Washington

2. Pennsylvania: Strong healthcare and moderate living costs

Senior healthcare ranking: +0.320 (#16 nationwide)

Median property taxes paid: $3,311

Cost-of-living score: 96.2 (3.8% below national average)

Pennsylvania slides into second on our list. The Keystone State exempts retirement income from state tax, including Social Security, pension payouts, and 401(k) or IRA distributions.

Senior healthcare access also remains strong here. With a score of +0.320, older adults may expect high-quality medical care, placing the state in the top 32% nationwide, according to data from the United Health Foundation. Plus, the average cost of living sits nearly 4% below the national average.

• But while retirement income is exempt from state taxes, all other income sources (like interest and dividends) are subject to a flat 3.07% state income tax.
• Additionally, the median property tax bill, while lower than Washington, remains 11% above the national average according to data from PropertyShark.

For retirees, Pennsylvania may offer a more balanced financial profile than higher-tax northeastern neighbors, like New York. However, elevated property tax bills can be difficult on a fixed income.

3. Iowa: Affordable living with above-average care

Senior healthcare ranking: +0.185 (#21 nationwide)

Median property taxes paid: $2,897

Cost-of-living score: 88.6 (11.4% below national average)

Iowa may be a true hidden gem for budget-conscious retirees. The state exempts retirement income from state taxes for residents aged 55 and older, meaning you don't have to wait long before you get state income tax relief.

On top of that tax exemption, Iowa boasts the lowest property tax bill among our top three states on this list, at just under $2,900. This is right below the national average, according to the U.S. Census Bureau, and the savings don't stop there. The Hawkeye State's cost of living is more than 11% below the national average, according to MERIC.

And perhaps more importantly, low cost doesn't automatically mean low healthcare quality, either. Iowa's senior healthcare ranking sits in the top 42% of the nation (ranking 21st overall in the Clinical Care United Health report), supported by lower rates of preventable hospitalizations.

• While Iowa ranks high nationally for average senior clinical care, its rural geography can create more care disparities for some areas than in, say, Washington or Pennsylvania.
• Plus, if you're used to a top #20 state for prime medical care, Iowa falls just short of that in the Clinical Care report.

Yet for fixed-income retirees seeking a balance of affordability and dependable healthcare (at least in more urban areas), Iowa may be considered a standout choice among tax-friendly states.

4. Florida: Low taxes, but rising costs and healthcare strain

Senior healthcare ranking: -0.103 (#31 nationwide)

Median property taxes paid: $2,730

Cost-of-living score: 100.7 (0.7% above national average)

Florida remains a classic choice for retirement because it levies no state income tax at all, protecting not just retirement distributions but also interest and dividends (and who doesn't love the weather?).

However, the Sunshine State's significant influx of retirees in recent years has created new friction points.

• Rapid population growth stretches the doctor-to-patient ratio, lowering Florida's senior healthcare access score to slightly below the national benchmark, according to the United Health Foundation.
• Additionally, rising housing expenses and skyrocketing home insurance rates have pushed Florida's overall cost of living slightly above the national average, according to MERIC.

So while Florida remains viable, a 2026 retirement plan in the Sunshine State might mean preparing for higher everyday expenses and longer waits for medical specialists than in previous decades.

Related: 10 Cheapest Places to Live in Florida

5. South Dakota: Maximum tax relief, lower healthcare access

Senior healthcare ranking: -0.263 (#35 nationwide)

Median property taxes paid: $2,724

Cost-of-living score: 94.1 (5.9% below national average)

Like Florida, South Dakota levies no state income tax on personal income (though its cold weather stands in sharp contrast to the Sunshine State).

South Dakota also has the lowest median property tax bill on this list, per U.S. Census Bureau data, and a cost of living roughly 6% below the national average.

One drawback for seniors requiring medical care in the Mount Rushmore State is medical availability, per the Clinical Care report.

• South Dakota ranks 35th in older adult clinical care, with a score below the national average.
• Rural geography and fewer medical centers mean accessing specialized care can require travel.

But if your primary goal in retirement is stretching your dollars as far as possible and you are comfortable with traveling for specialty care, South Dakota may offer your retirement nest egg significant financial benefits.

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Each April, Americans, or someone they hire, work through income tax forms, fill in totals from their financial records and send the results to the IRS.

The goal is usually simple: Pay as little to the federal government as legally possible so you can keep more of your hard-earned money.

But what if paying more in taxes today could leave you with more money tomorrow? What if voluntarily paying additional taxes now could reduce the amount you and your family pay over your lifetime?

Opportunities like these are rarely discovered while filling out tax forms in April. Effective tax planning must be part of a broader retirement strategy that considers income sources, future tax rates, healthcare costs, estate planning goals and the rules governing retirement accounts.

Many people use Roth conversions to reduce their lifetime tax burden. While the objective is often to pay less tax over the long run, the process often results in paying more tax in the short run, but that may be exactly what your long-term financial plan needs.

In other words, you intentionally elect to pay more tax today in exchange for the potential of a smaller tax bill later.

When implemented correctly, a Roth conversion allows you to pay taxes on your terms, at a rate you find acceptable, rather than taking a chance on future tax laws and rates at a time of the IRS' choosing. If implemented incorrectly, however, it may cost you more than you expected.

The silent partner

Imagine going into a business partnership where you provide all the capital, do all the work, take all the risk and spend years building something valuable. Then, when the time finally comes to enjoy the rewards, your partner suddenly appears and tells you how much of the business belongs to them.

No rational person would willingly enter into that kind of arrangement. Yet people all across America do something very similar through tax-deferred retirement accounts.

They contribute the money. They assume the investment risk. They watch their balance climb over decades and mentally count that balance as part of their retirement nest egg. The problem is that they don't know how much belongs to them until they begin taking withdrawals. At that moment, the IRS steps in and determines how much it gets to keep.

This is where a Roth account comes into the picture. Money placed in a Roth account grows tax-free, and qualified withdrawals in retirement are generally free from federal income tax because the taxes were paid before the money entered the account.

Many investors consider converting a portion of their tax-deferred accounts into a Roth account. The process is relatively straightforward: Money is transferred from a tax-deferred account into a Roth account.

However, when you make the conversion, you must pay income tax on the amount being converted.

At first glance, that may sound counterproductive. Why would anyone voluntarily create a larger tax bill? The answer is simple: You may be exchanging a known tax bill today for a potentially larger and less predictable tax bill in the future.

Roth assets can also create meaningful tax advantages for beneficiaries who may inherit those accounts.

When should you convert?

While Roth conversions may benefit many people preparing for retirement, it is not always advisable to convert all of the funds held in tax-deferred accounts. Maintaining tax diversification can be just as important as maintaining a diversified investment portfolio, yet it is often overlooked in traditional retirement planning.

Using the tax code efficiently later in life may require a blend of income sources, including taxable income, long-term capital gains, dividend income and Roth income.

I have seen situations where aggressively converting every available dollar to a Roth account has cost a retired couple nearly as much as if they had never converted at all. They lost opportunities to strategically fill lower tax brackets later in retirement and paid substantially more than necessary.

This highlights an important point: A Roth conversion is not the goal. The goal is to create the most efficient retirement income strategy possible. The rules surrounding Roth conversions can be complex, but the decision should be evaluated within the context of your overall retirement strategy.

At R.D. Smothers (RDS) Wealth, we encourage clients to begin by estimating their expected income for the year and determining how much room they have available within their current tax bracket.

Lower-income years can present some of the best opportunities for Roth conversions because they allow you to convert more assets while potentially remaining in a favorable tax bracket.

Taxes are only one piece of the equation. A well-designed Roth conversion strategy should also account for Medicare premium surcharges, commonly known as IRMAA, future healthcare expenses, estate planning objectives and the income needs of both you and your beneficiaries.

How much should you convert? Understanding the tax fountain and your 'Opportunity Zone'

This brings me to an important point about understanding your own unique relationship with the tax code. After all, the tax code is how your silent partner ultimately determines how much of your money you get to keep and how much they get to take.

Many retirees spend decades building wealth without fully understanding how that partnership works. Failing to understand the tax code will likely cost you at some point in retirement, whether through unnecessary taxes, Medicare surcharges, inefficient withdrawals or missed planning opportunities.

What makes this even more challenging is that the tax code you retire under may not be the same tax code you die under. I often tell clients that the tax code is written in pencil, not ink. Congress can change it, modify it or rewrite portions of it at any time. That's why successful tax planning requires ongoing adjustments as your circumstances and the tax laws evolve.

If you want to use Roth conversions to help manage your future tax burden, understanding tax brackets is essential. Before you can determine whether a Roth conversion makes sense, you need to understand how much of a conversion may be appropriate.

At RDS Wealth, we often refer to this as identifying your "Opportunity Zone." This is the portion of the tax code where additional income can potentially be recognized at rates that may be favorable relative to what you might pay in the future.

The U.S. tax code contains seven federal income tax brackets, ranging from 10% to 37%. Many people assume that if they fall into the 22% tax bracket, all of their income is taxed at 22%. That's not the case. Each bracket applies only to a specific portion of your income.

For example, in 2026, a married couple filing jointly receives a standard deduction of $32,200. Let's say the same couple has a gross income of $165,000 and no other deductions or credits. Their taxable income would be $132,800. They are squarely in the 22% tax bracket, but they will not pay 22% federal income tax on all of their money.

They will pay 22% federal income tax on only about $32,000 of their taxable income. When we look at this through the lens of Roth conversion planning, something interesting begins to emerge.

One way to grasp how the brackets work is to imagine them as a multitiered fountain. Each year, you pour all of your income into the top of the fountain.

The first tier to fill is the deduction bucket. No tax is paid on any income that lands in this bucket. Once that bucket is full, income spills into the 10% tier. Every dollar that lands there is taxed at 10%. The water then overflows into the 12% tier, then the 22% tier and eventually into higher tiers as more income is added.

In the example of the married couple earning $165,000, their income fills the lower tiers and then partially fills the 22% tier. Because they have not yet reached the top of that bracket, a portion of the 22% tier remains empty.

The empty space remaining in that tier is what we call the Opportunity Zone. It's the amount of income you may be able to recognize before spilling over into the next tax bracket.

In this example, the Opportunity Zone represents more than $78,000 of available space. That doesn't mean this couple should convert the entire amount, but it does mean they have room available to recognize additional income at a known tax rate rather than waiting until later when tax rates may be higher.

This is where Roth conversion planning becomes so powerful. If appropriate for your situation, you may be able to convert enough money to fill the remainder of that tier without spilling into the next bracket.

In doing so, you knowingly pay tax on those dollars today, move them into a Roth account and potentially allow future growth to occur in a tax-free environment.

The fact that you paid tax on the conversion means your tax bill may be higher this year than it otherwise would have been. However, if executed properly, that higher tax bill today may result in substantially lower taxes over the lifetime of the account.

Again, the goal of a Roth conversion is to pay a known and acceptable rate of tax while strategically reducing the future claim your silent partner has on your retirement assets.

The goal is not to eliminate taxes. The goal is to choose when you pay them. The families who often benefit most from Roth conversions are those who proactively manage their tax brackets rather than allowing future tax laws and required distributions to blindly manage it for them.

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.

Members of Generation X grew up navigating the challenges of such video games as Pac-Man, taking care of themselves after school and riding bikes without a helmet.

Today, as they approach retirement, one of their most profound challenges will be ensuring they have enough money to see them through their later years.

Born from 1965 to 1980, Gen X is now in its peak retirement-planning years.

With retirement on the horizon, many are confronting complex questions about financial security and how to make their savings last.

If the U.S. is to avoid a widening of the retirement savings gap beyond its current estimated size of $7 trillion, it's imperative that the next cohort of retirees is better positioned to achieve long-term financial security.

Unlike the baby boomer generation, most Gen X workers have spent their careers without access to traditional defined benefit-pension plans. Instead, they've relied primarily on 401(k) defined-contribution plans.

At the same time, many are also facing major financial headwinds, including rising housing and education costs, as well as dual caregiving responsibilities for both their children and aging parents.

As a result, many members of Generation X report either insufficient savings or low confidence in their ability to make their savings last.

An opportunity for financial pros

This shift presents a significant opportunity for financial professionals. While baby boomers have been much of the industry's focus, Generation X has now entered a pivotal stage of retirement preparation.

The need for help is undeniable. About 37% of Generation X have either postponed, or are contemplating postponing, their retirement due to financial concerns, compared to 19% of boomers.

Meanwhile, nearly 20% of Americans age 65 and older remain employed — up from 11% in 1987. As Gen X progresses toward traditional retirement age, financial pressures might further expand the proportion of older Americans remaining in the workforce.

Generation X faces tough decisions about how to manage asset decumulation. While defined-contribution and IRA plans serve as effective accumulation vehicles, they're limited in their ability to convert savings into guaranteed income streams.

Annuities address this challenge by turning a sum of money into predictable payments that one can't outlive.

In addition, anticipated intergenerational wealth transfers from boomer parents might increase demand for structured income solutions, if it fits the goals of the Gen X recipient.

The fragile decade is coming

Many Generation X individuals are still years from retirement and haven't planned for comprehensive income strategies. This presents both a challenge and an opportunity for the retirement and annuity industry.

Historically, annuities are most commonly purchased by individuals age 55 to 70. Today, the oldest members of Gen X are around 60, while the youngest are now 45.

As more enter the "fragile decade" — the five years before and after retirement, the period when market volatility can severely impact long-term financial security — the importance of downside protection and income certainty becomes more pronounced.

According to trade association LIMRA, 69% of surveyed Gen X respondents indicated they would prefer an annuity over investing a $100,000 inheritance in the stock market. And 37% said they would be "most interested" in purchasing an annuity, compared with 21% of boomers.

However, 64% of respondents find annuities the hardest product to understand. This suggests a clear need for improved education and transparent communication.

While annuities are one tool in the retirement toolkit, albeit a useful one, there are several areas that Gen Xers should understand before incorporating them into their plans.

Chief among these should be understanding how the contract value can grow — for example, is the return offered by an annuity set at a fixed rate or is it tied to the stock market?

Providers often present hypothetical back-tested scenarios to illustrate potential outcomes, but as with any investment, past performance is not a reliable indicator of future results.

Equally important is evaluating the provider. Given the longevity of an annuity, they must feel confident in the insurer's ability to meet its obligations:

• How long has the firm been in business?
• What is its financial rating?
• Are you confident in their ability to pay out when due?

Other considerations

Generation X investors should also assess how an annuity will fit within their broader financial planning. Guaranteed income products are most effective when they complement, not replace, other assets and align with liquidity needs, risk tolerance and long-term retirement goals.

By the same token, there are a variety of areas that the financial-services industry should consider to enhance education and adoption among Generation X. These include:

• Deepening collaboration with financial planners to address retirement savings gaps and clarify how annuities might contribute to sustainable income planning
• Expand access through employers, including integrating annuity options into 401(k) plans and other retirement programs
• Encourage comprehensive retirement-planning discussions that include guaranteed income solutions as part of decumulation strategies
• Help reduce debt burdens and increase savings, both within and outside of retirement plans
• Support multigenerational planning, helping Generation X households balance the financial decisions of baby boomer parents and dependent millennial children
• Reframe annuities beyond retirement, using them to help fund known future expenses such as education
• Incorporate anticipated wealth transfers into long-term income planning, helping Gen X clients prepare for how future inheritances might support their retirement income strategies

Generation X is digitally fluent and accustomed to mobile financial experiences. Although the annuity industry has historically lagged in this area, substantial progress has been made in recent years to serve financial professionals and consumers digitally.

Online platforms that simplify onboarding, allow for self-service, and provide real-time income illustrations will be critical to engaging with Generation X.

Without significant change, this "forgotten generation" faces a serious risk of entering retirement less secure than any generation before it.

The retirement industry has both an opportunity and a responsibility to engage Generation X proactively to help prevent a deepening of the retirement savings crisis across a new generation.

Related Content

• Why So Many Gen Xers Feel Financially Stuck — And What You Can Do About It
• The Average Gen X 401(k) Balance Kind of Bites
• Gen X vs Boomers: Why the Rules of Retirement Have Changed
• The Overlooked Generation: An Expert's Guide to How Gen X Can Finally Get Ahead
• How Gen X Could Reinvent Retirement

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

When a family member or close friend passes away, the person named as executor often steps into the role thinking of it as an honor. In reality, it can quickly become something much more demanding.

Consider a typical situation: An individual dies with a family home, investment and retirement accounts and has named beneficiaries. The executor will need to gather financial records, coordinate with attorneys and accountants, manage or sell property, file tax returns and make decisions that directly affect what each beneficiary ultimately receives.

Add in multiple properties in different states, business interests, artwork and digital assets, and settlement of an estate can take several years.

When choosing an executor, many people focus first on trust. While trust is essential, it is only one part of what the role requires. Choosing an executor deserves the same level of attention as creation of the estate plan itself.

Serving as executor is more than an honor — it's a job

Acting as executor comes with a great deal of responsibility and requires a broad range of skills. The role may be filled by an individual, a professional fiduciary such as a trust company or bank or a combination of both serving as co-executors.

In practice, the responsibilities of settling an estate often include:

• Locating, collecting and safeguarding assets
• Paying debts, taxes and administration expenses
• Coordinating with attorneys, accountants and financial advisers
• Managing or selling property
• Communicating with beneficiaries
• Distributing assets according to the terms of the will

Throughout the process, the executor serves as a fiduciary, with a legal duty to act prudently, impartially and in the best interests of the estate and its beneficiaries.

But even this list captures only part of the picture. Administering an estate is often an extended process that requires ongoing judgment, coordination and attention to detail.

Choosing the right executor: What to look for

The most qualified executor is not necessarily the person closest to you. Instead, consider whether they have the qualities needed to manage what can be a lengthy and complex process.

Financial judgment is critical. Executors are often required to evaluate complex or illiquid assets, address liquidity needs and ensure obligations, such as taxes and expenses, are met without unnecessarily diminishing the value of the estate.

Additionally, they must make decisions concerning the sale, retention and investment of the estate assets.

Experience in tax matters is helpful. Executors are responsible for the preparation and filing of the decedent's federal and state income tax returns and applicable estate and gift tax returns.

These filings can involve detailed valuation and reporting, making tax coordination one of the most demanding aspects of estate administration.

Objectivity matters, particularly in families. When an executor is also a beneficiary, decisions such as tax elections or timing of distributions can affect outcomes unevenly. The ability to act impartially is essential to avoiding unnecessary conflict.

Time and availability are often underestimated. Settling a complex estate can easily extend for several years, particularly if an audit issue arises. What begins as a defined responsibility can become an ongoing commitment. Your executor must be willing and able to commit time and energy to the task.

For these reasons, some individuals consider naming a professional fiduciary as sole or co-executor. Professional fiduciaries bring specialized expertise, continuity and established administrative resources, particularly in more complex estates.

Why it's important to revisit your choice

Even thoughtful executor choices should be revisited over time to ensure that each named executor is up to the task.

A lot of things can change between the time an executor is named and when they serve.

• The amount and complexity of assets can change
• Individuals move and may acquire property across multiple jurisdictions, requiring coordination of different probate processes
• Digital assets and cryptocurrency have introduced new legal and practical considerations

Additionally, tax rules are always changing.

Make sure that the person named years ago is still the best fit for today's realities.

The difference between a plan and a successful outcome

For some families, a spouse, adult child or trusted friend may be the right choice. For others, a professional fiduciary or co-executor arrangement may provide valuable expertise, continuity and objectivity.

It's also important to remember that estate administration is often just the beginning. In many estate plans, the executor's work lays the foundation for trusts that may continue for years, or even generations, after the estate has been settled.

Decisions made during administration can influence how efficiently assets are transferred, how taxes are managed and how effectively long-term planning objectives are achieved.

Ultimately, an estate plan is only as effective as the people responsible for carrying it out. Taking time to thoughtfully select and periodically review your executor can help ensure your wishes are fulfilled and ease the burden on the people you leave behind.

Related Content

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• Simple Ways to Make Your Executor's Job Less of a Pain
• How to Store Your Financial Documents the Right Way
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• An Estate Planning Guide for Women: 5 Essential Moves to Prepare for When Life Happens

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.

Keith Ward, 61, is proud of his son, who graduated from college in December of 2025 with a degree in information systems. His son was focused during his studies and worked hard to build skills he thought would lead to gainful employment.

Instead, Ward's son is living at home and struggling to find work.

"He's applied to more than 250 jobs, and I think has gotten seven interview requests," Ward lamented. "Five years ago, employers would've been having fist fights to hire him."

Ward's son's experience isn't unique. The rise of AI has made an already tight job market for new applicants even tighter.

As of March 2026, the unemployment rate among recent college graduates ages 22 to 27 was 5.6%, compared with a 3.1% unemployment rate across all college grads, according to the Federal Reserve Bank of New York.

Underemployment is an equally big issue. As of January 2026, 41.5% of recent graduates were underemployed.

The Federal Reserve also found that as of May 2026, 15% of adults ages 18 to 29 who weren't working said they couldn't find a job, while 10% were working part-time because they were unable to find full-time work.

Ward's son is trying to stay positive. For now, he's working part-time in a bookstore.

"It's been frustrating for him because now he's living with us," Ward says. "He wants to be independent. He wants to be working in this field that he trained for. When he started four years ago, there was no thought that AI was going to be taking jobs."

It's not just Ward's son who's been struggling.

"My wife and I have been planning for retirement. Now we have three of our grown children living with us," Ward says.

Ward's initial plan was to retire within five years.

"But I don't think it's going to happen," he says now. "We're going to continue working until circumstances force us to do something else because we want to have a place for our kids to be."

A troubling trend

Ward's experience isn't unique. A late 2025 AARP survey found that 75% of parents are providing financial support to a child 18 or older. That's apt to impact a lot of people's retirement plans.

Julianne Coleman is 62 and plans to retire abroad with her husband. Now, those plans are on hold indefinitely as her two 20-something children grapple with the reality of today's workforce.

Her 22-year-old, who's a recent college grad, is especially struggling.

"I just don't know how someone like him who's relatively new to the workforce and relatively green is going to find something fulfilling," Coleman says. "There's all this economic uncertainty created by the AI bubble."

Coleman's daughter, who's 26, is in the midst of a career pivot after landing a job out of college that was too AI-heavy.

"She doesn't want anything to do with AI, even though she's well-versed in it," Coleman says. "She wants to move another way because of how damaging she sees it being."

In the near term, Coleman is spending her own resources to feed her grown kids and provide a roof over their heads. Her dream of retiring abroad hinges on being able to sell her home, which she can't do with her children living in it.

"If my kids were fully independent, we would downsize," Coleman says. But since her kids only have roughly $10,000 in savings each and limited job prospects, Coleman feels stuck.

"The next 15 years are critical in terms of mobility," Coleman says. She's afraid she'll lose out on an opportunity she saved for because her kids can't leave the nest.

Mostly, however, she feels for her kids.

"I'm sad for them," Coleman says. "I feel like we had it so much better."

Data from the Federal Reserve Bank of New York points to the fact that remote work is sidelining young job applicants more so than AI right now. On the other hand, Challenger, Gray & Christmas found that U.S. employers implemented 45,849 job cuts in June, largely fueled by AI. While those cuts weren't necessarily specific to younger workers, they speak to a worrying trend.

Adam Spiegelman, founder and wealth adviser at Spiegelman Wealth, says he's seeing firsthand how much young adults are struggling.

"In my 25 years as a wealth adviser, I’ve never seen anything like this year," he says. "I’ve received about a dozen unsolicited emails from college juniors, seniors and recent grads … asking to shadow me or intern at my firm. That’s never happened before."

The trend is much broader, though.

"Many of my own clients are telling me their kids and grandkids are struggling to find work," Spiegelman says. "Whether it’s inflation, the broader economy, AI or some combination, this generation is having a genuinely hard time landing that first real job, and I’m seeing it push some parents to seriously reconsider their retirement timelines."

Should you delay retirement because your kids are struggling to find work?

AI might not be the only reason your 20-something children can't find work. But should you be altering your retirement plans because of it?

Spiegelman says that while it's natural to want to help your grown children, he thinks it's important to separate support from enabling.

"I have a client right now who’s buying a home for his adult child to live in rent-free — a full-time, able-bodied adult with only a part-time job. That’s a very different situation from a family giving a new grad six months to a year of breathing room while they find their footing," he says.

As Spiegelman explains, both are examples of support, but only one has an exit plan.

"Parents need to have that conversation with each other first, before their child even graduates, and agree on what their expectations are and where the line is," he says.

Steve Sexton, retirement planning expert at Sexton Advisory Group, agrees.

"It's natural for parents to want to help their children, especially when they’ve done everything right," he says. "But the biggest thing I would tell parents is support your adult children in a way that does not quietly derail your own retirement."

That's easier said than done when your child can't find a job and might be sitting on a pile of student loans. But like Spiegelman, Sexton feels parents should put a dollar amount and timeline around the help they'll provide.

Most important, Sexton says, parents should avoid tapping retirement accounts, pausing retirement contributions, or taking on new debt to support an adult child.

"Your child has time to recover financially. You may not. A 23-year-old can rebuild from a tough job market, but a 62-year-old who drains savings … may have a much harder time catching up," he says.

You're allowed to fulfill your own dreams

Ultimately, there are many such parents as Ward and Coleman who are in a position to help their kids without necessarily compromising their finances as much as their dreams. But that's also a problem, Spiegelman insists.

"People spend 20, 30, 40 years working and saving so they can retire in their sixties, and that window to actually enjoy retirement — travel, health, time — isn’t unlimited," he says. "Continually pushing that back to subsidize an adult child who could be working is usually not serving anyone well, including the child."

If parents feel they haven’t set their kids up with the right financial habits, Spiegelman says it’s not too late to have that conversation now.

"Start charging rent after a reasonable grace period, and scale support down deliberately rather than indefinitely," he says.

Spiegelman also recommends bringing in a financial adviser or CPA as the “bad guy.”

"It’s a lot easier for a parent to say, 'Our adviser says we can’t keep this up if we want to retire on schedule,' than to have that conversation alone," he says.

Some young adults are as fiscally responsible as can be, yet have fallen victim to circumstances. That's the situation Ward and Coleman are in. They're working to make their peace with a potential change of plans.

As Ward says, "We're fortunate enough to live on five acres in a great setting. It's a large house and a good place for grandkids."

He says, "I certainly do love having the kids around."

If he's ultimately forced to delay retirement, that's at least one consolation prize.

Read More

• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• I Retired at 63 to Enjoy My Free Time, But My Grown Kids Want Help With Childcare
• The Real Cost of Funding Adult Children: Postponing Retirement
• We Are 65 With $2.6 Million. One of Our Two Daughters Struggles Financially. Is It Fair if We Only Help Her?

Retirement is supposed to be the reward for decades of disciplined saving. But for many retirees, a hidden tax problem quietly erodes what they've worked so hard to build — not through fraud or negligence, but through a lack of coordination between their income sources and their tax exposure.

Most retirees don't realize they're overpaying until after the damage is done. In retirement, the biggest tax triggers aren't wages — they're the benefits and accounts you spent a lifetime accumulating.

Understanding how they interact is what separates a tax-efficient retirement from an expensive one.

How IRA withdrawals can make Social Security taxable and Medicare cost more

Your income in retirement flows from multiple sources: Social Security, IRA withdrawals, investment income, sometimes a pension.

Each is governed by its own rules. The problem is that these streams don't exist in isolation. They stack on top of one another, and the IRS adds them together when determining what you owe.

A retiree who pulls $40,000 from an IRA to cover living expenses may not realize that withdrawal just made more of their Social Security taxable, bumped their Medicare premiums, and pushed them into a higher tax bracket.

None of those outcomes required earning a dollar more. They were triggered purely by the order and size of withdrawals from accounts they'd already paid into for decades.

Social Security: How much of your benefit is taxable

Whether your Social Security benefit is taxed depends on your provisional income: Adjusted gross income, plus tax-exempt interest, plus half of your Social Security benefit.

For individuals, once provisional income exceeds $25,000, up to 50% of benefits become taxable. Above $34,000, that rises to 85%. For married couples filing jointly, those thresholds are $32,000 and $44,000, respectively.

These thresholds have not been adjusted for inflation since they were established in the 1980s and 1990s. That means a retiree in 2026 with a modest lifestyle can easily find that 85% of their Social Security is taxable, not because they're wealthy, but because the brackets never kept pace with rising benefit amounts and retirement account balances.

RMDs: The income you're forced to take whether you need it or not

Required minimum distributions begin at age 73 (under the SECURE 2.0 Act, the starting age for RMDs will increase to age 75 for individuals born in 1960 or later). The IRS requires a calculated percentage of your tax-deferred accounts to be withdrawn each year, regardless of whether you need the money.

On a $1 million IRA, the first RMD is roughly $36,000 to $40,000. That amount grows as a percentage of the account each year.

Because RMDs count as ordinary income, they don't just generate their own tax bill. They push provisional income higher, which makes more of your Social Security taxable.

They can move you from the 12% bracket to the 22% bracket. They can trigger IRMAA surcharges on Medicare premiums that won't show up until two years later.

For retirees who spent decades deferring taxes to build a larger account, the RMD is often when the full bill arrives, on the IRS's schedule, not yours.

IRMAA: The Medicare surcharge most retirees don't see coming

The standard Medicare Part B premium in 2026 is $202.90 a month. But that is only what lower-income beneficiaries pay. Once your modified adjusted gross income crosses certain thresholds, you pay significantly more through IRMAA surcharges, and the lookback period means the income that triggers those surcharges was reported two years earlier.

For a married couple filing jointly, crossing into the first IRMAA tier costs $2,297 a year. Moving from Tier 1 to Tier 2 adds another $3,475, bringing the couple's total annual surcharge to $5,772. At the top tier, the combined Part B and Part D surcharges reach $13,872 a year for a couple on Medicare together.

The cliff structure matters: Exceeding a threshold by even one dollar triggers the full surcharge for that tier. A retiree who crosses an IRMAA threshold owing to a one-time Roth conversion or asset sale will pay elevated premiums for the entire following year, regardless of whether income normalized.

What to do about it

This is where most retirement plans fall short. Knowing these rules exist is not the same as having a strategy around them. Here is what proactive planning looks like in practice.

1. Use the pre-RMD window for Roth conversions.

The years between retirement and age 73 are often the most underused planning opportunity retirees have. During this window, income is typically lower, brackets are more favorable and there are no required distributions yet.

Converting portions of a traditional IRA to a Roth account during this period means paying taxes at today's rates on a smaller balance, reducing the size of future RMDs, lowering provisional income in later years, and shrinking the Social Security tax exposure and IRMAA risk that come with large mandatory withdrawals.

The right conversion amount each year is the one that fills your current bracket without crossing into the next one or triggering an IRMAA tier.

2. Sequence withdrawals with the bracket in mind.

The order in which you draw down accounts determines your tax rate each year. A common approach is to spend from taxable brokerage accounts first, then tax-deferred IRAs, then Roth accounts last.

But the more useful framework is to think about filling your current bracket each year deliberately: Taking enough from tax-deferred accounts to use the lower brackets fully, while leaving Roth assets intact to avoid pushing income higher when you don't need to.

3. Map your IRMAA exposure two years out.

Because IRMAA is based on income from two years prior, you need to be thinking about Medicare premiums before you're on Medicare.

A retiree who does a large Roth conversion at 63 needs to understand the Medicare premium implications at 65. The specific IRMAA thresholds for 2026 for married couples filing jointly start at $218,000 in MAGI.

Staying below a threshold is worth real money, and in many cases a modest adjustment to a conversion amount or the timing of an asset sale is enough to avoid crossing a tier entirely.

4. Use qualified charitable distributions (QCDs) to satisfy RMDs tax-free.

Retirees who are 70½ or older and charitably inclined can distribute up to $111,000 a year directly from an IRA to a qualifying charity. That amount counts toward the RMD requirement but does not appear as taxable income.

For a retiree who gives regularly, routing those gifts through a QCD rather than writing a check from a bank account eliminates a dollar of ordinary income for every dollar donated, which reduces provisional income, protects Social Security taxation rates and can keep MAGI below an IRMAA threshold.

The bottom line

Overpaying taxes in retirement is rarely the result of one bad decision. It is the result of income sources that interact in ways most retirees never planned for, because no one mapped those interactions before distributions began.

The strategies above are not complicated, but they require lead time, comprehensive financial planning and strategic coordination. Roth conversions done at 67 change what your RMDs look like at 73. Income decisions made at 63 affect your Medicare premiums at 65.

The retirees who pay the least in taxes are not the ones who earned the least. They are the ones who planned specifically for the way retirement income actually works, before the compounding consequences had already arrived.

Related Content

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• 7 Tax Blunders to Avoid in Your First Year of Retirement, From a Seasoned Financial Planner
• Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very Likely
• Will Your Retirement Income Trigger the IRMAA This Year? (Plus, 6 Ways to Avoid it in the Future)
• When Estate Plans Don't Include Tax Plans, All Bets Are Off: 2 Financial Advisers Explain Why

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

Every retirement plan is built around the same fear: Outliving your money. The industry has developed sophisticated tools to address it.

• Monte Carlo simulations model the probability that a portfolio will survive 30 years of withdrawals
• Safe withdrawal rates are debated to the decimal point
• Longevity risk is taken seriously

The research has identified a different risk, one that is statistically more common, demonstrably more devastating and absent from virtually every financial plan in circulation.

The risk is outliving your mind.

A 2025 systematic review in Health Psychology Review confirmed what longitudinal research has been building toward for a decade: Retirement is associated with measurable cognitive decline, not only because people age but because structured cognitive demand disappears.

Researchers gave the mechanism a name: The mental retirement hypothesis. When the brain is no longer required to perform at the level a career demanded, it follows the body's example and withdraws from challenge. The decline is not inevitable. It is, however, predictable — and far more preventable.

The professor

Margaret spent 41 years as a professor of developmental psychology at a major research university. She published extensively, advised doctoral students, taught graduate seminars and worked at the edge of her discipline for three decades. She retired at 68 with a comfortable pension and her health intact. Within 16 months, she quietly realized that something she had always taken for granted was beginning to slip.

She knew the research. She had assigned papers on neuroplasticity and cognitive aging to her students. She understood, at a scholarly level, exactly what was happening. She simply had not planned for it.

What work does for your brain

The workplace offers something most people never consciously notice until it is gone: A daily cognitive stimulus framework they did not have to design.

• Novel problems arrived uninvited
• Deadlines imposed urgency
• Colleagues challenged assumptions
• Students asked questions with no clean answers
• The environment kept the brain engaged

Margaret's career was among the most cognitively demanding. Her days required reading new research, evaluating evidence, constructing arguments, defending conclusions under peer scrutiny and translating complex ideas for audiences that expected precision. None of it was easy. All of it was, neurologically, exactly what the brain requires to sustain function.

This is where the research presents an inconvenient finding for high achievers: The steeper the cognitive demands of the career, the steeper the potential decline when those demands end. Retirees from high-complexity occupations, such as physicians, executives, lawyers and academics, face the greatest gap between career-level cognitive engagement and the engagement that retirement, by default, provides.

The person who built the most sophisticated mind is, in the absence of deliberate design, at the greatest risk of watching it diminish.

Margaret's retirement did not end her paycheck. It removed the daily stimulus her brain had organized itself around for four decades. The seminars ended. The doctoral students graduated. The editorial reviews stopped arriving. The conferences, the department meetings, the weekly urgency of a discipline that never stopped moving — all of it faded within a single academic year.

What replaced it was quiet and comfortable. And, by the standard the research now applies, cognitively insufficient.

The antidote isn't what you think

When people learn that cognitive engagement protects the aging brain, the response is predictable: Crossword puzzles, brain-training apps and sudoku. These feel like the right answer. They are not wrong, exactly. They are simply not enough.

The research draws a distinction most people miss. Practicing a skill you already possess is maintenance. The brain grows through novelty, not repetition. A crossword puzzle that takes 45 minutes is not the same as a problem with no known solution that requires you to build new mental frameworks to approach it. The first sustains what is already there. The second creates something new.

Researchers at Binghamton University have identified social engagement as, in their words, "simply the single most powerful factor for cognitive performance in old age," ranking it above brain games, supplements, and even formal education. The engagement they describe is social complexity: Relationships that require reading another person, managing disagreement, sustaining a connection through difficulty and being genuinely accountable to another person's expectations.

The research consistently identifies three protective conditions:

• Novel learning, meaning acquiring skills and knowledge you do not already possess
• Social engagement with real complexity and mutual accountability
• Purposeful challenge, meaning goals that require sustained effort and carry real consequences

Margaret's daily crossword does not meet the level of challenge her brain requires. A structured role mentoring junior faculty two mornings a week meets all three. She is learning how her discipline has evolved since she last taught it. She is accountable to people who need her. The outcomes matter. The cognitive demand is functional, not decorative.

The distinction is not about difficulty. It is about demand and whether that demand is connected to something with genuine stakes.

Designing the cognitive portfolio

The financial planning vocabulary that dominates retirement conversations offers, perhaps unintentionally, a useful frame.

A well-managed financial portfolio is diversified across asset classes, actively monitored and adjusted as conditions change. Left unmanaged, it is exposed to risks the owner has not accounted for.

The same logic applies to what might be called the cognitive portfolio: The collection of activities, relationships and challenges that keep the brain operating at a level commensurate with its capacity.

Most retirees do not deliberately manage their cognitive portfolio. They leave it to chance — and chance, without intention, follows the path of least resistance.

Three non-negotiables belong in a well-designed cognitive portfolio:

Novelty. Learning something genuinely new, not merely practicing what is already mastered. A retired professor of developmental psychology who is learning a new language, building furniture or navigating a community board where she holds no authority qualifies. A retired professor reviewing papers in her own specialty, while valuable, does not yield the same neurological return.

Social complexity. Relationships with real stakes, mutual accountability and the productive friction that keeps the mind alert.

Purposeful challenges. Goals that require sustained cognitive effort and carry consequences the retiree genuinely cares about.

For Margaret, this meant three commitments in her second year of retirement:

She joined a community mediation program, a field where her expertise did not transfer and her credentials carried no weight

She accepted an invitation to co-teach a public seminar with a colleague 30 years her junior, a role that required her to learn as much as she taught

And she began meeting weekly with two graduate students whose dissertation committees she had agreed to serve on as an external reader

None of it re-created her career. All of it replicated the conditions her career had provided: Novel inputs, social accountability and a goal that demanded her best thinking.

Intellectual stimulation is one of the five pillars of a fulfilling retirement. Among the five, it is the one most often treated as supplementary. Research on cognitive decline suggests it is anything but. It is load-bearing.

A different kind of risk management

Margaret knew the theory. She had spent four decades teaching it. The gap in her retirement plan was not ignorance; it was application. She understood, in the abstract, that the brain requires challenge to sustain function. She had simply not built that requirement into the concrete architecture of her daily life.

That gap is not unique to academics. It is the structural condition of traditional retirement applied to a brain that was never designed to stop working.

The paradox the research holds without resolving, the very qualities that made a career exceptional, such as the appetite for intellectual challenge, the drive toward mastery and the need for work that matters, are the same qualities that make retirement cognitively risky when they are not deliberately redirected. The high achiever's greatest professional asset becomes, without intentional design, the high achiever's greatest retirement vulnerability.

Financial planning has developed precise tools for managing money over a 30-year retirement. It has not yet developed equivalent tools for managing the mind over the same span. Both are depletable. Both respond to how they are managed. Both require a strategy.

Every retirement plan should answer two questions. The first is familiar: Will the money last?

The second has been absent from the planning conversation for too long.

Will the mind?

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

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

The transition of wealth carries a quiet, universally recognized paradox: The very resources designed to provide security and boundless opportunity can inadvertently destroy a child's drive, purpose and self-reliance.

Parents across the wealth spectrum fear that an unearned windfall will leave their children in a permanent "financial hammock," devoid of the struggles that forge character.

Warren Buffett famously summed up the ideal wealth transfer philosophy: Leave children "enough money to do anything, but not enough to do nothing."

Achieving this delicate equilibrium — providing a robust launchpad without extinguishing personal ambition — requires an intricate understanding of behavioral psychology, modern trust structuring and intentional family governance.

How to tell if your children are ready to inherit

How can you predict if passing on wealth will act as a catalyst or a corrosive force? Evaluating an heir's readiness requires moving beyond subjective parental hope and observing concrete behavioral indicators.

Financial literacy is the foundational "green flag." If an heir understands basic budgeting, contributes to retirement accounts and manages personal debt responsibly, they demonstrate a baseline respect for capital.

Emotional regulation is equally critical. Wealth is a relentless amplifier of existing behavior. If an individual cannot handle themselves gracefully without money, they definitely won't be able to handle themselves with it.

Perhaps the most definitive indicator of readiness is the pursuit of a self-directed mission. Wealth provides profound freedom, but freedom devoid of purpose is a psychological poison.

Heirs who thrive post-inheritance possess a mission independent of the family balance sheet — whether that's building a business, advancing in the arts or sciences, or mastering a profession. Inheriting money requires no skill, but building something from scratch tests the discipline, humility and resilience required to handle sudden wealth.

To evaluate, or build, financial fortitude, challenge your heirs to create an 18-month liquidity buffer for their fixed expenses. Demanding that they achieve this independently — through their own labor, discipline and budgeting — serves as a profound behavioral filter. They must balance short-term gratification with saving.

They may develop a sense of security and greater respect for capital. And, depending on their performance, that may indicate how an inheritance will affect their behavior.

The architecture of preservation: Principal trusts

Historically, estate planning relied heavily on age-based milestones — distributing a third of the principal at age 25, half at 30 and the rest at 35, for example.

This structure rests on the flawed assumption that chronological age directly correlates with emotional and financial maturity. A 25-year-old who adheres to a strict budget may be vastly more prepared for wealth than a 45-year-old who has relied on parental subsidies their entire adult life.

To mitigate the unintended consequences of rigid rules, sophisticated planners increasingly use principal incentive trusts. Rather than dictating an inflexible formula for distributions, a principal incentives trust outlines the wealth creator's core values, guiding philosophies and ultimate intents for the capital.

The trustee is granted broad, discretionary power to evaluate the heir's unique life circumstances. If an heir chooses a noble but lower-paying profession, such as public school teaching or social work, the trustee can authorize distributions to supplement their income — for example, to buy a home and fund other important large purchases.

This highly adaptable structure requires an exceptional trustee who deeply understands the family's ethos and can wield subjective power judiciously.

Cultivating the family enterprise

As family wealth scales into the $50 million-plus tier, the psychological and structural requirements can shift. If your goal is multigenerational funds, the rising generation must not view the wealth as a personal checking account. Rather, it must be conceptualized as a shared, multi-generational family enterprise.

Family wealth pioneer James E. Hughes Jr. advocates for the "family bank" concept. He redefines family wealth as a composite of three distinct capitals: Human (well-being and character), intellectual (knowledge and skills), and financial.

In this paradigm, financial capital is strictly subordinate. Its sole driving purpose is to protect and dramatically expand the family's human and intellectual flourishing.

Instead of passively receiving trust distributions, heirs apply to the family bank for structured loans to start a business or pursue advanced training. This mimics commercial lending but evaluates risk based on the potential growth of human and intellectual capital.

Even if a business venture ultimately fails, the intellectual capital gained by the heir more than offsets the temporary financial loss to the family's balance sheet.

Philanthropy as the ultimate sandbox

For parents wondering how to teach responsibility before the ultimate transfer, philanthropy serves as an exceptional training ground. By establishing a donor-advised fund (DAF) or private family foundation, you can mandate that the rising generation actively participate in its management.

Tasking younger heirs with researching charitable causes and presenting formal grant proposals develops profound empathy while rapidly dismantling entitlement.

It also teaches complex financial mechanics — from asset allocation to administrative costs — in an environment where the stakes are high for the community, but personal financial enrichment is completely removed from the equation.

Transferring wealth without destroying ambition is not a single act executed by signing a legal document — it is a decades-long, highly intentional process. By shifting focus from the mere legal transfer of assets to the psychological preparation of the heirs, families can help ensure their legacy fuels ambition for generations to come.

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

The family vacation is taking up a much larger share of the budget in 2026.

The cost of airfare is up more than 26% compared to last year, according to research from NerdWallet, mostly because of the higher price of oil.

When you add inflation's impact on hotels and dining, you're looking at a pretty penny for the average family of four.

It would be fair to question how much one vacation can really impact a long-term retirement plan.

However, it's not the vacation causing trouble — it's how you pay for it that could have long-term ramifications. One in three travelers who put their summer vacation on a credit card in 2025 are still paying it off today, another NerdWallet report found.

That accumulation of long-term, high-interest debt is what makes plans veer off track.

As the cost of living continues to rise, managing spending may need to move higher up the priority list in your financial plan.

Whether you're considering vacations, home renovations or buying that boat you've been dreaming about, here are three questions you should ask yourself before making a major spending decision in 2026.

1. Will the purchase put me in debt?

High-interest debt is a wealth killer. If you take the cost of your proposed vacation and add 24%, are you happy with the figure that comes out? Not all debt is inherently bad, but rolling credit card balances for unnecessary purchases certainly can be.

You can always cut costs on the vacation plans. Maybe you scale back the timeline of your visit or choose a road trip instead of a flight overseas. The value of a vacation doesn't come from the dollar amount spent, but from the time spent with family or friends.

There are always expenses that can be removed or reduced to bring your spending in line with your long-term plan. Making your purchases outright is always better than letting thousands of dollars accumulate on your credit card. If that debt is going to linger beyond your return date, consider when and where you can save along the way.

2. Does this purchase align with my priorities?

The most frugal among us may call vacations frivolous spending. Others will say that vacations are essential to relaxing, refreshing and allowing us to return to work rested and ready.

Burnout is a real consequence of the work-driven mantra that America loves to push. If a vacation is essential to your wellbeing, then by all means, make it happen.

That said, any large purchase should be in line with your long-term priorities. Does this short-term expense build toward your goals, or does it hinder them?

That answer will look different for every individual, but if you find yourself agreeing with the latter, there are alternatives to travel that can be equally rewarding.

One example is a home renovation. There's more of an investment in your purchase, which will keep you in line with your long-term plan. For instance, the rise in remote and hybrid jobs has made expansive home offices an increasingly valuable feature.

Meanwhile, finishing and renovating your basement is shown to have a potential 70% return on your investment.

Renovating your home may not be as restful as a vacation, but it's the kind of mentality to consider as costs rise and you find your plan being stretched to the limits. Is there some way to put your hard-earned dollars toward a purchase that returns value in the long run, is more in line with your priorities and still gives you satisfaction?

3. Will this impact my long-term goals?

A singular major purchase rarely determines whether or not someone retires successfully. But repeatedly overspending or delaying retirement contributions can. Will this vacation dig into your emergency savings? Will the impact be temporary or become an ongoing financial burden?

Vacation spending can be a slippery slope. You're getting away to enjoy yourself, and it's not enjoyable to type every purchase into a budget while you walk along the beach. It is enjoyable to get a few extra cocktails or room service. The dollar amount spent could end up much higher than you intended.

Time to decide

More and more families are living paycheck-to-paycheck across the country. This year, you may benefit from skipping a major purchase.

If you do decide to go away, make sure the trip doesn't compromise your good money habits. That means keeping savings intact, staying out of debt and keeping your retirement contributions on track. The goal is that your long-term plan remains in place, regardless of where you choose to spend your money.

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

The financial professionals who contribute to Kiplinger's Adviser Intel are always here to share expert insights on wealth building and preservation.

They've recently written about the lessons in Belle Burden’s New York Times bestseller, Strangers: A Memoir of Marriage, and what can happen when a wife blindly trusts her spouse with the family finances.

This quiz is designed to test how much you know. (And don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Please note that this quiz has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or financial advice.

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When you're building wealth for retirement, it's often advisable to go heavy on stocks so your money can grow. But as retirement nears, it's common to reduce your exposure to stocks and shift more of your assets into bonds for stability and predictable income.

There's no single "optimal" allocation between stocks and bonds to aim for in retirement. The famous 4% rule for retirement withdrawals assumes a fairly equal stock/bond split, but there's wiggle room in that formula.

That sort of split doesn't work for everyone, though. Recent findings from Fidelity show that 38% of retirement savers ages 65 to 69 may have a higher stock allocation than what's typically recommended. The same holds true for 50% of savers 70 and over.

On the flipside, T. Rowe Price, in collaboration with MIT Sloan and Stanford, found last year that 10% of retirement savers prefer to avoid stocks completely.

Of course, the reason why financial experts might advise against that is clear. Retirement can last for decades, during which time inflation can easily erode purchasing power. Stocks have historically beaten inflation over the long term. And dumping stocks completely could mean losing buying power through the years.

But that doesn't mean ditching stocks completely isn't reasonable for some retirees. There are certain scenarios where a stock-free portfolio can get the job done.

1. When you have enough guaranteed income to cover your costs

Getting rid of stocks in your portfolio may stunt its growth during retirement. But that's not necessarily a terrible thing if you don't need your portfolio to cover your expenses and would rather have the peace of mind.

"This strategy could be good for someone who is looking for very low risk," says Joel V. Russo, Founder and Principal at NJ Retirement Planning, LLC. "After years of owning and riding the highs and lows of the stock market, retirement sometimes sets the tone for leaving that risk of loss behind."

As Russo explains, if your fixed income, Social Security, and/or pension cover all of your overhead, then the risk of owning stocks may not be worth it. And if more income is needed, he says, products like annuities could help bridge the gap.

Scott Schuebel, CEO and Managing Partner at Statera Advisors, agrees.

"Ironically, the retirees who can often afford to take the most investment risk are often the ones whose essential expenses are already covered by predictable income," he says. "Because they aren't relying on their portfolio to pay next month's bills, they can be more patient during market downturns and give their investments time to recover."

That said, people whose expenses are covered do not need to take on the risk of holding stocks in retirement if they don't have the appetite for it.

"If market volatility causes someone to panic and make poor decisions, a more conservative portfolio may actually produce better real-world outcomes even if the expected return is lower," Schuebel insists.

2. When you have a giant pool of money to work with

In June, Fidelity reported that the average 401(k) balance was $258,800 among savers 65 to 69 and $264,000 among those 70 and over. (Keep in mind that average balances are inflated by the very wealthy.)

With a smaller nest egg, ditching stocks becomes harder. But Diana Richey, JD and CFP, says that with a large enough savings balance, avoiding stocks is less of a problem.

"For a couple in their 70s with, say, $8 million, $200,000 in annual spending, and health concerns, it can be perfectly reasonable to avoid stocks," Richey says. "At a 4% yield, the portfolio could generate about $320,000 a year before taxes — more than enough to cover their current spending and provide a cushion for inflation and potentially long-term care."

Richey insists that someone with a large asset base does not need to take stock market risk they can afford to avoid.

"A diversified portfolio of high-quality bonds and cash could protect principal, reduce stress, and preserve assets for heirs," she says. "If the goal is security rather than maximum return, skipping stocks can make sense."

3. When you have health issues

Russo points out that health concerns are another reason to consider dumping stocks completely.

"Maybe you're unhealthy or [expect] a shorter retirement than normal," he says. In that case, it pays to look at investments and vehicles that can provide income for a shorter period of time.

Schuebel agrees.

"If a retiree has a serious medical condition and their planning horizon is measured in just a few years rather than decades, preserving capital and ensuring liquidity often become more important than long-term growth. At that point, the purpose of the portfolio changes," he says.

Of course, just because you have health issues and are more focused on short-term needs doesn't mean you don't have a spouse to think about. But in that situation, rather than turn to the stock market, you could try locking in more guaranteed income.

Delaying a Social Security claim until age 70, for example, may result in a smaller lifetime benefit for you if you have health issues. But it could leave your spouse with a more robust survivor benefit.

Stocks may not be as "unsafe" as you think

There are clearly some use cases for ditching stocks entirely in retirement. But before you do, consider that with a well-diversified portfolio and cash cushion, keeping a portion of your portfolio in the stock market may not be the risky move you think it is. And by avoiding stocks, you take on a different type of risk—losing out on buying power over time.

As Russo says, "If a long retirement is in your future, keeping pace with inflation could be tough with just safe investments."

With a long horizon, keeping even a small amount of money in stocks could put you in a stronger financial position later in life.

"Retirement could last nearly 30 years," Russo says. "You could actually find you’ve lost out on opportunity costs by not participating in a long bull market run."

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