Whether you're a spender or a saver, a speculator, trader or investor, you're only human.

And there's no sense in not being constructive about it.

If you aspire to be a successful investor, the first thing to do is acknowledge what Ritholtz Wealth Management Chief Investment Officer Barry Ritholtz calls your "lizard brain."

Don't be shy, we've all got it. It's a feature of evolutionary psychology.

The second thing to do is take our short quiz to see whether you're really on your best behavior as an investor.

More on investing from the Kiplinger team:

• Greed, Fear and Market Volatility: A Financial Adviser's Guide to Keeping Emotions Out of Investment Decisions
• Stop Waiting for the Perfect Moment to Invest: There Isn't One
• These 7 Investment Behaviors Hurt Retirees the Most, But It's Not Too Late to Change Your Ways
• How to Pick the Right ETF for Your Financial Goals
• The Best All-in-One ETFs to Keep Your Investment Portfolio Simple
• The 5 Best Long-Term Investment Stocks to Buy for Steady Returns
• 5 Top Buy-and-Hold Investments to Manage Market Volatility
• 5 Tips to Help You Prepare Your Portfolio for Midterm Elections

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

Dear Wealth Wise: With tuition for private colleges nearing $100k a year, I have four questions about college savings for a child or grandchild.

1. When should you start saving, and how much per year?
2. What happens to any excess money in a child's 529 after they have graduated?
3. Does bankrolling a four-year university still make financial sense given the job market and potential AI takeover?
4. Do you think lawmakers will change the rules on leftover 529 funds if college becomes increasingly less useful in the coming years?

— Stressed Saver

Dear Stressed Saver: Any parent or grandparent trying to finance a child's education knows the struggle of balancing college savings with retirement savings. Still, many are willing to make sacrifices so their children or grandchildren can choose among universities without accumulating a massive pile of debt.

But with a weak entry-level job market and the possibility of AI taking an increasing number of jobs, some may be wondering just how much of an effort to make on the college savings front, and if a four-year degree is even worth it.

Those are exactly the questions one of our readers has for us. They want to understand how to prioritize college savings and whether a 529 plan is the right choice in today's changing landscape.

There's a lot to unpack here, so let's review what our experts had to say.

1. When should you start saving and how much per year?

Retirement savers have an advantage. They can begin funding an IRA or 401(k) in their 20s, potentially giving that money 40 years to grow. The window to accumulate college savings isn't as long, unless you're willing to start socking funds away for education prior to having kids.

Jonathan Codispoti, President at Legacy Wealth Strategies, says that if you're potentially looking to fund a $100,000-per-year education, your best bet is to start at birth. However, he cautions, "You can borrow for college. You can't borrow for retirement."

That's why he advises clients to first max out retirement plan contributions and then allocate what's left to college savings.

Michael Van Boening CFP and Director, Financial Planning at Mercer Advisors, agrees.

"Ideally, you should have a retirement plan of record that shows you are saving sufficiently for a successful retirement before starting to save for education," he says.

But Van Boening also says it’s important to start saving for college as early as possible to give your 529 plan time to compound and grow.

"A public four-year university could easily cost $150,000-$250,000 in future dollars. To fund the average public in-state school 100% in 18 years, you would need to save approximately $700 per month, or $8,400 per year," he says.

Codispoti says one way to get a head start on college savings is to take advantage of "superfunding." You can contribute up to $95,000 per child in a single year using the five-year gift tax averaging rule.

If you're a grandparent, there's a 529 loophole for you. Under FAFSA rules implemented in 2024, distributions from a grandparent-owned 529 account no longer count as student income, meaning they won't hurt a grandchild's financial aid eligibility in most cases.

2. What happens to excess 529 funds?

Some might say having too much money in a 529 plan is a good problem to have. Thankfully, it's less of a problem these days.

As Van Boening explains, "You can always move some or all of the 529 funds to another beneficiary within the family. This extends to siblings, children, grandchildren, even including first cousins."

Another option, he says, is to save the excess funds for the beneficiary's graduate or doctoral degrees. You can even make yourself the beneficiary and use the funds to attend classes to further your education. Plus, 529 plans can be used to pay for vocational school if your child decides not to pursue a traditional college education.

"Most 529 accounts do not have time limits when the money must be withdrawn, so the accounts could be used as an educational legacy for future generations," Van Boening says.

Another important thing to keep in mind is that under SECURE 2.0, excess funds in a 529 plan can now be rolled into a Roth IRA, up to $35,000. But there are some nuances.

"The annual limit is the Roth account contribution limit, and the rollover counts as the annual contribution to the Roth IRA," Van Boening says. As such, based on today's Roth IRA contribution limits, it could take several years to complete a $35,000 rollover.

Van Boening also explains that the beneficiary must match the 529 account beneficiary, and they must have earned income equal to or higher than the rollover amount. In addition, the 529 account must have been open for at least 15 years.

Codispoti calls this flexibility a game-changer.

"This eliminates the old overfunding penalty fear [for most savers]," he says. If you don't need the money for college, it still grows for retirement.

Still, if you've overfunded a 529 plan by $100K, your beneficiary will be on the hook for a 10% penalty and income taxes if they don't use the money for education. That said, proceeds from a 529 account don't incur taxes in many states.

3. Will lawmakers change the rules on leftover 529 funds?

Given uncertainty about the future need for a college degree, our reader wonders whether 529 rules might change even more if college enrollment wanes.

Codispoti's answer? Possibly.

"The trend is toward more flexibility, not less," he explains. Recent legislation already expanded 529 use for K-12, apprenticeships, and Roth rollovers, he says. "If enrollment declines persist, I'd expect further expansion rather than restrictions."

Van Boening has a similar take.

"It’s hard to predict future policy changes, but I would bet that future changes are more likely to increase flexibility than to restrict existing benefits," he says.

4. Does four-year college still make sense?

Even if you're able to juggle retirement savings and 529 plan contributions, you may be wondering if you should even be planning for your children to attend college given the uncertainty that abounds.

Codispoti says four-year college still makes sense. But, he says, "The ROI calculus has changed."

As he explains, a degree still correlates with significantly higher lifetime earnings versus non-graduates.

"However," Codispoti continues, "the real question isn't if college pays off. It's whether their child will graduate with a plan. The days of any degree, any school equaling automatic success are over. Targeted vocational paths, apprenticeships, and entrepreneurship are also viable routes worth serious discussion."

Van Boening, meanwhile, also says a college degree still makes sense, especially for in-demand professional careers.

"The data from the National Center for Education Statistics shows that those with a college degree earn about 59% more than those with just a high school diploma," he says.

But Van Boening also cautions, "It pays to choose wisely, though, because some degree programs do not have a good return on the education investment, especially if the chosen field is not in demand."

Bonus advice: consider the Roth IRA

Although our reader didn't ask this question directly, since they're asking whether a 529 plan makes sense to prioritize, we'd be remiss not to mention an alternative college-saving option — the Roth IRA.

Codispoti says that even though 529 plans now allow for a Roth rollover, "for parents who want maximum flexibility, prioritize a Roth IRA first. Contributions can be withdrawn penalty-free for any reason, including college. Then use a 529 for additional savings."

Van Boening, meanwhile, says that while you can use a Roth IRA to save for college, he still recommends 529 plans. But you should only fund yours up to a point.

"We typically recommend clients aim for saving 75% to 80% [of college costs] in their 529 accounts," he says. Often, he continues, "the remaining balance can be paid for through scholarships, grants, relatives contributing, or even the parent’s own cash flow or savings."

And don't forget that if you end up with a small college savings shortfall, your child can always borrow. So if you need to limit college savings to prioritize your own savings, you shouldn't think twice.

As Codispoti says, "Never sacrifice your own retirement to fund college. Your kid can get a loan. You can't get a retirement loan."

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 ADVICE ON COLLEGE SAVINGS

• Should You Upsize When College Tuition and Retirement Collide?
• Should We Bankroll Our Son's $180K Law School Tuition Even Though We're Retired?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?

Read More

• We're 54 With $1.8 Million. My Wife Wants to Start a College Fund for Our Grandson, but I Think We Should Keep Funding Our Retirement.
• 529 Funds and a Roth IRA: How to Use One to Jumpstart the Other
• We're 75 With $3.2 Million. Our Grandchild Needs Help Paying for College, but It's Not Our Fault She Picked a School That's $90k a Year!

I've gotten pretty good at recognizing AI-generated emails. A client sent me one recently about their portfolio — formal, thorough and missing the person I knew on the other end. I asked about it.

Sure enough, they had fed their account information into an AI tool, asked a few questions and forwarded the result. They were thoughtful and proactive. They were also outsourcing a conversation that I would have preferred to be between the two of us.

I'm not here to argue that AI isn't useful. It is. I use it myself, and I'd encourage clients to use it too — as a starting point. It's a handy way to educate yourself and a tool for thinking more clearly before a conversation.

But there's a difference between a tool that helps you think and one that thinks for you. In financial planning, that difference matters enormously.

What AI does well, and where it falls short

AI can model a real estate transaction. It can simplify dense information. It can tell you the fastest path out of debt or project the growth of a retirement account over 30 years. It solves the blank-page problem: When you don't know where to start, it gives you somewhere to begin.

What it doesn't have is intuition, emotion, common sense or imagination. In my experience, those four things are what determine whether a financial plan actually works for the person who has to live it.

Consider something as straightforward as a mortgage. When interest rates were near historic lows, the math was clear: Keep the debt, invest the difference, earn a greater return. That spreadsheet was right.

But for some clients, the idea of owning their home outright matters more than any rate-of-return calculation. It's visceral. It's about security and identity and a feeling that no model captures.

I've learned not to fight it. When someone is choosing between two good options and one of them speaks to something deep, the right answer isn't always the optimal one.

The machine doesn't know you

Risk tolerance is another place where this shows up clearly. A portfolio model can tell you that, based on your age, timeline and assets, you should be fully invested in equities. And maybe you should.

But if you're the kind of person who can't sleep when markets fall — who will sell at exactly the wrong moment because the pain has become unbearable — that "optimal" allocation was never right for you to begin with. Human nature, in my experience, is undefeated. The best financial plan is the one you can actually live with.

I've also seen AI confidently deliver wrong answers, with no indication that anything was off, on things like tax situations, withdrawal strategies and rules that vary by state or year. The output is only as good as the question, and most people don't know what they don't know.

That's not a knock on the technology. It's a reminder that for high-stakes decisions, accuracy isn't enough. You also need judgment.

And then there's the kitchen table. So many of the financial decisions that shape a family's life happen in conversation — over a meal, in the car, in the quiet after the kids go to bed. Those conversations draw on decades of shared history.

You know what makes your spouse nervous and what makes them feel safe. You know what your parents modeled, what worked and what didn't, and what you want to do differently.

The machine doesn't know any of that. It can't ask the right follow-up question, sense that something is being left unsaid, or recognize that the numbers are only half the story.

A partner, not a substitute

Here's what I've come to believe: AI works best as a partner in this process, not a replacement for it. Use it to educate yourself, clarify your thinking, and to prepare for the conversations that actually matter.

But before any decision that carries real weight, like a retirement, an inheritance or a major life transition, bring it to someone who knows not just your portfolio, but your history, your family, your values, and what you actually want your money to do for your life.

The goal of financial planning has never been to produce the most mathematically elegant outcome. It's to help people build lives they feel good about. That work has always required something a machine can't replicate: The ability to understand a person, in full, and help them move toward what they actually want.

AI can build a budget. It can't build a life. That part is still ours.

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• Are You Hesitating to Spend Money You've Spent Years Saving? Here's How to Get Over It, From a Financial Adviser
• I'm a Financial Adviser: When Managing Your Wealth Feels Like a Pain, Simplify

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

Few subjects are as difficult to consider as your own mortality. "Americans are famously afraid to talk about death," says Tanya Marsh, a Wake Forest University professor who teaches a class on funeral and cemetery law. "We almost willfully don’t want to confront the inevitability of the end."

So if you’re like most people, planning your own funeral is not top of mind. But making your wishes known before you pass away can be a real gift to your family, says Sara Williams, past president of the Funeral Consumers Alliance, the watchdog organization for the funeral industry.

Emotions run high following the death of a loved one, and outlining whether you would like to be buried or cremated, the type of memorial you prefer, and other elements of your end-of-life services relieves your family of making those decisions while they’re grieving.

"It gives the family peace of mind because they don’t have questions like, ‘What did Mom or Dad want?’ Mom or Dad already answered those questions," says Camelia Clarke, president of Paradise Memorial Funeral and Cremation Services in Milwaukee and a spokesperson for the National Funeral Directors Association. Clarifying your wishes can also help head off family disputes, she says.

Planning your own funeral can save your family money

Planning your funeral may alleviate the cost burden, too. According to a study by the National Funeral Directors Association, from 2021 to 2023 (the most recent data available), the median cost of a funeral with a casket and burial increased by 5.8%, from $7,848 to $8,300; the median cost of a funeral with cremation, including a cremation casket and urn, rose by 8.1%, from $5,810 to $6,280.

By creating a plan now, you may be able to lock in current costs on some aspects of the funeral or set aside the right amount of funds to cover the expenses later.

Another reason to make your own arrangements: You get a say in them. Increasingly, baby boomers are planning their funerals because they are more likely to shun a traditional service involving an open-casket viewing at a funeral home and a graveside service to bury the remains, says Marsh.

She has seen a growing interest not just in standard cremation but also in practices such as water cremation and natural organic reduction (human composting), as well as in memorial services at locations such as museums, parks and restaurants.

Settling the details in advance can make it easier on your family

If your children or other relatives don’t live near you, or if you plan to be buried in a different geographic area from where you live now, settling the details ahead of time can ease the logistics for your family.

Michael Adell, of Frisco, Texas, experienced that challenge firsthand when his father passed away last year. His father, who was also living in Texas when he died, had purchased cemetery plots for himself and his family in Michigan, where he was raised. But he hadn’t made any other plans. Adell had to handle such matters as flying his father’s body to Michigan and then getting him to the funeral home.

"You’re learning when you’re doing, which makes it stressful and hard with all the other emotions that are going on," Adell says.

Eager to avoid that situation again, Adell approached his family members and offered to plan their funerals as well as his own. His mother, his wife and his brother all agreed to it. When his mother died suddenly just a few months later, "all I had to do was call the funeral home, and they did everything else," he said. "It was a lot easier."

Decide your arrangements

The first step is to decide the kind of arrangements you want. Details can include any elements that you feel are important, whether it’s selecting a funeral plot, headstone or cremation urn, choosing who will give the eulogy, specifying a photo you want in your obituary or the clothes you’d like to be buried in, or even listing the type of food to be served at the memorial service.

Clarke recalls one individual who loved M&M’s and requested to have bowls of the candy placed around the funeral home, while another wanted a lakeside service featuring an all-white color scheme. "The casket was white, and everyone at the service wore white," Clarke says. Engaging in this planning allows the individual "to be very specific in what they want."

Adell designed his family members’ footstones, right down to the font and height of the lettering and leaving room just for the date of death, to ensure they would look consistent. "It’s a dumb detail, but it’s a detail I get to control because I’m here," he says.

Consider the costs and how you'll cover them

You’ll also need to think about the costs and how you’ll cover them. Ask several funeral homes for a general price list, an itemized menu of all their goods and services; funeral homes are required to provide this list, says Williams.

Shopping around could save you a lot of money, she says, pointing out that in the same town, a direct cremation (which involves no viewing, visitation or other services) could vary in price by thousands of dollars.

Many funeral homes allow you to pay for some or all the services in advance, and you may be able to lock in current prices by going this route. But think twice before you make a financial commitment. What happens if the funeral home goes out of business, or if you move away and no longer want to use its services?

And you need to make sure you understand whether additional expenses may apply at the time of your death, even if you pay now. Because the cost of certain items, such as transportation and cremation, increase over time, some funeral homes will make prearrangements with you via a contract but will not guarantee current pricing, says Katie Sheehan, a former estate-planning attorney and now a managing director and wealth strategist at Crestwood Advisors in Boston.

"It is important for clients to know which they are purchasing," she says. "Always read the fine print."

Buying a cemetery plot and structuring your arrangements in advance are good steps to take, says Williams, but she discourages prepaying for the entire funeral. Instead, she recommends opening a payable-on-death account, in which you can deposit enough money to cover the estimated expenses. When you die, the designated beneficiary receives the funds.

Put the plan in writing

Once your plan is complete, put it in writing, and make sure your loved ones know about it. Many estate-planning attorneys prepare a binder for clients that includes a funeral tab where they can leave instructions to family members, including their wishes regarding disposition and services, says Sheehan.

If they have made prearrangements with a funeral home, that would also be the place to keep a copy of that paperwork. And regardless of whether you work with an attorney, you can have conversations with your loved ones about your wishes and provide them with written copies of the plans and documents, says Marsh.

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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Most retired couples rely heavily on Social Security benefits. When one spouse dies, there's often a major loss of their benefits.

The surviving spouse will get either their own benefit or the survivor benefit (the deceased spouse's benefit), whichever is higher. If one spouse's benefits are low, the impact on income will be small.

But when both spouses are collecting substantial benefits, as is often the case, there will be a significant reduction that could last for many years.

That can cause a shortfall because living expenses may not decline very much. If the survivor stays in the same home, property taxes or rent, utilities, insurance and some other monthly expenses remain about the same.

For example, Jim Jones collects $2,500 a month, and June Jones gets $2,000. If one of them dies, the survivor will receive $2,500 a month — a 44.4% drop in total benefits. If both are getting $2,500, the drop would be 50%.

One way to offset a decline in future Social Security benefits is to buy a joint lifetime income annuity. It provides a stream of guaranteed income that continues after the death of a spouse. You must choose when your payments will start when you sign up. Some products, however, may allow you to change the start date.

A fixed indexed annuity with an income rider, a more complex product, also provides guaranteed lifetime income. The big advantage is flexibility: The starting date for income is not set when you buy the annuity. You can begin when you want.

A traditional lifetime annuity produces generous income "forever"

An income annuity can cover one person or both spouses. A joint income annuity pays the survivor the same income stream after one spouse has died. It can help fill the income gap that is created when Social Security benefits plummet after a spouse's death.

You can choose an immediate or a deferred annuity. With a deferred income annuity, the longer you defer payments, the greater they'll be.

How much income can you get?

For example, the Joneses are 67 years old and healthy. They deposit $200,000 in a joint deferred lifetime income annuity. They decide to start receiving payments at 80. With one of the highest-paying products on the market (as of August 2026), they will receive $3,758.07 a month for as long as either is living.

Of that amount, only $2,454.02 will be taxable, as the remainder is considered a non-taxable return of principal. If at least one of them lives long enough for the entire principal to be repaid, the income will continue but become fully taxable. This is where the insurance aspect kicks in and why an income annuity serves as longevity insurance.

Here's a different scenario. Jim is in bad health and doesn't expect to live more than a year or two. He wouldn't be eligible to buy more life insurance, but annuity companies don't care about a buyer's health.

The couple decides to purchase an immediate income annuity. If they buy a joint lifetime immediate annuity with a $200,000 deposit, they'll soon start receiving $1,237.65 a month (only $519.81 taxable) from one top insurer.

If Jim lives longer than expected, that's fine. If he doesn't, June will have a cushion to make up for reduced Social Security benefits.

Alternatively, Jim and June could put part of their money in an immediate annuity and part in a deferred income annuity, or they could purchase an income annuity payable only on June's life, which would provide a higher guaranteed income.

The traditional income annuity typically has no cash surrender value. You've traded your money for a stream of income — your own private pension.

Indexed annuity: Cash value plus guarantee gives flexibility

A fixed indexed annuity offers a different, more flexible path to guaranteed lifetime income.

These products guarantee a portion of the stock market's gains during up years while offering complete protection from loss during down years. They credit interest based on the growth of a market index, such as the Dow Jones Industrial Average or S&P 500. So while you typically don't get all of the return when the market is booming, in return, you lose nothing in down years.

By adding a guaranteed lifetime-income rider, you can assure future income. Since the starting date for income is not set when you buy the annuity, you can start getting payments whenever you want to. This is a great feature because even a retiree in great health can die unexpectedly.

Have cake and eat it, too, but no free lunch

Normally, when you convert an annuity into an income stream ("annuitization"), its cash surrender value becomes zero. That's not the case if you add an income rider. You still own the full unused value of your annuity: You can "have your cake and eat it too."

But there's no such thing as a free lunch. Most insurers charge around 1% annually of the assets in the annuity to add an income rider. That's significant: Your money will grow more slowly than without the rider.

The lifetime income payment amount is determined by the income account value and your gender and age at the time you start receiving payments. The income account value typically grows at a guaranteed annual compounded rate of 4% to 8%, so the longer you wait, the greater the income.

The income account value and cash value of your contract are separate. The income account value is used only to calculate your guaranteed income payments. It has no cash value and cannot be withdrawn.

In contrast, the contract value can be withdrawn or passed to your heirs. After many years of guaranteed income payments/withdrawals, the contract value may fall to zero, but you'll still get the same income for life.

Another downside is fluctuating interest rates. If the market goes through a long bear cycle, you may earn nothing on your contract value for several years.

Nevertheless, having cash value and flexibility are powerful advantages that make indexed annuities worth considering for generating a strong stream of income.

There's no one approach that's best for everyone. The traditional income annuity and the indexed annuity plus income rider each have their pros and cons. For some couples, the former will fit the bill; for others, the latter will.

This article covered a basic scenario where each spouse is collecting Social Security. If one spouse is significantly younger, planning can be a bit more complex. Nevertheless, the same general principles hold.

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

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

For many people looking for a tax-friendly retirement, no-income-tax states like Florida usually top the list. But recent data indicate an interesting trend: More and more older adults are choosing a small Mid-Atlantic state where the retirement math is more interesting than some might expect.

We’re talking about Delaware.

According to U.S. Census Bureau data, Delaware’s population of residents age 65 and older has increased by 23% since 2020. That’s the fastest growth rate in the nation for the 65-and-older population, according to Census estimates.

Part of the draw might be that newcomers to beach communities like Lewes, Rehoboth Beach and Milton can enjoy a coastal lifestyle without moving far from family and friends elsewhere in the Northeast and Mid-Atlantic.

Interestingly, though Delaware isn't a zero-income-tax state like retirement powerhouses Florida or Texas, taxes factor into the equation for some retirees running the numbers. Here’s more to know.

Why Delaware is becoming a retirement destination

Delaware is becoming increasingly popular with older adults.

• Seniors now make up nearly 22% of the state’s population, according to USAFacts, compared with roughly 18% nationwide.
• In Sussex County, older adults make up nearly a third of residents, pushing the median age to just over 53 years, according to U.S. Census estimates.

New residents are also arriving with financial resources. The latest available IRS migration data show that households moving into southern Delaware from higher-cost states have average annual incomes over $136,000.

So what makes Delaware appealing as a retirement destination? The answer lines up in several ways with what many retirees say they want in a place to live.

• A 2025 survey from the Transamerica Center for Retirement Studies found that an affordable cost of living was the top consideration, cited by 65% of retirees, followed closely by proximity to family and friends at 61%.
• Access to excellent health care and hospitals ranked third, cited by 49%, while 28% pointed to leisure and recreational activities.

Delaware's healthcare infrastructure is geared toward an aging population. For example, in Sussex County, Beebe Healthcare operates a 210-bed medical center in Lewes, while ChristianaCare has reportedly expanded primary care and senior-focused services in Rehoboth Beach and Milford.

Additionally, retirees from neighboring Mid-Atlantic states may choose Delaware for its proximity to children, grandchildren, and longtime friends without giving up a coastal lifestyle.

There’s also plenty to do beyond the beaches.

Southern Delaware offers miles of hiking and biking trails, including those at Cape Henlopen State Park and the Junction & Breakwater Trail linking Rehoboth Beach and Lewes, along with boating, fishing, and golf. Other areas are bustling with restaurants, boutiques, and galleries, plus live music, festivals, and other events throughout the year.

Those amenties help explain the First State’s appeal. But for some retirees from higher-cost states, the retirement math also includes taxes.

How Delaware taxes retirement income

Delaware levies a progressive state income tax with rates ranging from 2.2% to 6.6%. However, retirees rarely pay Delaware income tax on their full income. That’s because:

Delaware exempts Social Security benefits from state tax. (The state also doesn’t tax Railroad Retirement benefits.)

Delaware offers retirement income exclusions. Residents age 60 and older can exclude up to $12,500 of eligible pension and retirement income from state taxable income. Qualifying sources include distributions from IRAs and 401(k)s, as well as dividends, capital gains, interest, and net rental income.

For a married couple where both spouses are at least 60, each spouse can generally claim up to a $12,500 exclusion for eligible retirement income, for a combined potential exclusion of $25,000.

For some retirees, those exclusions could result in a lower state tax bill than they would face on the same retirement income in other states.

Note: We're talking about state tax liability. You still may have federal taxes on retirement income to consider.

Sales and property tax tradeoffs

However, income taxes are only part of the tax equation. Delaware offers zero sales tax and relatively low property taxes.

• No sales tax: Delaware has no state or local sales tax, which can reduce the cost of everyday purchases and larger expenses. (Florida, by comparison, has a 6% statewide sales tax, plus local surtaxes in many counties.)
• Low property taxes: Delaware’s effective property tax rate is about 0.54%, compared with 0.78% in Florida, according to 2026 Tax Foundation data. The actual difference depends on the home’s value, location, and applicable exemptions.

But…that doesn't necessarily make Delaware the cheaper place to own a home.

Sussex County's growth (nearly 40,000 residents in the past six years) has reportedly increased housing demand and pushed prices higher. That can be good news for people who already own homes there, but it can be a different story for retirees just arriving.

Someone moving to Delaware for retirement from a high property-tax state might see lower property taxes while paying more for the house itself.

Delaware vs Florida cost of living

While Florida draws attention for having no state income tax, the full financial picture can change once other costs enter the calculation.

The following table shows how various costs might add up.

Average Annual Costs in Florida and Delaware

Note: This comparison, for educational purposes only, assumes a $500,000 primary residence, $500,000 in homeowners insurance dwelling coverage, and $20,000 in annual taxable purchases. Property-tax estimates use 2026 statewide effective rates; insurance estimates use 2026 published rates; and Florida sales tax uses the 2026 average combined state and local rate.

State income taxes are excluded because they vary by income, deductions, and exemptions. Actual costs vary by location, coverage, exemptions, and spending.

Is retiring in Delaware a good idea? Bottom line

For some retirees, the appeal of a retirement state isn't always about finding the lowest income-tax rate. It's about what happens when you add up all the smaller pieces of the budget.

Before choosing a retirement destination, consider the sometimes seemingly "hidden" costs that follow you into retirement — including how retirement income is taxed, what you'll pay to own a home, and how much you plan to spend each year.

The state you might assume to be cheapest due to having no income tax might not necessarily be the one that leaves you with the most money to spend.

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I've lived in Florida for more than 30 years. In that time, I've watched thousands of people move here to retire — and I've seen a smaller but steady number of them get surprised by tax rules and costs they didn't know existed.

Most of these surprises are avoidable. You just need to know where to look before you need the answer, not after

As a wealth adviser, here's what I tell people at Evolution Retirement Services' seminars on retiring in Florida, boiled down to the basics.

'Snowbird' isn't a tax status

Spending winters in Florida and summers up north feels like the best of both worlds. But if you still own a home, register to vote or hold a driver's license in your old state, you may still owe that state income tax — even while soaking up the Florida sun six months a year.

Florida has no state income tax. That's a big reason people move here. But "no state income tax" only applies to Florida residents. If your old state still considers you a resident, too, you can end up filing (and owing) in both places.

The fix isn't complicated, but it does require some legwork:

• Spend more than half the year here. Most states use a 183-day rule. Keep a simple calendar or travel log — it matters more than people expect if you're ever questioned.
• Move your legal documents. Your driver's license, voter registration and vehicle registration should all point to Florida.
• File a declaration of domicile. This is a short form at your local county clerk's office that formally states that Florida is your permanent home. It costs very little and takes only a few minutes.
• Update your estate documents. Your will, power of attorney and healthcare directive should be reviewed by a Florida attorney, since some states have different requirements.
• Cut the cord, don't just add a state. If your old state's tax authority sees you keeping a home, a library card, a doctor and a bank account there, they may argue you never really left. Some states are aggressive about this; it's worth taking seriously.

Homestead exemption: Don't leave this money on the table

If Florida is your permanent residence and you own your home, you likely qualify for the homestead exemption. It reduces the taxable value of your home for property tax purposes — often by $50,000 or more.

It also caps how much your assessed value can increase each year (called the Save Our Homes assessment limitation), even if your home's market value jumps.

A few things people miss:

• You have to apply — it's not automatic. The deadline is typically March 1 of the year you want the homestead exemption applied.
• The exemption only applies to your primary residence. A vacation condo or rental property doesn't qualify.
• The exemption is tied to you, not the house. If you move, you'll need to reapply at the new home. (Florida does allow you to carry over some of the Save Our Homes benefit, however. This is called "portability.")
• Other exemptions. Widows, widowers, veterans and people with disabilities may qualify for additional exemptions on top of the standard homestead benefit.

Other traps we often see

Estate and inheritance tax exposure from your old state. Florida has no estate or inheritance tax. But if you still own property, a business interest or certain accounts tied to a state that does, that exposure may not disappear just because you moved.

Insurance costs catching people off guard. Florida's homeowner's insurance market has gotten more expensive and, in some areas, it's harder to find coverage at all. This isn't a tax, but it's a real cost of living here that surprises transplants used to lower premiums up north.

Flood insurance is a separate policy and separate cost — don't assume it's included.

Assuming "no income tax" means "no taxes." Florida makes up revenue through other channels — property taxes, sales tax and insurance costs among them.

For most retirees, the math still favors Florida, but it's worth looking at your full picture rather than assuming income tax is the only line that matters.

Timing the move around tax season. If you move midyear, you may owe part-year taxes in your old state. Working with your tax preparer to time the transition — and to gather the paperwork trail (utility bills, mail forwarding, that declaration of domicile) — can save real headaches if your prior state asks questions.

The bottom line

Florida can be a genuinely smart move for retirees, both financially and for quality of life. I've watched it work out well for most people who plan for it properly.

The retirees who run into trouble are almost never the ones who moved here for the wrong reasons; they're the ones who assumed the paperwork would take care of itself.

If you're planning a move to Florida or you moved here and aren't sure you've closed the loop on residency, it's worth a conversation with both a tax professional and a Florida estate attorney before your first tax season here.

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• Is It Time for Retirees to Break Up With Bonds?

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, Social Security has served as a foundational piece of retirement income. But for younger generations, the program's outlook is changing, and those changes have significant implications for long-term financial planning.

With Social Security reserves expected to be depleted by 2033, millennials, Gen Z and subsequent generations will likely need to approach Social Security as an additional source of income rather than the cornerstone of a retirement strategy.

This article outlines practical strategies you can implement to help save enough for retirement, independent of Social Security.

Lifetime contributions may increase

To resolve funding shortfalls, policymakers may consider increasing payroll taxes or taxable wage bases. You may end up contributing more over your lifetime while receiving proportionally fewer benefits.

This is why effective tax-efficient planning is increasingly important. Focus on diversifying your retirement accounts, such as Roth, traditional pretax and taxable brokerage accounts, to help maintain flexibility under shifting policies.

Retirement timelines are becoming more dynamic

Another proposed solution is increasing the full retirement age, which could require younger workers to remain in the workforce longer before accessing full benefits.

Meanwhile, the costs associated with buying a home, paying off student loan debt and rising inflation are making it increasingly difficult to save for retirement.

You're facing a more complex financial background than previous generations and you should plan for a longer investment horizon. By staying invested for a longer period, you can help offset both delayed benefits and longer life expectancy.

Personal capital can help drive retirement success

For older generations, Social Security often covered a significant portion of retirement expenses. For younger generations, that dynamic is changing dramatically. Retirement outcomes are likely to rely heavily on consistent saving, disciplined investing and long-term portfolio growth.

Apart from getting started early, one of the best ways to help secure a comfortable retirement is to optimize your saving, investing and financial habits.

Maximizing the use of tax-advantaged accounts in the right order is one of the most efficient things you can do. The first step, if applicable, is to contribute enough to your workplace retirement plans to receive the full employer match.

From there, you should consider contributing to Roth IRAs and Roth 401(k)s, which can be beneficial during lower-income earning years, potentially allowing for long-term tax-free compounding. Health savings accounts (HSAs) can also offer additional tax-efficient advantages.

As income rises, increasing pretax contributions can help reduce taxable income while accelerating retirement savings. Combining these two strategies can help you work towards improving long-term outcomes and becoming financially independent.

Equally important is how you structure your investments. A high overall asset allocation in equities typically allows younger investors to leverage their time horizon to their advantage.

Behavioral discipline is also a key factor. If you can stay consistent, avoid emotional short-term market timing and maintain steady contributions, you will hopefully perform better over the long term compared to those who react to short-term volatility.

The bottom line

Social Security should still be part of your retirement picture — but not the foundation.

For younger investors, there is a clear shift from dependence on public benefits to ownership of private outcomes.

Those who recognize this early and invest accordingly may be better positioned to maintain control over their financial future, regardless of how the Social Security system ultimately evolves.

Ultimately, successful retirement planning is less about predicting changes and more about optimizing what you can control: Savings behavior, tax efficiency, investment structure and long-term discipline.

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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 often requires adopting a new mindset.

When you were saving for retirement, you were in the accumulation phase as you built wealth. Once you reach retirement, you move into the distribution phase where you begin spending those savings. This warrants a different approach to your financial decisions — and possibly a different adviser.

Just as doctors have specialties, so do many financial professionals. Those who concentrate on the accumulation phase are adept at helping you grow your money during your working years and finding ways to make the market work for you. Their view is long term — as it should be — because they are looking at your retirement from a distance.

Other financial professionals specialize in the distribution phase of retirement. They understand the strategies that can help you maximize your retirement income, improve tax efficiency and make your savings last. Their primary objective is to help you avoid the costly mistakes that can derail an otherwise well-planned retirement.

1. How much income will you really need?

As someone who works in the distribution phase, one of the first things I discuss with clients is what type of lifestyle they want in retirement.

Do they expect to be on the go, traveling to bucket-list locales or buying that boat they fantasized about for years? Or do they envision being a homebody, reading books, chatting with friends and babysitting the grandchildren?

Their answer helps determine how much income they will need, and income is the heartbeat of retirement. Without a sustainable income strategy, retirement plans can go awry.

That's why it's important to make sure your income aligns with your spending goals. Your sources of income may include Social Security, a pension, IRA withdrawals, dividends and interest, cash and rental property.

For example, if someone expects to spend $10,000 monthly in retirement, their withdrawal strategy should be tailored to that need. I always plan for the worst-case scenario and recommend budgeting for more than you will actually spend.

2. When will you claim Social Security?

One significant decision that affects retirement income is when you claim Social Security benefits. The federal government offers plenty of options but not a lot of guidance on this, so Social Security is another area where a conversation with an adviser who specializes in the distribution phase is helpful.

You can begin drawing Social Security as early as age 62 but at a reduced amount that remains reduced for life. There are also income limits if you plan to keep working.

If you wait until your full retirement age (67 for most people these days), you receive more money and there are no income limits. Finally, you can postpone Social Security up until age 70 and receive a larger monthly benefit.

Each claiming strategy has its own advantages and trade-offs, which is why there is no one-size-fits-all answer. The right decision depends on factors such as your health, life expectancy, income needs, tax situation and whether maximizing survivor benefits for a spouse is an important consideration.

3. Can you lower your tax burden?

Taxes may not have been a concern during your accumulation phase, but they could become one during the distribution phase. There are ways to reduce your tax burden in retirement, but if you're not careful, you could unintentionally increase it.

Roth conversions, for example, allow you to move money from taxable retirement accounts, such as traditional IRAs and 401(k)s, to a Roth account that isn't taxed.

It's better to start using them when you are still a few years away from your required minimum distribution age. You pay taxes when you make the conversion, but then your money grows tax-free and isn't taxed when you withdraw it in retirement.

Be careful about transferring too much money into a Roth in the same year, though. You could bump yourself into a higher tax bracket or even cause an increase in your Medicare premiums if your taxable income grows too high.

With the right planning, you can reduce your taxes, keeping more of your money to pay for your retirement needs and wants.

4. Have you thought about sequence of returns risk?

Sequence of returns risk is a potential shadow looming over many retirements — and it may be one of the most significant differences between the accumulation and distribution phases.

It's also another reason retirees need a financial professional who has distribution-phase experience.

Sequence of returns risk can be summed up this way: Before you enter retirement, the order in which your investment returns happen generally makes no difference.

For example, in a 20-year stretch, you can have weak years followed by strong years, or strong years followed by weak years, and at the end the total in your portfolio will be substantially the same.

This is not the case when you retire and are making withdrawals. If the market performs poorly in the first five to 10 years, that combination of market losses with withdrawals can severely drain your portfolio. By the time a recovery happens, you may not have enough in your accounts to capitalize on it.

On the other hand, if the market is strong in your first years of retirement and you are seeing growth even as you make withdrawals, you will be better poised to withstand a down market later on.

Sequence of returns risk is one reason people might want to revisit their investments as they approach retirement. One strategy is to reduce the level of volatility your portfolio faces.

5. And finally: Will you let yourself have some fun?

Many people are hesitant to spend money in retirement, watching pennies carefully and avoiding luxuries or anything even vaguely ostentatious. Remember what I said about retirement requiring a new mindset? That applies here as well.

People who lived frugally as they saved for retirement sometimes struggle to turn off that economical mental attitude when they reach the distribution phase.

They worry so much about running out of money that they risk missing out on the enjoyment these years they saved for can bring. I encourage them to spend that money, to reap the benefits of those years of frugality and to remember the adage they have heard their entire lives, "You can't take it with you."

Of course, they need clarity, structure and some level of comfort to make such a mindset adjustment. That's where the right financial professional comes into play, helping them achieve that comfort by discussing income plans, expenses and any legacy they want to leave behind for children, grandchildren or favorite causes.

The distribution phase can and should be the fun phase — if you let it.

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.

Your 70th birthday is a major milestone in your life. From a financial perspective, you now qualify for the highest Social Security benefits (if you waited to claim Social Security at 70) thanks to delayed retirement benefits and, if you worked until this age, potentially more higher-earning years, which can also translate to a higher Social Security check.

But it can also be a rough transition for retirees, who've spent decades saving up for this moment and now find it surprisingly difficult to watch their retirement savings go down — even if you've done all the planning and triple-checking to make sure your withdrawal amount is sustainable.

Whether you're worried about running out of money in retirement, overwhelmed by estate planning, or just generally unsure of how you should be approaching retirement planning when you're already retired, here's a financial checklist for your 70s to help you stay on track and feel more confident about enjoying your money.

1. Create a realistic spending plan and then spend your money

When you're still working, retirement planning is about identifying a healthy target number to save that will give you the lifestyle you want. By your 70s, "Retirement planning should be less about putting life on hold in the name of preservation and more about funding the experiences, and legacy that matter most," Nancy Anderson, Director of wealth planning programs at Key Private Bank, told Kiplinger.

While coming up with an annual spending amount on paper is fairly straightforward, shifting from a saving mindset to a spending mindset is much harder. To help make that behavioral shift, Anderson recommends:

• Create separate accounts for separate expense categories. As cash comes in from Social Security, distributions, and other income sources, fund your household expenses account first. Then, put the amount you've allocated for travel and hobbies in a separate account. That way, you can be confident that your essential costs are covered and you can see at a glance exactly how much you can afford to spend on travel and hobbies. "Knowing that money has been earmarked for a specific purpose can make spending feel more comfortable and intentional," Anderson explained.
• Claim Social Security now if you haven't already. While delaying Social Security can increase your benefits by up to 24%, "waiting beyond age 70 does not create additional value," she said. This guaranteed income isn't vulnerable to market volatility and can give you a spending floor — the minimum you'll be able to spend each month even if all of your other assets disappeared.
• Make a plan for required minimum distributions (RMDs). These kick in in your mid-70s and often catch retirees by surprise, warned Anderson. This can throw off your tax planning by increasing taxable income if you don't plan ahead for it. But there are strategies you can use to mitigate that if you get a plan in place before they kick in.
• Review your withdrawal amount annually. Your annual withdrawal amount isn't a "set it and forget it" number. Anderson recommends reviewing your spending amount annually to make sure it's still sustainable. "An annual review provides an opportunity to adjust spending based on market performance, inflation, and personal circumstances," she said.

2. Stress-test your finances annually

In addition to reviewing your withdrawal amount annually based on current market conditions and personal needs, Anderson recommends stress-testing your finances against possible future risks.

"Running stress tests that account for market volatility, inflation, healthcare costs, and longevity can help identify potential shortfalls before they become serious problems," she noted.

By examining all the "what if" scenarios you can think of, you'll see exactly how long your savings would last in each one. More importantly, you'll be able to come up with contingency plans and adjusted spending limits that account for those various risks.

"In many cases, relatively small changes can significantly improve long-term outcomes," Anderson said.

By running these stress tests annually, you can anticipate problems before they become serious and, in many cases, avoid needing to make drastic changes to your spending. "The sooner adjustments are made; the more options are available and the less dramatic the changes typically need to be," she noted.

This habit will replace those vague fears of running out of money with a concrete picture of how your savings would actually hold up under different scenarios and what adjustments you can make to address specific threats.

3. Plan your retirement in five-year chapters

The biggest risk in retirement isn't necessarily running out of money, according to Anderson. "Sometimes, it's about reaching a point where you no longer have the health, energy, or opportunity to do the things you want to do."

That's why she advises clients not to assume spending will remain constant from age 70 to 100. Instead, she recommends planning in five year chapters. Start by funding the experiences and bucket list adventures you know you'll regret postponing if health or other circumstances prevent you from being able to enjoy them later.

"Many retirees spend more in the initial phase because they have greater flexibility and often want to travel, pursue hobbies, or enjoy experiences they postponed while working," she said.

That higher spending up front might make you anxious if you're stuck in that saving mindset. But when you factor that into the plan by planning in five-year chapters and back it up with those annual reviews and stress tests, you can be confident that your overall spending plan is sustainable.

4. Put fraud protections in place before you're targeted

That generous nest egg you worked so hard to build makes you an attractive target to scammers and fraudsters. It also puts you at heightened risk of financial abuse — especially as you get older and start relying more on family to make financial decisions for you.

"Cognitive decline does not need to be severe before financial judgment begins deteriorating," warned Evan Farr, Certified Elder Law Attorney and retirement planner practicing in Virginia, Maryland, and DC.

Even before cognitive decline hits, modern technology is making scams harder to spot. So, taking proactive steps now can go a long way toward protecting yourself in the future. Some of the most effective strategies to do that, according to Farr, include:

• Enable transaction alerts on your bank and brokerage accounts so you can catch suspicious activity promptly.
• Set up multi-factor authentication on all of your financial accounts.
• Learn how to freeze your credit now so you can do it quickly when necessary.
• Make a rule that you'll discuss all major transfers or investment decisions with a designated trusted person, such as your financial planner or attorney, before taking action.
• Designate a trusted contact to be notified of suspicious transactions. Most major financial institutions will allow you to note this on your account so that if a bank representative notices signs of a scam, exploitation, or fraud, they can reach out to this trusted contact.
• Sign strong power of attorney paperwork now and make sure the person you name has the integrity and capacity to take on that responsibility.
• Be cautious about adding family members as joints on your accounts. Even if you trust the person fully, doing so can create conflicts later around ownership and inheritance that you never intended.

5. Reduce unnecessary financial complexity for your heirs

"Many people by age 70 have accumulated numerous bank accounts, brokerage accounts, retirement accounts, insurance policies, real property holdings, past beneficiary designations, passwords, and/or decades of documentation," Farr told Kiplinger.

While this might not be a problem for you, it can be a confusing maze of accounts and records to sift through for your heirs.

Farr recommends clients simplify their financial affairs as much as possible and leave a roadmap to make it easier for heirs to know what's what and where to look. That includes consolidating unnecessary accounts and maintaining an up-to-date account of assets and passwords. It can be helpful to do this with a financial planner so you can spot any old 401k or other accounts you might have forgotten about.

Lastly, Farr said to make sure you "inform those who will act on behalf of your client during incapacitation that the documentation exists and how they can obtain access to it."

6. Get more specific with your estate planning

In the past, it may have been enough to simply name a beneficiary or have a general plan for how your assets would be split up among heirs. As you get older, it's time to get more specific with your estate planning to prevent unnecessary conflict or obstacles when carrying out your final wishes.

According to Farr, "While it was previously sufficient to ask who would receive the decedent's assets upon death, today the decedents' estates must address how the assets will pass, who will administer matters should the decedent become incapacitated, whether probate may be avoided, whether an inheritance should pass directly to beneficiaries or remain protected within a trust arrangement(s), and whether the estate plan will lead to conflict amongst the beneficiaries."

You deserve to enjoy the retirement you saved up for

If you've been feeling too nervous to actually splurge on vacations or start embracing all of the hobbies and experiences you promised yourself you would enjoy once you retired, know that a lot of retirees struggle with that same anxiety.

But, by following the steps in this checklist every few years, you can ensure that the "permission to spend" amount you're working with truly is sustainable and that you'll be able to catch any shortfalls or issues early to adjust your spending long before you run any real risk of outliving your savings.

Doing the above steps with the help of a financial planner can help ease those fears even more as you'll know that an outside expert helped you come up with that realistic, sustainable spending amount.

Use the tool below to connect with a vetted financial professional who can help you stay on track and make the most of the retirement you planned for:

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For many successful executives, retirement looks nearly perfect on paper. The financial plan works. The calendar is open. There is time to travel, exercise and see family.

Then Monday morning arrives.

There is no leadership meeting, no urgent decision and no team waiting for direction. The title that once opened doors is now part of a biography. The daily signals of importance — calls, invitations and requests for judgment — begin to fade.

The traditional corporate career is also less predictable than it once was. Reorganizations, mergers, buyouts and layoffs can push executives toward the exit before they have given much thought to who they will become afterward.

Three traps often follow: holding too tightly to a former professional identity, assuming freedom from work will produce purpose, and filling the calendar with consulting, board work or another demanding role to recreate the old job.

This transition can also involve grief. A career provided meaning, recognition and a familiar measure of personal value. Losing that role can leave even a confident executive wondering: Who am I now?

When the title becomes part of you

In 2016, Carolina Migliaccio, 63, stepped away after more than 30 years in Fortune 500 brand strategy, innovation and design, including work with Kraft Foods and ConAgra Brands.

She began consulting. Two years later, she received an attractive offer for a senior corporate role. She turned it down.

"After three decades, my title and self-worth had quietly fused," she says. "When the title was gone, I had no language for what I was feeling."

She wanted work with meaning, even if it carried less corporate cachet. Yet she kept asking herself, "What would they think?"

The "they" were former colleagues who probably were not thinking much about her next move at all. "The identity free-fall definitely caught me off guard," she says.

It took about five years for her to feel grounded again.

"It perplexed me that a smart, successful executive like myself had no idea who I was," Migliaccio says. "I even questioned what I believed. Were my beliefs really mine, or had I become so indoctrinated by everything and everyone around me that I had lost my own sense of self?"

Migliaccio eventually built Soulful Moxie, an advisory practice focused on identity and leadership transitions. Her advice to people still deep in their careers is to begin loosening the bond between employer and identity before retirement arrives.

"Your job is just a part of what you do," she says.

Today, she is increasingly drawn to experiences and friendships. When a close friend turned 65, Migliaccio hosted a celebration at her home instead of simply arranging another dinner at a restaurant. It was a small example of a larger shift: She was making choices based on what felt meaningful to her, rather than what might impress someone else.

Beware the rush to stay important

Cohen Taylor has seen how quickly the retirement honeymoon can wear off. As a behavioral wealth specialist at Mission Wealth, she helps clients and advisers address the emotional side of money and major life transitions.

She shared two recent client stories. One East Coast couple in their late 50s left careers in finance and celebrated with an extended trip around the world. Coming home was harder. Everyday routines and family dynamics returned, but the structure of work did not.

A West Coast biotech executive reacted differently. After retiring around age 60, the executive quickly pursued another role because life without clear direction felt uncomfortable.

But don’t jump too fast. Consulting, board service, or a new job can be rewarding. The trap is making the decision primarily to quiet the discomfort of no longer being needed.

"If you’re pursuing a new role later in your career, remember that the compensation may not outweigh the constant travel and stress the new job might require," Taylor says. "Money is not everything."

She encourages clients to think about their values, relationships and preferred daily life before committing. A phased retirement can help. Reducing workdays, taking an extended vacation or testing a lighter schedule gives people a preview of life when work occupies less space.

Retirement also requires a shift in your financial mindset. People who spent decades accumulating wealth may start checking their account balances repeatedly once the paychecks stop.

"A number of mindset shifts will occur," Taylor says. "That’s normal."

The goal is to trust a sound financial plan while recognizing that some anxiety is human. Feeling uncertain does not mean the retirement decision was wrong.

Turn experience outward

Perry Solomon, 82, took a different path.

After running a high-end electronics business, he created the eco-friendly consumer-products brand ProSumer’s Choice and sold it in 2021. Today, he advises younger entrepreneurs through Solomon Growth Advisors in Santa Monica, CA.

His two daughters were not interested in joining his businesses, but they helped him broaden his view of legacy. Passing something on did not have to mean handing down a company; it could mean sharing judgment, family values, stories and focused time with his seven grandchildren.

His book, Grandpa Day, reflects more than 20 years of intentional time with them.

"I’m an advocate for retired executives to give back to the business community," Solomon says. "Share your wisdom and experience with younger generations through blogs, articles or books. You can still influence a lot of people in very positive ways."

Solomon remains active, but the purpose has changed. The work is less about proving his own success and more about helping other people build theirs.

A painful transition becomes a new mission

Atlanta resident Nancy Treaster’s reinvention began with caregiving.

Treaster was a senior software executive who managed a large support organization. As her husband’s frontotemporal dementia progressed, she reduced her travel and work responsibilities. She also helped care for in-laws with Alzheimer’s disease.

Eventually, the demands became too great, and she retired in August 2023.

Both her husband and father-in-law died in 2024. After years of work and caregiving, Treaster needed time to decompress. She also discovered that she still needed a mental challenge.

"I left Corporate America for good, but I still needed a project," she says.

That project became The Caregiver’s Journey, a nonprofit and "how to" podcast she co-founded with Sue Ryan.

Treaster had no clinical health care background. She did have years of experience solving problems, leading teams and navigating a fragmented care system. She completed a Certified Caregiving Consultant program and began turning her hard-won lessons into practical guidance for families.

The shift required her to let go of the compensation and status attached to her former role. Over time, the nonprofit stopped feeling like a bridge to something else. It became the work she wanted to do.

Treaster now points families toward hopeful brain-health research while avoiding false promises. The 2024 Lancet Commission estimated that about 45% of dementia cases worldwide are potentially attributable to 14 modifiable risk factors. That does not mean every case can be prevented, but it suggests that some risk may be reduced or the onset delayed.

Her larger message is practical: Get an accurate diagnosis, understand the type of dementia involved and give caregivers information they can use today.

Expect an emotional adjustment

As a retirement coach, I often see retirement unfold in stages:

The honeymoon: Relief and freedom.

Disenchantment: Boredom, restlessness, or feeling lost.

Reorientation: Testing new routines and forms of contribution.

Stability: Developing a life that feels natural rather than improvised.

There is no standard timetable. Some people adjust quickly. Others need several years. Both are normal.

Before accepting the first consulting offer or filling every empty day, create enough space to notice what you actually miss.

Is it the work? The people? The intellectual challenge? The authority? The income? The recognition?

Those answers lead to very different next steps.

Try a short purpose exercise

Try a little "values archaeology."

Think back to the person you were before the executive title. What originally attracted you to your field? Which problems energized you? Did you enjoy building teams, teaching, negotiating, inventing or helping people make difficult decisions?

Then look outside work. When no one was evaluating your performance, where did your attention go?

Your next purpose may grow from an old interest, a transferable strength or a problem you now feel ready to solve. Test it through a class, a volunteer role, a short project or a limited consulting assignment before making a large commitment.

Find your zone of genius

Chicago-based Migliaccio tells clients leaving corporate life to find their "zone of genius" and choose work that reflects their values rather than outside expectations.

"It’s your time to tap into who you really are and let the world know it," she says.

You are never too old to start something. You are never too young to think about what comes after the current career.

Be curious. Leave room to experiment. Retirement does not require you to abandon ambition. It gives you the chance to decide what your ambition is now.

"There is always another way — and often a better way," Migliaccio says. "But you need the time, space and support to discover it."

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"Should we move to Florida to save on taxes?"

As a CFP® and wealth adviser with more than 20 years of investment experience, I hear some version of that question from nearly every client approaching retirement in a high-tax state, and it's a fair one.

If you've spent decades building your savings, of course you want to keep more of it. States like Florida, Texas, Tennessee and Nevada have long attracted retirees because they skip state income tax entirely. Next to a high-tax state like Connecticut, New Jersey or California, the choice can look obvious.

After helping hundreds of families work through this decision, I've learned it rarely is. The tax savings are usually smaller than people expect, and the true cost of relocating is almost always bigger.

Recent changes in federal tax law have shifted the math even further. Before you list your house, it's worth running the numbers.

Here's what I walk clients through before they make the call.

The tax gap has narrowed

New federal legislation has changed how I evaluate a move for clients. A higher cap on the state and local tax (SALT) deduction, a new bonus deduction for eligible older taxpayers and a permanent federal estate tax exemption of roughly $15 million per individual all reduce the federal tax burden for many retired households.

None of that eliminates state income tax. But it does mean the gap between staying in a high-tax state and relocating to a no-tax one is often smaller than it looked just a few years ago, especially for clients who assumed the old rules still applied.

I've started running this comparison earlier in the planning process for exactly that reason: The answer clients got two or three years ago may not hold up today.

Consider a hypothetical couple pulling $90,000 from IRAs, $45,000 in Social Security and $20,000 in investment income. Depending on their deductions and how that income is structured, moving to a no-tax state might save them several thousand dollars a year, which is real money but rarely the whole story.

The moving costs add up fast

Clients focus on the annual savings and forget the one-time bill: Real estate commissions, closing costs, movers, repairs before listing, furnishing a new home, temporary housing and the cost of rebuilding a healthcare and professional network from scratch.

I've seen these add up to tens of thousands of dollars before anyone accounts for the stress of starting over.

If a move saves $6,000 a year but costs $60,000 to pull off, that's a decade just to break even. I want clients to see that number before they call a Realtor, not after.

You're not just leaving a state

The cost that's hardest to put on a spreadsheet, and the one I push clients hardest on, is distance from family. I've watched clients move south for the weather, then start flying back for birthdays, grandchildren's games and Sunday dinners they didn't expect to miss. The airfare and hotel bills climb, and some eventually move back entirely.

There's also the team you leave behind: Your financial adviser, tax preparer, estate attorney, insurance agent, doctors. You can rebuild that team, but it takes time, and a physician who knows your history or an adviser who's worked with your family for years provides continuity you can't buy on day one in a new state.

I've had clients spend the better part of a year finding a new cardiologist or estate attorney they trusted as much as the one they left, and that search has a cost even if it never shows up on a spreadsheet.

Moving isn't the only lever

Relocating is one way to lower your lifetime tax bill. It's far from the only one.

I regularly help clients cut their tax burden through Roth conversions timed to lower-income years, coordinating retirement account withdrawals, managing required minimum distributions (RMDs), tax-efficient investing, charitable giving and smarter timing of Social Security.

Done well, these strategies can produce meaningful savings while letting clients stay exactly where they are.

When a move actually makes sense

None of this means relocating is a mistake. I have plenty of clients for whom it was the right call: Their family had already scattered, healthcare needs were easy to meet elsewhere, housing costs fit their goals better, or the long-term tax savings genuinely outweighed the cost of getting there.

The difference is that those clients ran the numbers first. Before you decide, ask yourself what you'd actually save after every tax year, what the total moving cost would be, how long it would take to break even, how often you'd travel back for family and whether better tax planning could get you a similar result without packing a single box.

Sometimes those questions confirm that moving is the right move. Just as often, they reveal that staying put is the smarter financial decision — you just hadn't run the full comparison yet.

Retirement isn't about finding the state with the lowest taxes. It's about building a life you won't spend the next decade second-guessing.

When I walk clients through taxes, income, healthcare, housing, estate planning and family togetherness, the answer usually gets a lot clearer, and it isn't always the one they expected when they first asked about moving to Florida.

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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.

Sudden wealth doesn't change who you are. It does reveal how prepared you are.

I recently read a news story in which a lottery winner who received a jackpot worth more than $167 million had reportedly been arrested four times within 14 months of receiving the money.

Such stories often generate headlines because they reinforce the belief that sudden wealth changes people.

After more than 25 years as a financial planner, I don't believe that's entirely true.

I believe sudden wealth reveals whether someone has developed the habits and discipline necessary to manage it.

While lottery winners capture the headlines, they're among the least common examples of becoming suddenly wealthy.

Sudden wealth typically arrives in four main ways:

• Inheritance
• The sale of a closely held business (liquidity event)
• A significant legal settlement
• On rare occasions, a lottery or other unexpected windfall

Although each situation is unique, they all have one thing in common. Money that was once unavailable suddenly becomes accessible. That transition is both psychological and financial.

People who accumulate wealth over time (commonly decades) become accustomed to seeing money in their accounts and formulating successful financial and emotional discipline.

• They watch retirement accounts fluctuate with the markets without panic
• They realize that consistent contributions, compounding returns and time is what it took to get to a particular level

The goal is to make work optional through having a balance sheet that yields enough to replace your income.

For some, their balance sheets aren't there yet, or maybe they were never working toward financial independence, then one day the inheritance arrives or the settlement comes in. Whatever the source, the money is available, and it is now a spendable currency.

Real-life examples

I've watched families respond to this moment very differently.

Years ago, I worked with a blue-collar worker and father who spent his entire working life doing everything right. He lived modestly, saved consistently and built a meaningful estate because he wanted to leave something for his three children.

After his passing, two of the children requested checks rather than seeking guidance or developing a long-term plan. Within a couple short weeks, their inheritance was spent on a trip to Las Vegas. The third sibling made some responsible decisions, but within a relatively short period, those funds had also been depleted.

It would be easy to conclude they simply made poor choices. I see it differently. They inherited the money. They never had the opportunity to develop the habits that created it.

I've also witnessed the opposite. A client's mother accumulated substantial wealth during her lifetime and explained not only what she hoped her daughter and son-in-law would receive, but what she hoped the wealth would accomplish.

Today, they continue to manage those assets thoughtfully, taking disciplined annual distributions while preserving the portfolio for future generations.

The difference between these two families wasn't as much about the size of the inheritance. It was the mindset, and the steps below can help anyone with mental framing and decision-making related to sudden wealth.

4 steps to staying wealthy after experiencing 'sudden wealth'

1. Do nothing.

When a significant amount of money suddenly appears on your balance sheet, resist the urge to act.

In most situations, I recommend making no major financial decisions for four to six months. Don't purchase a vacation home, quit your job or make large investments simply because the money is available. The assets aren't going anywhere.

What often changes during that time is your perspective.

2. Understand what you have.

Before making any financial commitments, determine the tax consequences and legal obligations associated with your newfound wealth.

Depending on how the assets were received, there might be income taxes, capital gains taxes, inheritance taxes, trust provisions, estate planning implications or other considerations that affect what's truly available.

3. Decide what this wealth is meant to accomplish.

Start with your own household. Does this wealth provide financial independence or greater flexibility?

Once your household is secure, consider whether you want to help family members, support charitable causes or strengthen your community.

Finally, revisit your estate plan so your own legacy reflects your new financial circumstances.

4. Create a sustainable spending plan.

What lump sum amounts are immediately required? Evaluate what impact spending today has on future income.

Risk tolerance and time horizon will influence what amount of annual distribution is sustainable.

Look for articles on strategies and options on calculating a safe withdrawal rate and methodologies of creating a paycheck from your portfolio.

The real measure of success

After more than two decades helping families navigate life's biggest financial transitions, I've come to believe that sudden wealth isn't really about money. It's about stewardship.

Money can be transferred in a single day. The judgment required to preserve it often takes time to develop.

Whether your wealth arrives through an inheritance, the sale of a business, a settlement or an unexpected windfall, the greatest responsibility isn't deciding what to buy. It's properly preparing before starting to deploy your newfound resources.

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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.

Renovating a home to make it more welcoming for grandchildren doesn't mean sacrificing comfort, safety or design aesthetic. In fact, some of the best home improvements bridge the generational gap by combining "aging-in-place" functionality for grandparents with highly engaging features for kids.

These five ideas for high-impact, high-end home upgrades offer maximum appeal to grandchildren while providing long-term value, safety and comfort for grandparents.

1. The multigenerational home theater & media room

Converting a spare bedroom or basement into a media room provides a quiet escape for movies, reading or music. For tech-savvy grandchildren, it becomes the ultimate entertainment zone.

• For Grandparents: Installing comfortable, supportive and easy-to-exit reclining chairs makes movie nights accessible. Acoustic wall panels and high-quality soundbars improve dialogue clarity for those with mild hearing loss without needing to turn the overall volume to uncomfortable levels.
• For Grandchildren: High-performance gaming consoles, a large smart tv or projector and customizable smart lighting (such as color-changing LED strips) create an immersive hangout spot.

2. A low-maintenance, high-adventure backyard

Transforming a traditional backyard into a dynamic outdoor living space encourages kids to put down their screens and enjoy the outdoors, while ensuring the terrain remains safe and navigable.

• For Grandparents: Wide, level non-slip paved pathways (using materials like brushed concrete or textured pavers) reduce tripping hazards. Raised garden beds allow for easy gardening without bending down, and low-maintenance native landscaping reduces the physical strain of yard work.
• For Grandchildren: A well-integrated, custom play structure — such as an in-ground trampoline (which sits flush with the lawn, reducing fall hazards and keeping sightlines open) — provides endless active play. Just follow key safety tips. You can even add a basketball hoop and LED lights.

3. The ultimate bunk room (with smart built-ins)

Converting a guest room into a dedicated bunk room maximizes sleeping capacity for family visits while leaving plenty of floor space for daytime play.

• For Grandparents: Sturdy, custom-built bunk beds with integrated, wide staircases (rather than vertical, flimsy ladders) make it much easier and safer to help kids make the bed, change the sheets or tuck them in at night. Use washable paint and easy-to-clean fabrics to minimize mess.
• For Grandchildren: Bunks with individual reading lights, built-in USB charging ports, personal privacy curtains and dedicated toy storage cubbies give kids their own secret-fort-like retreat.

4. Zero-Threshold "wet room" bathroom

Upgrading a traditional bathroom to a modern, open-concept "wet room" with a curb-free shower is one of the smartest investments for aging-in-place that also feels incredibly luxurious.

• For Grandparents: Eliminating the tub ledge removes one of the biggest tripping hazards in the home. Slip-resistant textured floor tiles, a built-in teak shower bench and stylish, integrated grab bars (some look like high-end towel racks) ensure safe, independent bathing.
• For Grandchildren: A spacious wet room is perfect for rinsing off after a day of messy outdoor play. Features like dual showerheads — including a slide-bar handheld sprayer — make it simple to adjust the water height for toddlers up to teenagers. Although most toddlers and young children take baths, this feature can help grandparents who worry about lifting them in and out of the tub.

5. An interactive kitchen island & snack station

The kitchen is the natural heart of the home. Modifying your kitchen layout to include a double-sided, multi-level island fosters connection through cooking and baking.

• For Grandparents: Under-counter drawer appliances (like a drawer microwave or drawer refrigerator) eliminate the need to dig blindly in lower drawers or reach high above the stove. Pull-out pantry shelves and touchless faucets make daily food preparation physically easier.
• For Grandchildren: A lower counter tier on the island allows kids to safely pull up a stool to help bake cookies or do crafts. A dedicated under-counter "snack drawer" and beverage fridge stocked with kid-friendly drinks gives them the independence to grab their own snacks without needing assistance. Of course, this type of access is for older children; if your grandkids are still babies or toddlers, make sure your lower cabinets have safety locks.

It's all about having fun

At the end of the day, home isn't just about brick and mortar — it's about the memories, giggles and shared stories created inside its walls. Investing in your space to make hosting easier and more exciting is really an investment in family connection, opening the door to years of seamless visits and priceless traditions.

So bring on the blanket forts, the backyard adventures and the late-night movie snacks! With a home designed to welcome every generation with open arms, you’re all set to be the favorite destination for years to come.

Major home upgrades can make your space more enjoyable for the whole family, but they can also come with a significant price tag. A financial professional can help you determine how renovations fit into your retirement budget and longer-term financial goals.

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

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When most people hire a financial advisor, they think they are receiving comprehensive financial advice. Unfortunately, that assumption is not always correct.

Many financial advisors focus primarily on investments. Others specialize in insurance, taxes, retirement planning or estate planning. While expertise in any one area can be valuable, consumers often discover that financial decisions rarely occur in isolation.

A decision about investments affects taxes. A decision about taxes affects retirement planning. A decision about retirement planning affects estate planning. Every financial decision is connected to several others.

That reality helps explain why comprehensive financial planning has long been considered the highest standard of financial advice.

Gary Schatsky, founder of Independent Financial Counselors in New York City and former chairman of the National Association of Personal Financial Advisors (NAPFA), has spent more than four decades advocating for comprehensive, fee-only financial planning.

According to Schatsky, the fundamental challenge is that consumers often receive advice focused on a single area of their finances while the real opportunities and risks may exist elsewhere.

"You can't have someone who's closing one eye and focusing on one issue when investment allocation is no more important than tax planning, which is no more important than debt planning," he says. "They're all completely integrated."

That simple observation highlights one of the most important realities in personal finance: Financial success rarely depends on one decision. Instead, it depends on how all the pieces fit together.

What is comprehensive financial planning?

In my book AdvisorSmart for the Individual Investor, I describe comprehensive financial planning as a process that examines a client's entire financial life rather than focusing on a single product, account or investment decision.

A comprehensive approach considers goals, investments, taxes, retirement plans, insurance needs, estate planning, employee benefits, debt management, cash flow and other financial factors.

CFP Board, which sets and enforces the requirements for the CERTIFIED FINANCIAL PLANNER® certification, identifies several major planning disciplines, including:

• Financial statement analysis
• Insurance and risk management
• Employee benefits planning
• Investment planning
• Income tax planning
• Retirement planning
• Estate planning

A comprehensive financial planner evaluates how these areas interact and affect one another rather than treating each as a separate assignment.

Schatsky believes this holistic perspective is what separates professional financial planning from narrower forms of financial advice. "The goal is to know 360 degrees of someone's world," he says.

In his view, advisors should understand far more than a client's investment portfolio. They should understand family circumstances, tax situations, debt obligations, retirement goals, estate planning concerns, charitable objectives and other factors that influence financial outcomes.

Any advice they provide is cheapened if they don't know "100% of a client's financial world" and haven't considered it fully, he warns.

Why comprehensive advice produces better outcomes

Imagine two investors with identical investment portfolios:

• The first investor has no debt, lives below their means, maintains appropriate insurance coverage and has a well-designed estate plan
• The second investor carries high-interest credit card debt, lacks adequate insurance, has no estate plan and has significant tax inefficiencies

Although their investment accounts look identical, their financial situations are dramatically different.

A comprehensive financial planner would recognize those differences immediately. For the second investor, debt management advice may be more valuable than selecting a different mutual fund or making a minor portfolio adjustment. As Schatsky says, "I'd be happy to take money earning 3% and pay off a credit card [charging] 10%."

Similarly, effective tax planning can sometimes generate greater financial benefits than investment selection alone. Strategic Roth conversions, charitable giving strategies, tax-loss harvesting opportunities and proper asset-location decisions can create substantial value for investors over time.

The common thread is that these opportunities often fall outside traditional investment management.

The importance of asking better questions

Comprehensive financial planning begins with information gathering.

In my experience, a competent financial planner may ask dozens — or even hundreds — of questions before making major recommendations. The purpose is not to create paperwork. The purpose is to understand the client's complete financial picture.

Schatsky compares the process to solving a complex puzzle: "You need to have all of the skills. I need to see your tax return. I need to understand your debt. I need to know your family's situation. I need to understand all the factors."

Consumers should be cautious when advisors ask very few questions before making recommendations.

A financial plan built on incomplete information is likely to produce incomplete results.

If an advisor spends most of the meeting discussing investment products without thoroughly exploring goals, taxes, debt, insurance, retirement planning and estate issues, investors should consider whether the advice is truly comprehensive.

Why fee-only matters

Comprehensive planning becomes even more powerful when combined with a fee-only compensation model.

Fee-only financial planners are compensated directly by clients rather than through commissions generated from the sale of financial products.

The significance is straightforward.

When advisors are not paid to sell products, they are often in a better position to evaluate alternatives objectively.

For example, a fee-only advisor may recommend paying down debt instead of investing additional assets. They may recommend delaying the purchase of a financial product. They may even recommend retaining an existing investment rather than replacing it.

The focus shifts from product implementation to problem solving.

Schatsky believes this objectivity is essential: "The public needs impartial advisors."

The combination of comprehensive planning and fee-only compensation creates an environment where advisors can focus on identifying the best solution rather than the most profitable solution.

What consumers should look for

Investors searching for a financial advisor should ask potential candidates several important questions:

• Will you review my entire financial situation?
• Will you examine my tax returns?
• Will you evaluate my debt structure?
• Will you review my insurance coverage?
• Will you discuss estate planning issues?
• How are you compensated?
• Are there any financial products for which you receive commissions or incentives?

The answers can reveal whether an advisor is providing comprehensive financial planning or a more limited service.

According to Schatsky, consumers should seek financial advisors who embrace the responsibility of understanding every relevant aspect of their financial lives.

"If you're not getting skilled advice and comprehensive advice and impartial advice simultaneously," he says, "you're not getting what you need."

The future of financial planning

As technology continues to automate many investment functions, the value of comprehensive financial planning may become even more apparent.

Portfolio management is increasingly commoditized. Asset allocation models can be automated. Rebalancing can be automated.

What cannot easily be automated is the thoughtful integration of taxes, retirement planning, estate planning, insurance decisions, debt management, family dynamics and life goals into a coherent financial strategy.

That is where comprehensive financial planning continues to demonstrate its value.

More than 40 years after the modern fee-only movement began, the central idea remains remarkably simple: Investors deserve advice that considers their entire financial life.

As Schatsky puts it: "The public needs comprehensive advice."

For consumers seeking objective guidance and better financial outcomes, that principle remains as relevant today as ever.

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

Editor's note: This is the third article in a series in which Peter Newman, CFA®, of Peak Wealth Planning, shows you how to make the most of Employee Stock Ownership Plans (ESOPs). The first and second articles are Why High-Net-Worth Families Need a Financial Quarterback to Protect Their Wealth and Concentrated Company Stock in Your ESOP? Waiting to Diversify Could Tank Your Retirement.

Sally retired at 62 with $890,000 in her Employee Stock Ownership Plan (ESOP) and another $420,000 in her 401(k). The numbers looked solid. She'd done the math a hundred times. It was enough to cover expenses, maybe some travel, definitely that kitchen remodel.

Then reality hit. Health insurance before Medicare? $1,800 a month. Property taxes she'd overlooked? Another $6,500 annually. And because she'd claimed Social Security at 62, her monthly benefit was permanently reduced by roughly $750 every month for life.

The ESOP money was there. The 401(k) was there. But the plan wasn't. That gap turned what should have been a comfortable retirement into constant calculations of what she could and couldn't afford.

Here's what I've noticed: The difference between people who retire confidently and people who retire anxiously isn't about how much they've saved. It's about what they did — or didn't do — in the decade before retirement.

Your 50s are a critical window where you either build the foundation for sustainable retirement income or realize too late that your assumptions don't match reality.

Age 50-54: The foundation you can't skip

At 50, you're probably earning peak income, kids might be finishing college, and retirement feels distant.

But this is actually the most important time to create your first real retirement income forecast. Not a napkin calculation or a vague sense that things will work out. An actual projection accounting for your ESOP balance, your 401(k), maybe your spouse's retirement accounts, and what those numbers translate to in monthly income.

Why now? You might discover you're on track to retire at 61. Or you might find out that you need to work until 68. Both answers are valuable, but one of them requires a significant adjustment to your timeline. It's better to know that at 50 than 59.

This is also when you need to look at your debt and what financial obligations are competing for your money. I've seen too many people prioritize funding kids' college education while assuming their own retirement will take care of itself. Sometimes that works out. Often it doesn't.

The questions you should be asking:

• What's my realistic retirement budget, including health care costs?
• Am I on pace to replace my current income, or do I need to adjust expectations?
• What debts should I eliminate before retirement?
• Am I prioritizing retirement savings, or are other goals consuming resources I'll need later?

Getting clear answers at 50 gives you five years before diversification eligibility at 55 to course-correct if needed.

Ages 55-59: Strategic decisions that compound

At 55, you hit your first ESOP diversification eligibility. If you've been with your company for at least 10 years, you can now sell back up to 25% of your accumulated shares.

Say you've accumulated $800,000 in company stock. At 55, you could diversify $200,000, rolling it into an IRA where you can invest in something other than your employer's stock. You can take the cash directly, but there are significant tax consequences and potential penalties that make that option less attractive for most people.

This is also when major life events can change everything. A grandchild is born and you want to help with their education. You buy a second home. Someone gets a difficult medical diagnosis. These things are common, and they should trigger an update to your financial plan.

Between 55 and 60, you'll continue accumulating shares if you're still working, and you may have options to diversify small amounts annually. Whether that moves the needle enough to be worthwhile depends on your specific situation.

Ages 60-65: The pre-retirement pressure test

At 60, you can diversify up to 50% of your total ESOP account. This is your chance to shift half of your concentrated company stock into a more balanced portfolio before retirement.

Here's where planning becomes critical. Retiring before 65? You need a rock-solid plan for healthcare costs until Medicare kicks in. Those costs can easily run $18,000 to $24,000 annually for a couple.

Planning to retire before the full Social Security retirement age of 67? Understand what that costs. Claiming at 62 reduces your benefit by roughly 30% for life. Waiting until 70 increases it by about 24% compared to 67. That difference can mean tens of thousands of dollars annually when you might need it most.

This is also when your liquidity strategy becomes crucial. You need your expenses for the first one to three years of retirement covered by stable sources, such as money market funds, savings accounts or low-risk bond funds. Not your ESOP. Not aggressive stock funds that could crater 40% right when you retire.

Post-retirement: The plan continues

Retirement is when the ongoing management gets more complex. You've got multiple income sources that need coordination: ESOP distributions that might be delayed up to 24 months, Social Security, possibly a spouse's pension or 401(k), maybe an annuity.

And then there are taxes. What federal bracket will you be in? Will a large ESOP distribution push you into Medicare surcharges? Are you approaching 73, when required minimum distributions kick in and potentially force you into higher tax brackets than you'd planned for?

There's no one-size-fits-all answer. Every situation requires mapping out each income source, projecting taxes not just this year but for the next decade, and making strategic decisions about which accounts to spend from when.

The timeline nobody follows (but everyone should)

I get it. Planning across a decade feels overwhelming, especially when you're busy working, managing family obligations and living your life. But the cost of not planning systematically is usually much higher than the effort of doing it.

The people who retire confidently didn't necessarily save more than everyone else. They just understood the timeline and made strategic decisions at each phase instead of letting things happen by default.

If you're anywhere in your 50s with significant ESOP wealth, the question isn't whether you should be planning, it's whether you're going to start now or wish you had five years from now.

For readers looking to better understand how these strategies apply to their own situation, Peter Newman created My ESOP Planner — a resource focused on helping employee-owners plan for diversification, retirement income and legacy decisions. Learn more at www.myesopplanner.com.

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

While Roth conversions are often talked about in retirement planning, they aren't the right strategy for everyone.

For retirees with modest savings and no pension, leaving traditional accounts untouched until it's time to start RMDs can work well. But retirees with pensions face an entirely different tax reality.

In a recent article, Joe F. Schmitz, a CFP® and CEO of Peak Retirement Planning, explains why Roth conversions are so important for retirees with pensions. Schmitz is a regular contributor to Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation.

Check out these five questions to test your knowledge about Roth conversions, pensions and taxes.

Good luck! (Don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Related Content From Adviser Intel

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For decades, the traditional balanced portfolio has relied on stocks for growth and bonds for stability. The classic stock-and-bond allocation became the foundation of retirement investing because it offered investors a practical way to pursue long-term returns while managing risk.

But investing has evolved and today, we have access to solutions that didn't exist when the traditional portfolio was developed.

One product receiving increased attention is the registered index-linked annuity (RILA), prompting an important question: Should investors rethink whether traditional bond allocations are the only way to help manage portfolio risk?

The key is downside protection

Unlike bonds, which are influenced by interest rates and credit markets, a RILA may provide returns linked to the performance of a market index, such as the S&P 500, while providing a defined level of downside protection over a specified outcome period.

Many contracts today offer downside protection against the first 10% to 30% (or even 100% in some cases) of market losses over a six-year term while allowing investors to participate in the market's gains, subject to participation rates, upside caps or other contract provisions.

Protection features are subject to contract terms and limitations, and investors can still experience losses.

Portfolio construction should evolve as investment solutions evolve. For years, investors had two primary choices for long-term assets: Stocks for growth potential and bonds for stability.

Additional tools

Today, investors have additional tools that may deserve consideration depending on their objectives.

That shift has led many advisers to think less about replacing one investment with another and more about expanding the conversation. Whether a RILA, bond allocation or other strategy is appropriate depends on an investor's objectives, risk tolerance, liquidity needs, time horizon and tax circumstances.

Rather than viewing a portfolio as consisting of only two buckets (growth potential and stability), some advisers now view buffered investment strategies as a potential third category, positioned between traditional equities and fixed income.

Worth evaluating

For investors seeking growth potential with a predetermined level of downside protection, that middle ground could offer an alternative worth evaluating.

The goal isn't to declare that one investment is universally better than another. It's to ask whether the traditional portfolio deserves a fresh look.

Investors today have more choices than previous generations, and sometimes the best solution is one that didn't exist when conventional wisdom was established.

RILAs are not appropriate for everyone.

• Investors generally forgo dividends
• Upside returns may be limited by participation rates or caps
• Downside protection applies only according to the contract's terms only if the contract is held through the applicable outcome period

Most contracts also include surrender charges during the early years, and withdrawals from nonqualified contracts are generally taxed as ordinary income to the extent of earnings.

In addition, distributions taken before age 59½ may be subject to a 10% federal tax penalty unless an exception applies.

Bonds continue to play an important role for many investors by providing income, liquidity and diversification. The point is not that bonds have become obsolete. Rather, it is that today's investors have more choices for managing risk than they did a generation ago.

Perhaps the conversation is no longer simply about stocks vs bonds. Maybe it's time to consider whether modern portfolio construction includes a third bucket —one designed to bridge the gap between growth potential and downside protection. For many investors, that conversation may be long overdue.

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• I (Used to) Hate Annuities: Then I Looked at the Math
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• Too Scared to Dive Into a Fixed-Rate Annuity? Interest Rates Make It Worth Dipping Your Toe In

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.

Americans who are over the age of 55, mainly baby boomers, own more than half of the country's wealth. Over the next two decades, it will be passed down to the generations that follow, marking the greatest wealth transfer in our country's history.

While many of us look at inheritance as something purely for the wealthy, 66% of Americans either expect to or have already received an inheritance from their parents, according to a survey from Choice Mutual.

Receiving any kind of inheritance can be overwhelming, and being unprepared can lead to losing much of that money to poor financial decisions or taxes. If you think you may be a part of the Great Wealth Transfer, either as a provider or a beneficiary, here's how to avoid those pitfalls.

1. Start conversations now

One of the biggest issues with the trillions of dollars expected to be passed down during the Great Wealth Transfer isn't the money itself, but beneficiaries being unprepared to manage the assets they receive.

Although it may be uncomfortable, discussing the plan for these ahead of time helps family members know exactly how much they will receive and what taxes they might expect.

If beneficiaries don't have a chance to discuss the inheritance before their loved one passes away, they may end up making important decisions while they're grieving.

Bringing the topic up well beforehand will give them time to plan before their emotions take over, helping reduce the likelihood of poor decisions or impulsive spending.

Some of the most successful inheritances I have seen are among families who prioritize these conversations.

2. Avoid spending sprees

If you suddenly receive a windfall, it can be tempting to spend money on the things you've always dreamed of. You may want to buy a bigger house, a more expensive car or finally take that extravagant vacation. But going on a shopping spree can lead to disaster.

Your dream items will come with additional costs, such as taxes, insurance and maintenance, and those will stick around long after the initial purchase.

You should look at your inheritance as a long-term investment, not an excuse for a one-time splurge. If you have a good plan for the assets, they should help provide financial security for years.

Using the money to pay down any debts you have or starting an emergency fund is much more valuable than spending it on an asset that will eventually lose its value.

3. Consider tax implications

While the tax implications that come with an inheritance will depend on what you inherit and where you live, receiving an inheritance can trigger estate, capital gains, inheritance or income taxes.

For example, while many people may believe they will owe federal income taxes on any inherited money they receive, that may not be the case. Cash that is passed down from a person who has passed away is not considered taxable income for the beneficiary.

If you are gifted a property as an inheritance, receiving it is not taxed in most cases. However, depending on how you plan to use it, you need to consider a few things:

• Ongoing property taxes, insurance and maintenance costs
• Capital gains tax if the property value increases significantly before it is sold
• How you will use the property (personal, investment, rental) determines which tax deductions you can take

Most people don't have a full understanding of which processes will be triggered when estates are handed down. It's important to work with a financial professional before signing anything.

4. Build a strong team

Being part of the Great Wealth Transfer may be life-changing, but it could also be overwhelming. You may be faced with financial decisions you've never had to navigate before.

Having a strong team of professionals, such as a trusted financial adviser, tax professional or estate attorney, can help everyone involved avoid costly mistakes and create strategies that align with their goals.

A large inheritance is a life-changing event, and surrounding yourself with the right people can be the difference between enjoying it and watching it disappear.

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• Four Things to Know About Managing a Loved One's Finances
• I'm a Financial Planner: Here's How to Make the Most of Your Charitable Giving on a Budget

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 ultra-wealthy don't just have more money than 62% of Americans. They have a handful of estate-planning secrets to help protect and pass on their wealth. From revocable trusts and Roth conversions to tax-efficient investments, these high-level tactics are designed to minimize taxes, shield assets, and create a lasting legacy.

And what a legacy. Baby boomers are expected to pass down $84.4 trillion to their heirs by 2045 as part of the "Great Wealth Transfer." Roughly half of that amount will come from high-net-worth and ultra-high-net-worth households. The good news? Many of the proven strategies used by these households can be adapted by retirees with modest incomes, without breaking the bank.

Matt Odgers, co-founder of Opelon LLP, says one of the biggest misconceptions is that estate planning is a tax strategy used only by the wealthy. "For most retirees, it has nothing to do with tax. What wealthy families are really buying is control and privacy; it's a clean handoff, and those things cost the same for everyone."

Here are 8 powerful estate planning secrets the rich actually use that you can realistically "steal."

1. The revocable living trust

The ultra-wealthy rarely let their assets go through probate. Instead, they place most of their major assets, including homes, investment accounts and other property, into a revocable living trust, Odgers says.

“The wealthy aren't leaning on a will. A will does not avoid probate, and probate is generally slow, public, and costly. A revocable living trust does the quiet work instead.”

How you steal it: Place major assets in a revocable living trust to avoid probate and allow a seamless transfer to your heirs. A living trust is flexible and can be set up easily with an attorney for about $400–$4,000. Then, “fund” the trust by transferring your house, bank accounts, and other assets into the trust’s name. Don't worry. The trust can be changed or revoked anytime during your lifetime, giving you full control while also protecting your family from the hassle of court delays and probate (and high fees) later.

2. The gift tax exclusion

The ultra-rich understand that making a gift or leaving their estate to their heirs doesn’t ordinarily affect their federal income tax, according to the IRS(pdf). With a bit of strategic planning, they avoid tax implications by using both the annual gift tax exclusion and the lifetime exemption, while shielding their wealth from future tax increases.

How you steal it: You don’t need to be rich to benefit from the annual gift tax exclusion. In 2026, you can gift up to $19,000 per recipient (child, grandchild or anyone else) completely tax-free. A retired couple can gift $38,000 per person annually. Over 10–15 years, this can move significant money out of your estate while helping your loved ones when they need it most.

3. Spousal Lifetime Access Trusts (SLATs)

A SLAT is an irrevocable trust that one spouse creates for the primary benefit of the other spouse. Ultra-wealthy couples use SLATs to remove assets from their estate while still allowing their spouse to receive income or even principal from the trust if needed during their lifetime.

How you steal it: Create an irrevocable trust for your spouse by transferring assets, such as cash, investments, or property, into the trust. That removes the assets from your taxable estate immediately. Your spouse can serve as a beneficiary and can access the funds if needed during their lifetime. This is particularly useful for retirees who want to shield their assets from the high costs of long-term care or future changes in tax law.

4. Life insurance

Permanent life insurance — either whole or universal life — is a favorite strategy among the wealthy because it passes money to heirs completely income tax-free. To maximize this benefit, high-net-worth families often avoid owning policies directly. Instead, they place them inside an Irrevocable Life Insurance Trust (ILIT). When structured properly, an ILIT keeps the death benefit out of the taxable estate, giving heirs tax-free cash to cover estate duties, debts or living expenses without forcing a fire sale of the family home or core assets.

How to steal it: Use permanent life insurance placed in an Irrevocable Life Insurance Trust (ILIT) to leave tax-free money to heirs while keeping it out of your taxable estate. You can often cover the premiums using your annual gift tax exclusion. In the end, you get to leave behind tax-free money for your family while protecting the assets you've worked so hard to build.

5. Family LLCs

By bundling assets — such as real estate or a family business — into a Family Limited Liability Company (Family LLC), the ultra-rich can transfer non-controlling shares to their heirs over time at a discounted valuation. This strategy lowers the gift's taxable value, preserving more of the owner's lifetime exemption and reducing future estate taxes.

How to steal it: Even with more modest assets, you can set up a Family LLC with the help of an estate planning attorney. But the main point is that anyone can benefit from holding assets in entities like trusts or family LLCs. “Heirs can secure access, enjoyment, and management without direct ownership,” says estate planning attorney Kevin Quinn, President at Legacy Counsellors, PC. “This structure shields wealth from creditors, divorces and lawsuits, while ensuring a structured legacy for future heirs.”

6. TOD and POD designations

Transfer-on-Death (TOD) and Payable-on-Death (POD) designations on brokerage accounts, bank accounts, certificates of deposit (CDs), and even some vehicles allow funds to be transferred directly to a beneficiary upon the account holder's death, bypassing probate. Many people overlook TOD and POD designations in estate planning — but not the wealthy.

How to steal it: Setting up TOD and POD designations on your accounts allows assets to transfer directly to beneficiaries upon your death, bypassing probate. Through your financial institution, you choose your assets, fill out a form and name your intended recipients.

However, because TOD and POD designations supersede instructions in a living trust, they must be carefully coordinated. For the best protection, complex assets like real estate are placed in the trust, while simpler accounts — such as checking, savings or CDs — can name the revocable trust as the TOD or POD beneficiary. This keeps your cash out of probate while ensuring every dollar is distributed according to your estate plan.

7. Roth IRA conversions

It's no surprise that the ultra-wealthy are obsessed with managing future taxes and carefully time their Roth conversions to pay taxes when the rate is lowest, giving their heirs tax-free money down the road.

How to steal it: Ryan Maynard, Managing Partner at Vaquero Private Wealth, offers this advice. “Convert traditional retirement money to a Roth during your low-income years — often the stretch after you stop working but before Social Security and required minimum distributions (RMDs) begin. In those years your taxable income can be unusually low, so you convert at a very low ordinary rate and move that money into a Roth, where it grows and comes out tax-free for the rest of your life and for your heirs.” This strategy works especially well for retirees with smaller nest eggs.

8. Long-term capital gains

The ultra-wealthy value long-term capital gains because they are taxed at much lower rates than ordinary income. By holding investments for more than one year, they can pay significantly less tax on their profits. Besides that, they can afford to hold assets for years or even decades because they don't have to rely on selling them to cover daily living expenses.

How to steal it: Try to hang onto your investments for at least a year before you sell them. You’ll often qualify for the lower long-term capital gains rates, which are usually 0%, 15%, or 20%, instead of getting hit with regular income tax rates. You don't need to be ultra-wealthy to take advantage of this. “It is one of the most valuable breaks in the tax code,” Odgers adds, “and it is not based on your estate size.”

Use the best strategies for you

You don't have to copy the ultra-wealthy exactly. Mixing and matching just a couple of these ideas can make a real difference and protect your savings, cut taxes, and leave more for the people you love.

Trent Von Ahsen, CFP®, and Managing Partner at Cedar Point Capital Partners, offers a final word. “There are clearly some differences, but I do think the biggest misconception about estate planning is that it's only for the ultra-wealthy. Affluent families may use some sophistication. But overall, I'd say the same underlying principles are available to basically anybody."

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Roth conversions have become one of the hottest topics in retirement planning. Browse financial headlines long enough, and you'll likely encounter conflicting advice.

Some experts argue that everyone should convert their traditional IRA to a Roth. Others insist it's a costly mistake. The truth is far more nuanced.

As a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that for most Americans, a Roth conversion probably isn't necessary. However, retirees with pensions often live by a different set of tax rules (I wrote a book for those with pensions, The 2% Club, that you can request for free here.)

Their guaranteed income can create tax challenges that don't apply to the average retiree, making Roth conversions worth a much closer look.

Before deciding whether a Roth conversion belongs in your retirement strategy, it's important to understand the factors that actually determine whether the math makes sense. You can learn more about this in my YouTube video:

The only question that really matters

Many investors focus on whether they can afford to pay the taxes on a Roth conversion today. While that's certainly part of the equation, it isn't the deciding factor. The more important question is this: Will your total tax rate be lower today than it will be later?

That "total tax rate" extends beyond your federal income tax bracket. A Roth conversion can also influence:

• State income taxes
• Medicare IRMAA surcharges
• Social Security taxation
• Capital gains taxes
• Estate planning outcomes

When viewed together, your true tax cost could look very different than your federal bracket alone suggests.

Why most people don't need a Roth conversion

For many retirees, taxable income will naturally decline when they stop working. Someone who retires with modest retirement savings, no pension and Social Security as their primary income source usually remains in relatively low tax brackets throughout retirement.

In those situations, paying taxes today through a Roth conversion could result in paying more tax than necessary.

Roth conversions are frequently overpromoted, as they can be powerful, but they aren't universally beneficial.

Pension holders face a different tax reality

Rather than seeing their income in retirement decline, retirees with pensions often have multiple sources of guaranteed retirement income arriving simultaneously:

• Pension payments
• Social Security benefits
• Required minimum distributions (RMDs) from traditional retirement accounts

Each source adds taxable income, and together they can keep retirees in higher tax brackets for decades.

For households that have accumulated substantial balances in tax-deferred accounts, such as 401(k)s, IRAs, TSPs or 403(b)s, RMDs can make the situation even more challenging as they grow over time.

That's why many pension recipients find themselves paying as much, if not more, in taxes during retirement than they did while working.

Today's tax environment creates planning opportunities

Another consideration is today's tax landscape: Current tax laws provide relatively favorable tax rates and expanded standard deductions compared with historical norms.

While no one can predict future legislation, many economists expect government revenue needs to increase over time because of rising national debt and the long-term funding challenges facing programs such as Medicare and Social Security.

If future tax rates eventually rise, converting portions of traditional retirement accounts while rates remain relatively low could produce meaningful lifetime tax savings. The objective isn't simply to pay taxes sooner, but to pay them when they're expected to be lower than they otherwise would be.

Don't look only at your tax bracket

One of the biggest mistakes retirees make is evaluating Roth conversions using only the federal tax tables. Your retirement tax picture is much more interconnected.

Increasing taxable income through a Roth conversion could:

• Cause more of your Social Security benefits to become taxable
• Push you into a higher Medicare IRMAA bracket, increasing Medicare Part B and Part D premiums
• Raise your capital gains tax rate
• Increase state income taxes

This is why comprehensive tax planning frequently produces better results than simply converting up to the top of a particular tax bracket.

The widow's penalty can create future tax problems

Married couples regularly overlook one significant future risk: When one spouse dies, the surviving spouse generally transitions from married filing jointly to single tax status. At that time:

• Tax brackets and IRMAA thresholds shrink
• The standard deduction lowers
• One Social Security benefit typically disappears
• The surviving spouse often continues receiving pension income and RMDs

The result can be substantially higher taxes for the surviving spouse. Completing Roth conversions while both spouses are alive allows couples to take advantage of the wider married tax brackets before this transition occurs.

Your children's tax situations matter, too

If leaving money to your children is one of your goals, their future tax bracket deserves consideration as well.

Under current law, most non-spouse beneficiaries must empty inherited retirement accounts within 10 years. A child inheriting a large traditional IRA might be required to recognize hundreds of thousands of dollars of taxable income during that period, potentially pushing them into significantly higher tax brackets.

On the other hand, if your children are likely to remain in relatively low tax brackets, leaving them traditional retirement assets instead of paying higher taxes through Roth conversions today could prove more efficient.

Estate planning isn't one-size-fits-all, and understanding your heirs' financial circumstances is an important part of the analysis.

Tax diversification provides flexibility

Many retirees have accumulated the vast majority of their wealth inside tax-deferred retirement accounts, and that creates a challenge. Every dollar withdrawn becomes taxable income, leaving retirees with limited flexibility when tax laws or personal circumstances change.

Building assets across multiple account types — including traditional retirement accounts, Roth accounts and taxable brokerage accounts — creates what many planners call tax diversification.

Having multiple "tax buckets" allows retirees to decide where retirement income comes from each year, making it easier to adapt to changing tax laws, Medicare thresholds or unexpected expenses.

Where you live can affect the timing

State taxes can also influence whether a Roth conversion makes sense. Someone planning to relocate from a high-income-tax state to one with no state income tax could benefit from delaying Roth conversions until after the move.

Conversely, someone expecting to move into a higher-tax state might decide to accelerate conversions before relocating.

State taxes generally receive less attention in planning than federal taxes, but they can meaningfully affect lifetime tax costs.

A common Roth conversion myth

One objection frequently raised against Roth conversions is that paying taxes today means losing years of investment growth. That argument overlooks an important concept: Taxes on a traditional IRA already represent a future liability.

Paying that liability earlier doesn't necessarily reduce long-term wealth if tax rates remain unchanged — it simply satisfies the government's share sooner.

Where Roth conversions can create additional value is by reducing future RMDs, potentially lowering Medicare premiums, limiting Social Security taxation, providing greater withdrawal flexibility and protecting against higher future tax rates.

The comparison isn't simply about investment growth — it's about maximizing what you keep after taxes over the course of retirement.

The bottom line

Roth conversions aren't appropriate for everyone. In fact, many retirees with modest savings and no pensions might be better off leaving their traditional retirement accounts untouched.

Pension holders, however, ordinarily face a different reality. Guaranteed income, RMDs and long retirement horizons can create tax burdens that make proactive planning far more valuable.

Rather than asking whether Roth conversions are "good" or "bad," ask a better question: Will paying taxes today likely cost less than paying them later?

For retirees with pensions and substantial retirement savings, the answer is often worth exploring through a comprehensive, long-term tax strategy that considers not only income taxes but also Medicare premiums, Social Security taxation, estate planning and future tax flexibility.

Because when it comes to retirement, it's not just about how much you've saved — it's about how much you'll ultimately keep.

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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.

Annette Kruzynski, a 79-year-old retiree from West Hempstead, N.Y., used to think her 401(k) survived the dot-com bust, the Great Recession and the COVID pandemic because she moved all her money to cash. She proudly told anyone that being in CDs, bonds and money market accounts saved her from the massive sell-offs in the stock market.

But in hindsight, she knows she was wrong. "I wish I didn't keep everything safe," says the retiree and grandmother of five. "I think if I had invested, I would have had much more money saved."

Kruzynski can't change the past, but she and other retirees can help future generations avoid similar mistakes, particularly their millennial children, the oldest of whom are turning 45 this year.

It's a prime age to take your finances seriously and, more importantly, hear some sage advice. At this point, you're typically in the peak earning years (or about to enter them) and still have time to build a nest egg. You're also likely juggling multiple expenses, making it difficult to save.

"In your 40s is where everything starts to become a priority, and those priorities for spending are competing with each other," says Pam Krueger, founder and CEO of Wealthramp, a free service that matches consumers with fee-only fiduciary financial advisers. "This is where money decisions start to have bigger consequences."

Today’s 45-year-olds may think they have it all figured out, but the retirees who have come before them know better. Having learned the hard way, these older adults want to spare the younger generation the pain, knowing that preserving family wealth starts with avoiding costly mistakes. Whether it's investing, saving, or spending, here are the crucial, hard-earned lessons retirees and financial professionals say 45-year-olds need to know.

Investing: Siloed accounts and too much risk

Even if 45-year-olds have figured it out by now and are contributing to their 401(k)s and IRAs, financial pros say some common mistakes still linger, including these:

Viewing your retirement accounts in silos. Treating your and your spouse's different retirement accounts as separate, standalone investments rather than a unified portfolio could result in additional fees or overexposure to a single market segment. "You might not have diversification, you might pay three times in fees or your returns may be beaten down because you didn't coordinate," says Krueger. "It's important to clean up, organize and have a clear view of the accounts consolidated in one place."

Taking on too much risk or being too conservative. This might be the age of the buy-and-hold Millennial, but there are plenty of 45-year-olds investing in crypto, meme stocks or other speculative investments. "People buying the next hot, shiny thing and taking unnecessary risk is the worst action I see, especially with retirement money," says Derrick Longo, a financial adviser at Savant Wealth Management in Huntersville, N.C. "A lot of people will hear something on social media or from a friend, and they let that influence their investment strategy. They might get a short bump, but in the long term, it doesn't keep up with market returns."

If you want to make speculative investments, Longo says, do it with money you can afford to lose. On the flip side, taking too little risk can also be detrimental to a 45-year-old's investment portfolio. With 20-plus years left in the workforce, a 45-year-old can afford to have more growth — and more risk — in their 401(k) than a 55- or 60-year-old.

Having been a little too conservative is one thing Sharon and Roger Gibbs wish they could change. The married retirees worked for the state of California for over 30 years and retired in their mid-50s. "Thinking back to age 45, we probably should have been more of a risk taker, but we’re pretty conservative. We regret not renting out a cabin vs selling it at one point," says Sharon, 73, who lives with Roger in Watersound, Fla. "But, for us, our jobs were our investment for our future. We were told by so many people, ‘If you can retire early, do it; you never know what tomorrow brings.’ "

Saving: Standing still on contributions and matches

In the age of the automatic 401(k) enrollment, many 45-year-olds don't have a choice when it comes to saving for retirement, granted that they work for a company that offers one. But that doesn't mean they don't make costly mistakes. One is not contributing enough to get the company's 401(k) match. That's free money they're leaving on the table.

Another mistake is leaving their contribution rate steady instead of automatically increasing it. Most plans offer the ability to automatically increase your savings rate by 1% each year. You can also have your plan increase contributions when you receive raises and bonuses.

Failing to save more aggressively is one of Kruzynski's primary regrets. In addition to being too conservative, she wishes she had contributed more to her 401(k). She worked for over 30 years, and while she has enough money to live comfortably in retirement, she could have had more cash to travel and to leave to her heirs. "Not adding more money to my 401(k) was a mistake," says Kruzynski.

Spending: Living on the edge with a 40-something budget

Many retirees remember all too well how managing their spending in their mid-40s was a constant exercise in discipline. Between paying down mortgages and funding children's educations, a multitude of expenses pull at the household budget all at once. When trying to manage it all, it was easy to make mistakes. A big one that throws everything else off course is winging it, says Michael Conrath, JPMorgan's chief retirement strategist. They have a vague idea of their monthly expenses and savings goals, but nothing concrete.

"On the fundamental level, they need to ask themselves, how much do I spend monthly, what are my known expenses and what do they cost me?" said Conrath. "It's important to have that foundation."

Lots of 40-somethings also live beyond their means, worrying about saving later. "They tend to believe they will keep earning the same amount they are right now and when you make that assumption, you might go for the bigger house or the bigger and better car," says Krueger. "You're living on the edge of your budget instead of putting that money to work."

The view from the finish line

Making sense of money in your 40s is a balancing act with the financial realities of spending and saving pulling you in different directions. While the oldest Millennials may feel they have plenty of time to fine-tune their investing, saving, and spending strategies, retirement will arrive before they know it. That's why it's so important for them to listen to the hard-earned lessons of the retirees who came before them. After all, sharing their lessons on unified investing, disciplined spending and aggressive saving is the best way to protect everyone's wealth.

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

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Some of the saddest meetings I have aren't with couples. They're the ones where a client comes to see me for the first time after losing their spouse.

After nearly 30 years as a financial adviser, I've noticed a pattern. In most marriages, one spouse becomes the family's de facto chief financial officer. They know where the accounts are, when the required minimum distributions begin and why certain beneficiaries were chosen. The other spouse understands the big picture, but not always the details.

When the spouse who handled the finances passes away, the survivor isn't just grieving. They're suddenly responsible for a financial life they may never have expected to manage, often while well-meaning family members and financial institutions are pushing them to act fast.

In my experience, the families who fare best aren't the ones who move the fastest. They're the ones who slow down and think it through.

Resist the urge to do everything immediately

Aside from getting certified death certificates and handling immediate household needs, very few financial decisions have to be made in the first few weeks.

I've watched surviving spouses notify every financial institution within days of a death, only to find out that a pension payment, dividend check or insurance reimbursement is still coming payable to the deceased spouse.

Once an account is restricted, negotiating that payment gets far more complicated than it needs to be.

Gather information first. Meet with your financial adviser, CPA and estate planning attorney before making decisions that could be difficult or impossible to reverse.

Your beneficiary designations just changed

Retirement accounts, annuities and life insurance policies pass according to their beneficiary forms, not your will or trust. That makes them one of the first things worth reviewing.

I often see clients who named their living trust as the beneficiary years ago. Depending on your situation, naming individual beneficiaries instead can be simpler for your heirs to administer.

There's no universal right answer here, which is exactly why it deserves a real conversation with your adviser and attorney rather than a quick assumption.

Don't let the widow's tax catch you off guard

Here's a planning window most people miss: For the year your spouse dies, you can still file as married filing jointly. The following year, you'll typically file as single, where the tax brackets are considerably less favorable. Advisers call this the "widow's tax" or the "widow's penalty."

That one-year gap can be an opportunity to convert some, or all, of a traditional IRA to a Roth IRA while you still qualify for the wider joint-filer brackets. The catch is timing: The conversion generally has to be done by December 31 of the year your spouse passed away. If your spouse dies later in the year, that window shrinks fast.

Don't make this decision in isolation. The 2025 tax law changes, including the new $6,000 deduction for older people and the updated SALT deduction, can change the math on a Roth conversion. Loop in your CPA before you convert a dollar.

Don't rush into a spousal rollover

I see this more than almost any other misstep: A surviving spouse moves an inherited IRA into their own IRA right away because it feels like the obvious next step. Sometimes it is. Often, it isn't.

There's no deadline requiring a spousal rollover. If you're younger than 59½ and need access to retirement money, distributions from your own IRA are generally hit with a 10% early withdrawal penalty.

Distributions from an inherited IRA owned by a surviving spouse generally avoid that penalty. Once you complete the rollover, that flexibility is gone. Wait until you actually know which option fits your situation.

Give your estate plan a second look

Your estate plan was written for a different chapter of your life. Have your attorney review your living trust, power of attorney, HIPAA authorization and healthcare directive to confirm the people you named are still the right people.

If your trust is older, it may require setting up a bypass, or "B," trust when the first spouse dies. That provision made sense when the federal estate tax exemption was much lower.

Now that the exemption has been raised to $15 million per individual in 2026, many families no longer need that structure, and keeping everything in the A trust may be simpler if your estate falls under that threshold.

This is a decision to make with your attorney, not on your own.

Have the family conversation

One of the best things you can leave your family isn't money. It's clarity.

I encourage clients to hold a family meeting after losing a spouse. You don't have to share account balances. Just let your family know where your documents are, who your advisers are and how your estate plan works.

This is also a good time to start passing along personal items that carry meaning. If your late spouse loved fishing, the family member who shares that passion might treasure the gear now more than they would years from now.

My goal for every client is simple: When the surviving spouse eventually passes, I don't want their kids searching for account numbers and passwords. I want them focused on the life that was lived, not a scavenger hunt for the paperwork behind it.

Losing a spouse changes your finances as much as it changes your life. The families who come through it in the best shape aren't the ones who acted fastest. They're the ones who took a breath, asked the right questions and made each decision on its own timeline.

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• Per Stirpes vs Per Capita: The Beneficiary Rules Most Families Have Never Heard Of

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 navigating a divorce, securing your fair share of retirement assets is critical — especially if you're over 50 and short on time to rebuild lost savings. While a divorce decree officially ends your marriage, it cannot legally divide a 401(k) or pension on its own. Without a properly executed Qualified Domestic Relations Order (QDRO), the funds stay locked in your ex-spouse’s name, putting your hard-earned financial future at risk.

Whether you are currently negotiating a divorce agreement or reviewing finalized paperwork, knowing how QDROs work is your best defense against costly court delays and lost growth.

Take this 10-question quiz to see if your retirement plan division strategy is secure. And don't worry if you miss an answer; you can use the links below the quiz to brush up on divorce and retirement planning.

More on Divorce and Estate Planning, from the Kiplinger retirement team:

• The New Average Divorce Rate By Age: Are You in the Risk Zone?
• How QDROs Can Protect Your Retirement Savings in a Divorce
• Six Reasons to Disinherit Someone and How to Do It
• How Finances Are Split In a Gray Divorce
• What Drives Gray Divorce?
• A Retirement Guide for Solo Agers
• Why Single Retirees Have It Better Than You Think

"If you're hoping to retire someday, invest and start early."

Many of us have probably heard this, and it's true. However, investment accounts are only part of a comprehensive financial plan. Many people mistakenly believe contributing to a 401(k), IRA or brokerage account means they have a plan in place.

However, those accounts are just tools. The actual plan is a road map for how those tools should be used to help achieve financial goals.

In addition to making retirement savings contributions, a lot of people review their portfolio statements periodically, largely focusing on balances, returns and performance.

These statements are great for providing a snapshot of where your investments stand, but they don't explain how they'll be used to help you achieve your goals.

For example, two individuals can have identical portfolios with very different strategies. Someone who's planning to retire in the next few years will likely have different risk considerations and income needs compared with someone who is still decades away from retirement.

Rather than focusing on balances and returns, it's the financial plan that helps determine whether those investments align with your needs and circumstances.

Don't forget tax planning

Tax planning is another area in which portfolio statements fall short. They can tell you what type of accounts you're invested in, but they don't explain how withdrawals will be taxed or whether your money is in the appropriate account based on your situation.

Since investment accounts are taxed differently, where money is saved and how it's taken out can significantly impact your tax burden.

With a well-rounded financial plan, pre-retirees have the ability to understand how assets are intended to be distributed across retirement accounts and how withdrawals can be managed to reduce tax liabilities.

Adapting to changes

Unlike a portfolio statement, financial plans are designed to adapt to changes in your life rather than changes in the market.

Major life events such as a new job, marriage, the birth of a child or approaching retirement influence financial priorities, oftentimes requiring updates to an existing strategy.

A person's goals and spending habits can also change throughout retirement. The early years of retirement, also known as the go-go years, might mean traveling or taking on new experiences.

As the slow-go and no-go years approach, priorities tend to shift, especially when it comes to healthcare. However, financial planning doesn't stop when retirement hits.

Although a portfolio statement might list beneficiaries, it doesn't account for greater estate planning needs. Some people might want to leave assets to children or grandchildren, while others might decide to donate to charity or set specific guidelines for how their wealth should be distributed.

A financial plan helps make sure those wishes are incorporated into your overall strategy.

Paying attention to investment returns is important, but they're only one piece of the pie. A portfolio statement can give you a snapshot of current beneficiaries, various retirement accounts, and current investment performance.

It's the plan that helps determine whether those investments support your financial goals.

Related Content

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• Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial Adviser
• 4 Great Tools to DIY Your Own Financial Plan
• 5 Do's and Don'ts for a Successful First Meeting With Your Financial Adviser
• I'm a Financial Adviser: This Is the Retirement Tax Assumption That Could Cost You

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 is supposed to be a time to kick back and unwind, so who can blame you for not having everything figured out? Big decisions — like whether to age in place, work part-time, or pass on wealth while living — often feel like choices that can wait. After all, retirement can last 30 years, giving you plenty of time to mull things over.

Or does it?

According to Farnoosh Torabi, financial strategist and host of the So Money podcast, endless rumination can actually trigger a retirement shortfall.

"It's the refusal to change anything until life forces it upon us," Torabi told Kiplinger in an exclusive interview. "We remain in a house that no longer serves us. The estate plan remains unreviewed or untouched, and the conversation with adult kids never quite happens."

The root of this inertia varies. For some, it’s emotional avoidance — facing these decisions can feel like confronting one's own mortality, Torabi notes. For others, it's sheer procrastination. After all, who wants to update a will when you could plan a bucket-list trip instead?

Either way, delaying these key moves can cost serious cash and jeopardize your financial security down the road.

The hidden financial penalty of inaction

Take your home, for starters. Delaying downsizing means property taxes, upkeep, utilities, and maintenance will quietly eat into your retirement savings. Plus, if bedrooms are upstairs or hallways are too narrow for limited mobility, you could face costly emergency renovations down the road.

The same goes for an outdated estate plan, which can lead to probate delays, unexpected taxes, or assets going to the wrong heirs entirely.

Pushing off these decisions often turns manageable choices into costly emergencies.

"When the crisis finally hits — be it a fall, a diagnosis, or a partner's decline — decisions that could have been made calmly get made in a panic. You sell your home fast. You move into care you didn't shop around for," she said. "Denial comes at a cost."

Build your retirement 'dream team' before a crisis hits

To keep curveballs from throwing your retirement off course, Torabi recommends tackling these choices head-on while you are still in control. A great first step is realizing you don't have to do it alone and that everyone from your adult children to financial advisors can help map out the next 10 to 20 years.

To stay ahead of potential issues, have conversations with your adult kids now, revisit your estate plan regularly, and consult with real estate, tax, and financial professionals. A local agent can help you evaluate what your home is worth now versus in the future, as well as the tax implications of selling. Meanwhile, a trusted financial adviser can craft a withdrawal strategy that matches your lifestyle.

"Think about building your team early, when you don't need them yet," Torabi says. "That includes a financial planner, an estate planning attorney, and a real estate agent who knows your local market."

And if the scope of it all feels overwhelming? Start small. "Before you downsize your life, downsize one closet," Torabi says.

The runner-up mistake: retiring your earnings potential too soon

Many people nearing retirement view the transition as a finish line — the end of both their careers and their income. They did their job, saved up, and can finally stop working. But according to Torabi, that assumption is actually the runner-up biggest retirement mistake.

"While many of us are so tired of working long hours by our 60s, let's not throw the proverbial baby out with the bathwater," she says. "We're living longer than any generation before us, which is great, but it also means our money needs to stretch further."

Continuing to earn even a small income in retirement gives your existing savings more time to compound, while providing a buffer against inflation at the grocery store and gas pump.

Working in retirement isn't just a financial play, either. Staying engaged provides a sense of purpose that studies link to lower rates of depression, reduced heart attack risk, and longer lifespans. Ultimately, better overall health translates directly to lower medical bills.

"Purpose is not a nice-to-have in your retirement; it's practically preventive medicine," Torabi says. "My advice is not to view retirement as the end of work. It can mean the start of work on your own terms. Think: consulting, mentoring, teaching, or turning a hobby into modest income."

Don't wait for the crisis to force your hand

Whether you are already retired or approaching the finish line, letting hesitation or denial paralyze your planning can undermine both your quality of life and your nest egg.

Take some advice from Torabi and don't wait for a crisis to force your hand. By taking proactive steps today, you can protect your savings, maintain your independence, and ensure your retirement is defined by choice, not financial regret.

Editor's note: This article is part of an ongoing series in which we ask influential personal finance figures to share their opinion on the biggest retirement mistake you can make. Other articles feature Suze Orman, Dave Ramsey, Grant Cardone and Ramit Sethi.

Related Content

• Should You Skip the Wait and Prepay Your Retirement Dreams?
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If you’ve inherited a house, you’re not alone. Data show that 38% of people in the U.S. report real estate as part of their past or expected inheritance.

But once the deed is in your hands, you’re probably wondering what comes next. Beyond deciding whether to keep it, sell it, or rent it, there’s one almost universal question: What are the tax implications?

There's good news: Inheriting a house doesn’t automatically mean you’ll owe taxes to the IRS or your state. But what happens next depends on several factors, including whether you decide to sell the property and how the step-up in basis affects your tax bill.

Here’s more of what you need to know.

What happens with taxes if you inherit a house

Inheriting a house doesn’t automatically trigger federal taxes. Instead, you’ll need to decide what to do with the property. Whether you sell it, keep it, or turn it into a rental, each option can have different tax implications.

One of the most important tax rules for inherited property is the step-up in basis. A home’s basis is the amount the IRS uses as the starting point for calculating capital gains tax.

Think of the home’s basis like a car’s trip odometer. Resetting the trip odometer doesn’t erase the miles already driven. Instead, it creates a new starting point, tracking only the miles driven from that point forward.

• When you inherit a home, the IRS generally measures your gain from the home’s fair market value on the date of death instead of what the previous owner originally paid.
• The step-up in basis doesn’t change what the house is worth. It changes where the IRS starts measuring your gain.

For example, your parents bought a home decades ago for $150,000. By the time you inherit it, it’s worth $700,000. If you later sell the home for $750,000, your taxable gain would be $50,000, not $600,000.

That’s because your taxable gain is based on the appreciation that occurred after you inherited the home, not when your parents owned it.

Selling, keeping, or renting inherited property

Selling an inherited home is often one of the biggest financial decisions you’ll make after inheriting property. A Real Estate Inheritance Report from Trust & Will finds that 56% of heirs choose to sell an inherited home, making it the most common path forward.

• Fortunately, you won’t pay capital gains tax on the difference between what the original owner paid for the home and its fair market value when you inherited it. Instead, the IRS uses the home’s stepped-up basis as the starting point for calculating your taxable gain.
• That means when you sell, you’ll owe capital gains tax only on any appreciation that occurs after you inherit the home.
• If you sell the home soon after inheriting it for about its fair market value, your taxable gain may be minimal.

What if you decide to keep the house? Keeping an inherited home doesn’t create an immediate federal tax bill. You’ll still be responsible for ongoing costs like property taxes, homeowners insurance, and maintenance. If you eventually decide to sell the home, the stepped-up basis will determine how your capital gains are calculated.

Some beneficiaries—roughly 17%—decide to turn an inherited home into a rental property. If you do, rental income is typically taxable. You may also be able to deduct certain expenses related to the property.

Depending on your situation, you might qualify to claim depreciation, which can affect both your annual taxes and your capital gains calculation if you eventually sell.

Estate and inheritance tax considerations

If you’ve inherited a house, you may also be wondering whether you’ll owe inheritance tax or estate tax.

For most families, the answer is no.

The federal government doesn’t impose an inheritance tax, and only a handful of states do. Furthermore, the federal lifetime estate and gift tax threshold sits at $15 million per individual ($30 million for married couples), meaning it generally applies only to exceptionally large estates.

Whether either tax applies depends on factors like the overall size of the estate, where the deceased lived, and state law.

Where you live matters with inheritance

While federal tax rules dominate the conversation, state-level rules can create unexpected financial surprises. But the baseline rule is the same: Nearly all state tax codes conform to the federal step-up in basis, resetting the property's starting value to its fair market value on the date of death for state capital gains purposes.

However, state rules diverge from IRS rules in several key areas:

State Capital Gains Rates: If you hold the home and sell it after it appreciates further, any post-inheritance gain is subject to state income tax alongside federal capital gains tax.

In high-tax states like California, New York, or Minnesota, state capital gains tax rates can add 8% to 13%+ to your tax bill.

State Inheritance and Estate Taxes: Five states—Pennsylvania, New Jersey, Maryland, Kentucky, and Nebraska—levy a state inheritance tax on certain heirs.

Additionally, twelve states and Washington, D.C. enforce state estate taxes with exemptions far lower than the federal threshold—in places like Oregon or Rhode Island, kicking in on estates valued as low as $1 million or $1.8 million.

Local Property Tax Reassessments: In some jurisdictions, transferring title triggers a local property tax reassessment. The capped property tax rate the previous owner enjoyed could reset to current fair market value, significantly increasing annual holding costs.

Key questions to consider before making a decision

Before deciding whether to sell, keep, or rent an inherited home, take time to evaluate a few financial factors:

• What is the home’s official stepped-up valuation? Securing a professional, independent appraisal as of the date of death establishes your baseline basis and protects you if you sell later.
• Can you afford the ongoing carrying costs? If you plan to keep the home, calculate the true cost of holding it — including updated local property taxes, insurance premiums, utilities, and deferred maintenance.
• Are there co-heirs or sibling dynamics to navigate? If you inherit with siblings, clarify whether everyone agrees on selling or keeping the property, or if one party needs to buy out the others.
• What are the local property tax reassessment rules? Check with the local tax assessor to see if transferring title triggers an immediate tax reassessment that could increase annual property taxes.

Inheriting a home: Frequently asked questions

Tax laws are complex, and every beneficiary's tax situation is unique. The information provided here is for general educational and informational purposes only and does not constitute formal tax, financial, or legal advice. Be sure to consult a qualified tax professional, CPA, or estate planner to evaluate your specific circumstances before making any financial decisions.

Do you automatically pay taxes when you inherit a house?

No. Inheriting a house by itself won’t trigger federal taxes. Taxes may arise later depending on what you do with the property.

Can you sell an inherited house immediately?

Generally, yes. Many beneficiaries sell an inherited home shortly after probate or once they have the legal authority to do so. However, the timing depends on the estate administration process and state law, so consult a trusted professional to understand any timing restrictions that may apply to your situation.

How is capital gains tax calculated on an inherited house?

In many cases, capital gains are calculated using the stepped-up basis, meaning the home’s fair market value on the date of death becomes the starting point for measuring future gain.

What if I inherit a house with my siblings?

If you inherit a house with your siblings, you may become co-owners of the property. Together, you’ll need to decide whether to keep the home, sell it, or rent it out. If you sell the home, each beneficiary’s share of any capital gain is based on their ownership interest and the home’s stepped-up basis.

Can I live in an inherited house without paying taxes?

Usually, yes. Moving into an inherited home doesn’t automatically create a federal tax bill. However, you’ll likely become responsible for ongoing expenses like property taxes, homeowners insurance, and maintenance.

If you later sell the home, your taxes will depend on the selling price and your stepped-up basis.

What if the house was held in a trust?

It depends on the type of trust. Many homes held in a revocable living trust receive the same step-up in basis as homes passed through a will.

Some trusts, however, have different tax rules that can affect your tax situation. If you’re unsure how the trust is structured, consider consulting a tax professional before selling the property.

Do I have to pay property taxes on an inherited house?

Yes. Once you inherit a home, you’ll typically become responsible for ongoing property taxes, just as any other homeowner would be. Depending on where the property is located, you may also need to update or reapply for property tax exemptions after ownership changes.

Related Content

• Ask the Tax Editor: Tax Basis in Inherited Property
• Capital Gains Tax Rates 2026: What You Need to Know
• Estate Tax vs Inheritance Tax: Who Actually Pays the Bill?

A signed will, a funded trust and a list of named beneficiaries can create a powerful sense of security for individuals mapping out their estate: The paperwork is done, so the plan must be ironclad.

In reality, even the most carefully designed estate plans can quietly fall apart when left unattended.

Anyone actively engaged in or preparing to start the estate planning process should be fully aware of where they may be exposed to vulnerabilities, which life events should prompt an immediate review and reevaluation and what to bring with them when meeting with an estate planning attorney.

Here are five of the biggest myths in estate planning, each paired with the best practice to follow instead.

Myth No. 1: The will and trust always have the final say

It seems logical that a will or trust controls where everything goes. In practice, beneficiary designations on retirement accounts, life insurance policies and similar assets generally take precedence over both.

Consider a revocable trust that thoughtfully establishes a separate share for each child in a family. If the largest retirement account names just one child as beneficiary, that single form quietly bypasses the entire trust structure. The funds go directly to the named child.

Strategy tip: Treat beneficiary designations as a core component of a coordinated and comprehensive estate plan and confirm that every designation is made with intent that is reflected within the will and trust.

Myth No. 2: Once beneficiaries are named, the job is done

Standard beneficiary forms carry default rules that routinely surprise families. For example, if three adult children are each named as one-third beneficiaries and one of them dies first, that child's share typically flows to the surviving siblings, rather than the deceased child's own children.

In such a scenario, the grandchildren are unintentionally disinherited by a form nobody thought to revisit.

When assets do reach minors through beneficiary designations, the results are rarely good: The child receives full control at 18. Custodial Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts are irrevocable, and compounding growth over time can gradually turn modest gifts into a substantial sum no teenager is properly prepared to manage.

In our own practices, these accounts have produced some of the most difficult conversations we have ever had — a parent watching a 17- or 18-year-old gain control of far more money than anyone ever intended, with no legal way to slow it down.

By the time a family realizes the account has ballooned, nothing can legally stop the transfer.

Likewise, divorce introduces its own trap. Some states automatically sever a former spouse's beneficiary designation the day a divorce is finalized. Anyone who intends to keep an ex-spouse as beneficiary must re-execute the designation after the divorce is final, or the law may quietly override the plan.

Strategy tip: Review every beneficiary designation after any major life event and at least every five years. Make sure to review beneficiary designations on accounts with less common beneficiary designation options such as payable on death (POD) or transfer on death (TOD).

Myth No. 3: More documents mean more protection

Complexity is not the same as security. While an estate plan may become more elaborate with every well-intentioned addition, it can also become more fragile. Key warning signs include:

An uncoordinated patchwork of paperwork. Wrangling several documents not designed to work together — such as a living trust from one attorney and powers of attorney from another — can add up to produce disaster.

Outdated assumptions. The federal estate tax exemption now sits at $15 million for individuals; roughly two decades ago, it was $1 million. Sophisticated structures built under the old rules can be obsolete today.

Assets ignored by documents. A closely held business, a buy-sell agreement or a family investment entity can derail everything.

Forced togetherness. A family cabin left jointly to three children living in three different states, further complicated by a provision forbidding its sale, is a recipe for resentment. So are co-fiduciaries, which generate an outsized share of estate litigation.

Strategy tip: Favor coordination over accumulation, revisit older structures as the law changes and name one person at a time.

Myth No. 4: The attorney will flag any problems

As former practicing estate planning attorneys ourselves, we say this with genuine affection for the profession: Attorneys are, by the design of their practice, reactive.

They respond to what clients bring them, and they rarely reach out unprompted to ask whether a plan still reflects a client's life.

So, the responsibility for noticing that a named guardian is no longer needed, or that a personal rift has made a chosen trustee a poor fit, tends to fall on the client.

Strategy tip: Complete three steps before any attorney meeting:

• Do a cursory self-review. Check who is named and in what roles, the ages at which distributions occur and whether significant assets are mentioned in the documents at all.
• Articulate wishes in plain language. An effective plan maps who receives what, in what proportions and under what conditions, no legal vocabulary required.
• Bring a personal financial statement. Provide a clear accounting of what is owned, how it is titled and who else holds an interest.

The stakes of that last step are easy to underestimate. We once worked through a client's entire plan, only to have her mention, almost in passing, that she had been diagnosed with stage IV cancer.

Attorneys can work with only what they are given, and one undisclosed detail can quietly undo an otherwise flawless plan.

It also pays to ask the attorney's opinion directly. Asking, "Would this work in my situation?" invites a far more engaging answer than a directive ever will.

Myth No. 5: A good plan is built to last a lifetime

An estate plan is not an immovable monument; it is a living document. Trying to solve for the next 30 years is a surefire recipe for decision paralysis.

The better question is simpler: If something major happened in my life within the next five to 10 years, how should my estate plan follow suit?

There is no standard estate plan. The power of a good estate plan lies in how precisely it reflects a particular family, its assets and the wishes of the person drafting it.

Strategy tip: Plan for the foreseeable future and resist any plug-and-play template.

The strongest plans are not the longest or the most sophisticated, but rather, the ones reviewed regularly, coordinated carefully and shaped by owners who stay engaged.

An intentionally designed plan does not simply sit in a drawer looking impressive; it makes a meaningful difference for the family it was designed to serve.

Ultimately, the most effective estate plan isn't the one with the most documents, but the one that stays coordinated across wills, trusts and beneficiary designations and is revisited after every major life event.

By staying actively engaged, individuals can ensure their plan continues to protect the family it was built to serve rather than falling victim to the default rules and outdated assumptions that catch so many families off guard.

Shelby Anderson, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Shelby works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Patrick Schultz, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Patrick works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Related Content

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• Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
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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.

Dear Wealth Wise: My husband and I have saved about $300,000 for retirement combined, but we recently paid off some debt and are saving about $1,000 a month. We are in our mid-to-late 40s with one child. We could move from our current home (with almost $400,000 equity) to a smaller condo once our daughter graduates in a few years. Our parents have pledged to pay for our daughter’s college, but we will still need to support her financially until she gets a job.

Realistically, what can we expect to retire with and are we saving enough? Should we cut back on things like cable, or is our situation not that bad? — Late to the Party

Dear Late to the Party: It's not so unusual to reach your mid- to late 40s with modest retirement savings. Student loans, home down payment savings, and high mortgage costs can eat into your paychecks, making it hard to fund retirement until your earnings increase.

The average 401(k) balance among savers ages 45 to 49 was $163,200 in 2026, according to Fidelity. By that measure, this couple seems to be in good shape.

At the same time, Fidelity's average balance of $264,500 among savers 70 and over isn't so promising. Under the popular 4% rule, that's roughly $10,600 in annual withdrawals. So while our couple may be ahead of their peers, that doesn't mean they're in excellent shape. Here's what our experts suggest given their situation.

Don't get hung up on small changes

When you're trying to catch up on retirement savings, you'll often hear that every little bit helps. But one thing you don't want to do is cut out small luxuries to the point where life is miserable.

"Before deciding whether to cancel cable or eliminate every discretionary expense, I’d first determine whether they’re actually on track," says Ernie Cave, CFP, founder and wealth manager at Cave Wealth Management. "The biggest strategy many families miss isn’t finding another $200 per month. It’s building a retirement income plan."

As Cave explains, if this couple is in their mid- to late 40s, they may have 20 years before retirement.

"Consistent savings, investment growth, and future raises can dramatically improve their financial position over that time," Cave insists.

Before cutting cable, Cave suggests a few things. First, figure out when you want to retire, how much annual income you'll need, and how much money Social Security will provide.

"Without that roadmap, it’s impossible to know whether another $200 or $300 per month will meaningfully change the outcome," he says.

Next, Cave recommends focusing on big opportunities to build meaningful savings rather than small ones like cutting cable.

"Make sure both spouses are receiving the full employer retirement match. Increase retirement contributions every time income rises. Redirect every debt payment that disappears into retirement savings before that money quietly becomes lifestyle spending," Cave says.

Given that the couple is approaching 50, they should also plan to take advantage of catch-up contributions. Once they turn 50, they will be eligible to sock away an extra $8,000 each in their 401(k)s or $1,100 in IRAs. (Since they are not yet 50, these contribution limits will likely increase in future years)

These changes, he explains, may get you where you need to be without eliminating the smaller bills that make life more enjoyable.

Sabrina Carlson, CFP and owner of Carlson Wealth Solutions, agrees with Cave.

"Regularly review expenses less to squeeze dollars for more retirement savings, and more to ensure they are really valuing what they pay for and to keep the habit of frugality in retirement," she says.

Carlson also says that based on her calculations, increasing retirement savings by $300 a month could add around $120,000 to this couple's total assets in retirement. And, she says, while every little bit helps, "this amount could also be accounted for in many other ways."

Of course, we don't know whether the couple has saved in a traditional or Roth 401(k) or IRA. If they've invested in traditional accounts, they'll need to plan for substantial taxes when they withdraw funds in retirement.

Use home equity to your advantage

Another advantage this couple has is a nice amount of home equity.

"With approximately $400,000 in home equity, downsizing after their daughter graduates could reduce future housing costs and potentially free up additional retirement assets," says Cave. "I wouldn’t count the entire $400,000 as retirement savings because they’ll still need somewhere to live, but it should absolutely be part of the retirement plan."

That said, downsizing right after the daughter finishes college may not be feasible. A growing number of recent graduates are having trouble landing entry-level jobs in today's market.

You may be able to downsize eventually. But it's best to build a retirement savings plan that doesn't rely on downsizing at a fixed point in time.

The outlook may be better than expected

All told, the situation here isn't dire. If you take $300,000 in savings, add $1,000 per month, apply a 7% annual growth rate, and let it compound for 20 years, our couple could end up with roughly a $1.65 million nest egg.

A 4% withdrawal rate yields about $66,000 in annual income, not including inflation adjustments. And if we apply the average $2,084 Social Security retirement benefit today, that adds roughly $25,000 a year for one beneficiary or about $38,000 for a couple.

That average benefit, of course, will likely be much larger once this couple retires, so it's an imperfect measure. But throw in cashed-out home equity, and they may be looking at a $100,000 annual retirement income, which isn't shabby.

Carlson says that if our couple runs projections based on their current plan and finds that their estimated annual retirement budget should work for them, then they're "likely in good shape." But they should ask themselves what they want retirement to look like.

Carlson also recommends creating a strategy now for how to contend with potential long-term care.

"This couple is likely to be the most susceptible to one or both having a costly long-term care event, as they will have some assets which must be used before Medicaid would step in, but not enough assets to cover the bill without worry," Carlson explains.

A word from Wealth Wise

The internet is loaded with tips on how to save for retirement, with cutting your daily latte being a common one. The reality is that with a solid savings plan, you don't need to deny yourself small indulgences or sweat every penny. A better idea is to prioritize what's important to you and enjoy those small splurges without guilt.

ASK YOUR OWN WEALTH WISE QUESTION

Do you have a question for our Wealth Wise experts? We want to hear about your retirement-related financial dilemmas, especially those that impact relationships with partners, friends and family. You will remain anonymous. Fill out this Google Form or submit your question to KipAdvice@futurenet.com. Not all questions will be published. We may edit your questions for clarity.

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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• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

You've done everything the system has asked of you.

You were automatically enrolled in your 401(k) on your first day and never opted out. Your contribution rate climbs a little each year — automatically, whether you notice or not — and your money sits in a target-date fund that quietly rebalances while you live life.

On paper, you're a retirement success story — the exact "participant outcome" every employer hopes for and the entire financial services industry is built to produce.

Then the brakes on your car go, the emergency room copay hits, or the rent notice arrives with a number you simply can't cover this month. And you do the very thing you swore you'd never do: You log in and pull money out of the account you know you shouldn't touch.

If that stings a little, it's probably because it's a story about a lot of us.

In 2025, a record 6% of retirement plan participants took a hardship withdrawal from their 401(k), according to Vanguard's latest How America Saves report — the largest share the firm has ever recorded, and up from 5% the year before.

That happened in the very same year account balances climbed 13% and plan participation reached an all-time high of 86%. Read that again.

By those measures, the system looks healthier than ever. So why are more people than ever reaching into their retirement savings early? And how can we help mitigate this?

Hardship withdrawals aren't a discipline problem

The "easy" conclusion is that people simply aren't saving well, or that they lack discipline. I'd argue the opposite. The median hardship withdrawal last year was about $1,900. The two most common reasons were to stop a foreclosure or eviction and to cover a medical bill.

People aren't necessarily draining their retirement accounts for a vacation, a new pool in the backyard or an online shopping spree. They're reaching for the last cushion they have, because every other one is already gone.

That's the real story hiding inside the headlines: The early withdrawal isn't the problem. It's a symptom. The fragility was there long before the withdrawal; this is just where it finally became visible.

The rest of the data agrees. Worker confidence in retiring comfortably fell six points in a single year to 61%, the lowest since 2017, according to the Employee Benefit Research Institute. Fewer than three in five workers say they could handle an emergency expense, while 65% say debt is a problem in their household.

These aren't the numbers of a country that forgot how to save. They're the numbers of a country where paychecks stopped stretching as far as the plan assumed they would.

To be fair, part of the increase is mechanical. It's simply easier to take a hardship withdrawal than it used to be thanks to a 2018 rule change that removed a required step, resulting in less paperwork and fewer hoops to jump through.

Going back to the 6% taking withdrawals, this could mean friction is disappearing, not necessarily that distress is appearing. But that caveat doesn't rescue the overall story. In contrast, it sharpens it.

When someone is facing eviction, unexpected medical bills or a $1,900 shortfall and this is what they reach for first, you're not looking at carelessness. You're looking at a need.

A better way to cope with financial emergencies

If you find yourself eyeing that account in a hard month, instead of asking, "What's wrong with me?", ask some of these questions instead.

Am I measuring the right thing? A growing retirement account balance feels like security, but it's a promise about a life you'll live decades from now. It tells you nothing about your next 30 days.

The fragility lives in the gap between this paycheck and the next surprise, and that gap never shows up on your quarterly retirement account statements.

The number that may better predict whether you'll have to raid it is a different one: How long you could cover the basics if the paychecks stopped tomorrow, using money you can easily reach without touching retirement at all.

Is there anything between me and the next emergency that isn't my retirement account? For a lot of people, honestly, there isn't. But that's not a character flaw — it's the most changeable thing on this list.

A small, separate emergency fund, built however it gets built — a little set aside over time — is often all that stands between an unexpected bill and a withdrawal.

And what would actually make me feel secure, as opposed to just making the balance bigger? Those aren't always the same goal, and noticing the difference is where real security starts.

Rather than focusing too rigidly on standard savings advice, find the number that helps you sleep at night.

To be clear, none of this means the years of saving were pointless. It means retirement readiness and financial security are two different things, and we've spent a long time discussing the first as if it guarantees the second.

If you're doing everything right and still feel like you're one surprise away from it all coming apart, you're not imagining it, and you're not alone — you're paying attention. The account is never the whole picture. The life around it is.

Related Content

• 8 Costly 401(k) Mistakes That Could Tank Your Retirement
• The 401(k) Loan Dilemma: Is It Ever a Good Idea?
• 6 Steps to Quickly Build Your Emergency Fund
• How Much Savings Do You Actually Need to Feel Financially Secure? Start With These 3 Benchmarks
• Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest Egg

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.

Could owning a pet affect the way you view life during retirement?

Turns out Fido or Whiskers may have a bigger influence on your post-work happiness than you thought.

Full disclosure: I'm a retirement researcher by profession, and I'm also an animal lover. My wife is a veterinarian, and we're proud pet parents to three dogs, two guinea pigs and a tortoise.

In other words, I don't need to do any research beyond my own home to know the profound impact a pet can make at any stage of life.

Still, I was delighted that Prudential included a few questions about pet ownership in the Global Retirement Pulse Survey it did last summer. And it's really not much of a stretch — the cost of owning a pet should absolutely be a factor in building a comprehensive retirement income plan.

Some things we learned aren't particularly surprising: Pet ownership declines notably by age, people who owned pets before are likely to want a pet during retirement, and most people don't fully consider all the costs of owning a pet after they're done working.

Cats vs dogs

Now for the fun part, and I realize I may have buried the bone — I mean, buried the lede. I wanted to see whether pet ownership — specifically cats and dogs — is related to changes in life outlook. So, we asked whether someone's outlook on life has gotten better with age.

Drum roll, please: Go give your dog a treat! People who own dogs report having better life outlooks than those with cats. And people who have cats actually reported life outlooks that were worse than people without pets (I mentioned this to a few cats I know, and perhaps not surprisingly, they just don't care).

I was curious if other factors like wealth could be driving this, so I ran some additional calculations, and it turns out I wasn't barking up the wrong tree. See the results below.

So, I can't offer any guarantees from our research. But if you think owning a dog in retirement will bring a lasting smile to your face, who am I to disagree?

For over 20 years Prudential has been studying broader economic trends impacting Americans in its Pulse survey. The latest, the Global Retirement Pulse Survey, expands the geographic footprint and includes responses from the U.S., Brazil, Mexico, and Japan (for this analysis I just focus on just the U.S. respondents). The survey was conducted online by Brunswick Group between August 8-22, 2025 and there were 1,000 U.S. respondents. Note, the survey only included "mass affluent" adults, who are defined as age 30+ with at least $100,000 in investable assets.

Related Content

• How to Cut the Cost of Pet Care
• Is Pet Insurance Worth It?
• Why Your Pet Should Be In Your Estate Plan
• How to Find Your Pet Insurance Sweet Spot: A Financial Planner's Perspective
• From Pets to Paintings: The Little Things That Can Cause Big Estate Trouble

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

You probably think you know precisely what stuff your adult children most want from you when you downsize, move to Palm Beach, or are pushing up daisies.

You’re probably wrong.

They don’t want their school trophies. They don’t want that fancy china that Grandma religiously took out of the hutch and served the Thanksgiving turkey on. Most of all, they don’t want those photo albums stuffed with black-and-white pictures of family members who were dead before your kids were even born.

Parting with your precious stuff is hard. Parting with stuff is even harder when your children — who you thought would be clamoring for it — want nothing to do with it. A generation of baby boomers is downsizing and flooding the market with stuff right now because they inherited so much from their own parents and grandparents.

"Gens X, Y, and Z don’t want these things," says Julie Hall, a professional estate liquidator and author of Inheriting Clutter: How to Calm the Chaos Your Parents Leave Behind. "I’ve got a 30-year-old, and I can count on one hand what she wants."

Which is precisely why you’re reading this story. We reached out to four downsizing experts for their unique insights into the ten things adult children typically want least of all — and why.

1. Anything from your living room or dining room

These are, by far, the toughest things to re-home, says Anna Novak, a downsizing expert, real estate agent, and founder of Simply Downsized, a consulting firm in Falls Church, Va. This accounts for a lot of big, dark, space-consuming stuff. Like giant mahogany dining room tables. And huge hutches filled with china and crystal from generations past.

"People don’t have formal dining rooms anymore," says Novak. Our lifestyles have changed so much that it’s increasingly rare to invite large groups of people into our homes and entertain them, she says.

Formal living rooms used to be a visual statement of success, says Novak. In another time, it was a place that was once a gathering spot where you’d feel just as comfortable bringing the Fuller Brush man who knocked at the door as you’d feel with family and friends. Now, few folks want them, and even fewer want all the stuff that fills them up.

2. Photo albums with nameless faces

It’s not that your kids don’t want any of your photos. They don’t want all of them. And they especially don’t want albums or boxes filled with images of distant family and friends whom they don’t even know, says Nonnahs Driskill, founder of Get Organized Already, a professional organizing firm in Pasadena, Calif.

Best bet is to simply offer them a few photos of their choice, she says. "When you give kids your stuff, it should feel like a gift — not a burden," says Driskill.

Best are digital albums, says Marguerita Cheng, a certified financial planner and downsizing specialist in Gaithersburg, Md. It’s especially helpful if the digital photos you share with your kids are organized in some simple way and identify who is in them, she says.

3. Books from another era

Bottom line is, whatever books your children actually want and love, they probably already have, says Driskill.

Books are big, heavy — and take up too much space, she says. They are also very personal. Think about it. Does your kid really want the textbook for the Introduction to Philosophy 101 class you took in college fifty years ago?

Ditto for CDs, records and tapes, says Driskill. Odds are, she says, your kid doesn’t even have anything to play these CDs, records or tapes on.

4. Matching, obnoxious bedroom sets

It used to be a sign of exquisite taste to have a massive, dark wooden bedroom set that included a huge dresser and mirror, a separate stand-up dresser, nightstands on either side of the bed, and a giant poster bed with a towering headboard. Now — not so much.

So, if you happen to have one of these monstrosities — or a bedroom set even remotely like this — please, please don’t foist it off on your kids, says Hall.

These days, matching bedroom sets are so uncool. And most younger folks opt for simple, platform beds that are high on function and low on decorative frills, she says. So, don’t be surprised, she says, if the only thing your kid wants from your bedroom set is a nightstand or two.

5. Linens — with or without stains

You can bet the house that your kids want absolutely nothing to do with those piles of old linens that you’ve got stored for them in a chest in the attic.

If they’re stored in a chest, that means you really don’t want them, either, says Hall.

This includes everything from tablecloths to placemats to napkins. Even that particularly onerous napkin, she says, with a shiny stain "where Uncle Joe spilled his beef gravy."

There’s probably not a woman under the age of 50 who would even consider putting out a matching linen set on the dining room table, says Hall. Why? Among other things, it requires starch and ironing. "My daughter would just throw them out," she says.

6. Collections of just about anything

Way back in the 1950s, collectibles evolved into a sign of success. If you had a Thomas Kinkade painting of a welcoming cobblestone bridge or a Maria Innocentia Hummel figurine of a young German lass standing with her bowl of porridge and geese on either side of her, well, you were the bee’s knees.

As much as you valued these collectibles, your kids don’t, says Novak. Never mind that these collections were a huge part of homemaking for so many boomer moms. They were marketed as lifetime keepsakes that would surely grow in value. But now, she says, "they are just seen as clutter. And kids don’t want them."

7. Sporting goods from another era

You might be a father who paid hundreds — even thousands — of dollars years ago for your then state-of-the-art golf clubs. They once looked so sleek and so shiny. But now, they’re yesterday’s news, says Novak.

Ditto for your one-time state-of-the-art exercise equipment, which did not age well, she says. Nobody wants an old treadmill laden with your coffee stains and sweat marks. "Your kids want their own equipment — not yours," she says. The one exception is the freestanding weights, which often look attractive even if they’ve aged a bit.

8. Your 50-year-old wedding dress

You’ve kept your wedding dress for decades and even tossed some pungent mothballs into the garment bag to keep it pristine. But guess what, neither your daughter nor your daughter-in-law wants it.

"Someone might want your wedding dress, but neither of them," says Driskill. You probably should have donated it to a charity 50 years ago, she says.

Ironically, they might want your grandmother’s wedding dress — because that would definitely be "far cooler," she says.

9. Your untimely timeshare

Timeshares get a bad rap — and as inheritable gifts, they probably deserve to, says Cheng.

Sure, as retirees, you had the time and money to book pricey timeshare vacations everywhere from the Galapagos Islands to Outer Mongolia. But do your adult children really have the time — and money — to take these vacations at this point in their lives?

"People have different needs in different stages of their lives," she says. For your adult children, timeshares probably aren’t one of those needs, she says. What’s more, timeshares often come with maintenance fees that are always spiraling upwards. So check with your kids first, but if they don’t want the timeshare, unload it.

Their own stuff

This one’s certain to surprise most parents. You’ve been saving your kids’ stuff in plastic bins and cardboard boxes for years. Their baseball card collections. Their school soccer jerseys. Even their pre-school graduation certificates. They basically want none of it.

"If they wanted it, they would have taken it by now," says Novak. Particularly, they don’t want all of their school art work — yes, even those clay dinosaurs they molded together in kindergarten — that you’ve been saving for them, says Driskill. "They don’t want their kindergarten stuff," she says. Perhaps the only clay dinosaurs they’ll want, she says, are the ones their own kids ultimately make.

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

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In my experience, when a couple sits down to plan their Social Security timing, one thing surprises them almost every time: They don't agree.

One spouse has read that waiting until 70 gets you the biggest possible check, so that's the plan. The other wants the income now.

Neither of them has run the number that should be driving the conversation: Not the maximum benefit, but the spousal benefit and what happens to it if they wait.

That's the piece of Social Security planning I see skipped more than any other. It can be worth hundreds of dollars a month, for the rest of a spouse's life, and most people never calculate it until it's too late to matter.

The decision you can't undo

Social Security is one of the only truly irreversible decisions in retirement planning. Once you file, that's generally it. There's a narrow exception: You can withdraw your application within 12 months of filing, but only once, and you must repay every dollar you've received. Past that window, you're locked into whatever you chose, for life.

That permanence is exactly why this decision deserves more than a rule of thumb. "Wait until 70" is good general advice for a single person maximizing their own lifetime benefit. It's incomplete advice for a married couple, because it ignores a benefit that only becomes available once someone files.

The number most couples never calculate

If you're married, your spouse may be eligible for a spousal benefit worth up to 50% of your benefit at your full retirement age, even if they have little or no work history of their own, or if their own benefit is smaller than 50% of yours.

But here's the part that trips people up: Your spouse can't collect that spousal benefit until you file for your own.

Consider a hypothetical couple, Mark and Diane, both in their mid-60s, with a full retirement age of 67. Mark's full retirement age benefit is $3,200 a month, but he's planning to wait until 70 to collect $3,968. Diane spent most of her career raising their kids and working part-time, so her own benefit at full retirement age is only $700 a month.

Most couples in this position focus entirely on Mark's number. But Diane is also eligible for a spousal benefit of up to $1,600 a month, more than double what she'd get on her own record. The catch is that she can't touch it until Mark files.

While Mark waits, Diane can draw her smaller $700 benefit or wait alongside him. Either way, that's three extra years of a meaningfully smaller household income in exchange for a bigger Social Security check down the road.

Whether that trade-off is worth it depends entirely on the couple's full financial picture, which is exactly why this number needs to be calculated, not assumed.

Running the break-even math

The other number worth knowing is the break-even age: The point at which the extra money from delaying benefits catches up to and passes what you'd have collected by filing earlier.

For someone weighing full retirement age against age 70, that break-even point typically lands in the early-to-mid 80s, depending on the exact benefit amounts involved.

If you expect to live well past that age, delaying tends to pay off in total lifetime benefits. If your health or family history points the other way, filing earlier may make more financial sense, even before you factor in what it means for your spouse's income today.

The part everyone forgets: The survivor's check

Here's the piece that rarely comes up until it's too late to plan around: When one spouse dies, the survivor doesn't keep both checks. The smaller one stops, and the survivor keeps the larger one for the rest of their life.

That means whoever has the higher benefit, and their filing age, determines the income floor their spouse will live on if they're the one left behind.

That's a real argument for delaying the higher earner's benefit, especially when there's an age gap or a health difference between spouses. But it's not automatically the right call for every couple, and it needs to be weighed against the income the household is giving up in the meantime, not treated as a rule that overrides everything else.

3 steps to take this week

You don't need an adviser to start this process. You need 10 minutes and both spouses' numbers.

Pull both statements. Log into your accounts at SSA.gov and record each spouse's benefit at 62, at full retirement age and at 70.

Calculate the spousal benefit two ways. Compare each spouse's own benefit against 50% of the higher earner's full retirement age benefit, and use whichever number is larger.

Run your own break-even math. The 80s range in this article is a general guide, not your number. Free tools, such as Open Social Security, let you plug in your actual birth dates and benefit amounts to see your household's real break-even age and total lifetime income under different filing combinations.

See the math applied to a real filing decision. If it helps to watch this reasoning play out step by step, this video walks through a similar case, including the spousal benefit tension and the break-even trade-off.

Make the decision with the numbers in front of you

Social Security timing isn't a decision either spouse should make alone, and it's not one that should be settled by general advice in an article you've read, including this one. It's a decision that depends on your spousal benefit, your break-even age, your health and what happens to the survivor.

Do the math for your household, not someone else's. And have the conversation with real numbers on the table before you file, because after that, there's no going back.

Related Content

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• When Spouses Clash on Retirement Age: Longevity Risk vs Early Retirement
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• Social Security Do-Overs Quiz: Can You Undo a Claiming Mistake?

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.

December has become the default season for financial planning. It's when many investors review taxes, increase retirement contributions, make charitable gifts and rush to complete other planning before the calendar turns.

But it can also be one of the least effective times to make important financial decisions. Schedules are crowded as deadlines are closing in, while advisers, accountants and attorneys may have limited capacity to support.

Instead of rushing through year-end checklists, summer can give you the space and time to think more strategically. By this time of year, you can see how income, spending and investments are tracking, with several months left to make changes while they can still have an impact.

In my experience as a CFP®, that head start often leads to better decisions because families have time to consider trade-offs and adjust gradually.

1. Rebalance your portfolio and review asset location

Even if you haven't made any trades, market performance over time can change your portfolio's risk profile. Strong returns in equities, a particular sector or one concentrated holding can gradually increase risk, leaving the portfolio more aggressive than it was at the beginning of the year.

An end-of-summer review can identify where allocations have drifted and whether new contributions should be directed toward underweight areas. The goal is to ensure that the portfolio still reflects your goals, time horizon and tolerance for risk.

The review can also include asset location, or which investments are held in taxable, tax-deferred and Roth accounts. As markets move and contributions are added, assets may no longer be held tax-efficiently.

Income-producing investments may be better suited to a retirement account, while investments that receive favorable long-term capital gains treatment may fit better in a taxable account.

Liquidity needs, charitable plans, required minimum distributions and estate considerations also matter. Reviewing where assets are held can improve after-tax efficiency without changing the overall strategy.

2. Check your retirement contribution pace

Many employees choose their retirement plan contribution rate at the beginning of the year and rarely revisit it. By summer, however, a raise, bonus or promotion may have changed both cash flow and the contribution needed from each remaining paycheck to reach a retirement savings goal.

Reviewing your retirement strategy in late summer allows time to make smaller adjustments over several months. Waiting until November may require a much larger increase over only a few pay periods.

This is an overlooked aspect of financial planning that has come up often in my client conversations: People assume they are on pace because their contribution percentage has not changed, but soon discover that compensation or payroll changes have left them short.

A summer financial review can also consider a mix of traditional and Roth contributions. Retirees should confirm how much remains to be withdrawn from required minimum distributions and whether qualified charitable distributions fit into their giving plans.

3. Run a tax projection

By the end of the summer, your financial picture is typically much clearer and more comprehensive than it was at the start of the year. Wages, bonuses, business income, investment gains and equity compensation are easier to estimate, making summer an ideal time to determine whether tax withholding or estimated payments need to be adjusted.

A summer tax projection may also reveal valuable planning opportunities, including Roth conversion, gifts of appreciated securities, the timing of stock-option exercises or the use of investment losses to offset realized gains.

Some of these strategies may be better executed later in the year, once the full tax picture is clearer. But reviewing them now allows you to identify your options before year-end deadlines begin to dictate your decisions.

The goal isn't simply to lower this year's tax bill — it's to ensure every tax decision supports your broader long-term objectives without creating avoidable cash-flow constraints.

4. Put cash and debt to work more deliberately

Over time, cash can accumulate without a clear purpose. Conversely, some households may have too little set aside, forcing them to rely on credit or investment sales to cover predictable expenses.

An end-of-summer review can separate money needed for taxes, travel, home improvements or other near-term spending from assets intended for longer-term goals. It is also worth checking whether savings are earning a competitive return.

Borrowers with adjustable-rate loans, home-equity lines or other variable-rate obligations should understand how interest costs are affecting cash flow. Anyone planning a major purchase should consider how new debt would interact with retirement savings and other priorities.

Cash and debt can be managed intentionally rather than carried forward without review.

5. Prepare for employee benefit decisions

Open enrollment often leaves employees with little time to make important choices. Reviewing benefits during the summer creates more time to consider whether health, life and disability coverage still match the household's needs, particularly after a marriage, divorce, new child, home purchase or change in income.

Employees eligible for a health savings account can reassess their contribution pace and consider how the account fits into their broader plan.

Executives may also need to review stock options, restricted stock, deferred compensation or company-stock concentration before election deadlines arrive.

These choices affect taxes, cash flow and investment risk, and deserve more than a rushed year-end review.

6. Review estate documents before there is an emergency

Estate planning is easy to postpone when nothing feels urgent. Summer is a good time to ensure that wills, trusts, powers of attorney, health care directives and beneficiary designations still reflect the family's circumstances and long-term intentions.

Major life events — such as births, deaths, marriages, divorces, moves and significant changes in wealth — may also require updates to your broader financial plan.

For families considering significant gifts, planning should begin well before December, given valuations, legal documents and trust administration often require coordination among several advisers.

In conversations with clients, estate planning reviews often uncover practical issues that have little to do with estate taxes. An outdated beneficiary designation, an unfunded trust or a missing power of attorney can all create complications long before federal estate-tax exposure becomes relevant.

The goal is straightforward: Ensure the right people have the authority to act in an emergency and that your assets will be distributed as intended. Don't wait for an arbitrary year-end deadline to review your plan.

Act earlier to save stress later

Year-end planning will always matter. After all, certain tax, retirement and gifting decisions are tied to the calendar. But I believe that December should not be the first time you review and adjust your financial plan.

By summer, enough information is available to provide a clearer picture of your finances while still leaving enough time to make intentional adjustments without being rushed. Acting earlier can give investors the breathing room they need to make meaningful adjustments.

For many households, the most important question is simple: Has anything changed in the markets, my finances or my life that should change what I do next? Asking that question now — rather than in December — can lead to better decisions and less stress in the year-end.

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

If you have millions saved in your 401(k) and IRA, that feels like a win, and it is. But there's one way a large balance quietly works against you: The more money sitting in tax-deferred accounts, the more likely the IRS is to tax the maximum allowable portion of your Social Security check.

That happens by default, unless you plan around it.

Most people who reach this point spent decades doing everything right: Saving consistently, maxing out their 401(k), following the advice they were given. That advice was built for accumulation, not for the withdrawal phase.

This is often called the Social Security tax torpedo. It shows up the same way in almost every retirement plan I, as the founder of MOKAN Wealth Management, review for the first time. It's not a mistake. It's what happens when there's no planning for the tax impact of retirement withdrawals.

How the IRS decides what gets taxed

The IRS uses a number called provisional income to decide how much of your Social Security check gets taxed: Your regular income, plus any tax-free interest, plus half of your Social Security benefit.

Once that number crosses certain levels, your Social Security starts getting taxed, and those levels have never been adjusted for inflation.

Married couples filing jointly start owing tax at $32,000 of provisional income. Above $44,000, up to 85% is taxable. Single filers cross at $25,000 and $34,000.

Frozen since the 1980s and 1990s, these thresholds mean a couple with a modest combined income can land at the maximum simply because the numbers are so outdated.

In retirement, income piles on top of itself:

• Your IRA withdrawal gets taxed
• Your Social Security gets taxed on top of that
• Medicare premiums climb along with both

If almost all your savings sit in a traditional IRA or 401(k), every dollar you pull out to pay the bills is fully taxable, and adding half your Social Security on top pushes most retirees past every threshold in year one, often by a wide margin.

Nobody made a bad decision. They just never built a different kind of account to draw from.

The one exception is a Roth IRA. Money pulled from a Roth doesn't count toward provisional income, doesn't show up on your tax return and doesn't raise Medicare premiums. It's the one source of retirement income the IRS leaves alone.

The three buckets every retirement needs

Think of your savings in three buckets:

• Money you've already paid tax on (a brokerage account, where you owe tax only on the growth)
• Money you haven't paid tax on yet (a traditional IRA or 401(k), where every dollar withdrawn is taxed as ordinary income and where most people hold nearly all their savings)
• Money you'll never pay tax on again (a Roth IRA, which grows and comes out tax-free and is invisible to the IRS)

When almost everything sits in the second bucket, every dollar you withdraw pushes more of your Social Security into the taxable zone.

Tax diversification means having enough in each bucket to choose which dollars to spend each year based on what creates the smallest tax bill.

Roth conversions: Moving money to the third bucket

The most reliable way to build the tax-free bucket is through a Roth conversion: Moving money from your traditional IRA into a Roth IRA and paying income tax on the converted amount that year.

After that, the money and all its future growth come out completely tax-free and never count toward provisional income again.

The window to do this well is shorter than most people think. It typically opens in the years just before or after retirement, before Social Security starts and before required minimum distributions (RMDs) force taxable income onto your tax return. Income is usually at its lowest point during that stretch, which means lower rates on any conversion done then.

Three approaches work well in practice:

• Filling your tax bracket by converting just enough each year to use up room in your current bracket
• Converting larger amounts over a shorter window when a balance is too large for small annual conversions to move the needle in time
• Converting more aggressively when the market is down, since the same number of shares costs less in tax

The biggest mistake is waiting. RMDs force taxable income onto your return at age 73 or 75 whether you need it or not — on a balance that's kept growing with the tax bill still attached.

A before-and-after example

John and Karen, both 60, have $1.8 million combined in traditional IRAs, $200,000 in a brokerage account and almost nothing in a Roth. They plan to retire at 63 and need about $150,000 a year to live on. Their combined Social Security benefit is roughly $70,000 at full retirement age, or about $53,000 if they claim benefits early at 63.

On the default path, they retire and claim at 63, then pull the remaining $97,000 they need straight from the IRA. Provisional income comes out to roughly $123,000, well past the $44,000 ceiling: The 85% maximum, or roughly $45,000 of taxable Social Security, stacked on top of the $97,000 IRA withdrawal.

On the coordinated path, starting at 60 while they're still working, they convert a portion of the IRA to Roth each year, paying the tax from income and the brokerage account so the full converted amount keeps growing tax-free.

They keep converting through their mid-60s and wait until 67 to claim Social Security, when the benefit reaches its full $70,000. By then, the Roth is large enough to cover roughly $40,000 of annual spending tax-free, with the remaining $40,000 from the IRA.

Provisional income lands around $75,000 instead of $123,000: Still above the ceiling, but with substantially less Social Security taxed and a large share of spending arriving with no tax bill.

Same retirement date, same lifestyle spending, a meaningfully different tax outcome for the rest of their retirement. The only difference was starting at 60 instead of waiting until the options had narrowed.

What to do now

Most people don't choose to pay the maximum tax on their Social Security. It happens because they didn't plan for it, which also means it's predictable enough to fix.

Run your own provisional income number. Figure out how much room is left in your current bracket. Then start moving money into the Roth bucket, even a few years before retirement. The window narrows every year you wait.

The Social Security Administration's benefit estimator and IRS Publication 915 are good starting points for running your own numbers.

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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.

Owning a vacation home means you'll have a place of your own to retreat to whenever you feel the calling. You won't have to worry about local hotels booking up or getting stuck in a dodgy rental that makes your skin crawl. It's a popular move for setting up the lifestyle and community you want in retirement.

If you don't want to bear the financial burden of buying and maintaining a vacation home on your own, you could opt to buy one with friends. For example, if there's a couple you and your spouse know who tend to vacation in the same spots you prefer, you could choose your ideal destination, buy a home together, and share in the benefits and costs.

In theory, it's a good idea. But it may be more complex and risky than you'd expect.

The right structure is key

At face value, co-owning a vacation home might seem smart. In practice, it's important to have the proper setup, says Raul Gastesi, partner and co-founder of Gastesi Lopez Mestre & Cobiella PLLC.

Set up an LLC

"Two couples buying a vacation home together should not take title in four individual names," Gastesi insists. "They should form a limited liability company, have the LLC purchase and hold the property, and have the couples own membership interests in the company."

The reason, Gastesi says, boils down to liability.

"A vacation home means guests, a pool or a dock, someone else's grandchildren, and, if the couples ever rent it out when they are not using it, a stream of strangers," he explains. "If someone is injured on that property, a claim against jointly held real estate is a claim against all four owners personally, which puts retirement accounts and primary residences into the conversation."

On the other hand, Gastesi says, if the LLC owns the property, any claims that arise are made against the company and its insurance.

"That protection matters most in the short-term rental scenario, which is where a lot of these arrangements end up once the couples realize the house sits empty 10 months a year," Gastesi says.

Gastesi also cautions that an LLC is not a substitute for good insurance.

"The policy needs to be written in the company's name for the right kind of use, but it is the layer that keeps a bad accident from reaching everyone's personal balance sheet," he explains.

Think through financing hurdles

Of course, one pitfall is that if you'll be financing the property, Gastesi warns that a mortgage may be hard to come by.

"Many residential lenders will not write a conventional mortgage to an LLC," he explains. "Some buyers close individually and transfer the property into the company afterward, but that transfer can trigger the mortgage's due-on-sale clause."

Gastesi also points out that a vacation home does not qualify for the capital gains exclusion available on a primary residence.

Know how co-ownership impacts estate planning

Co-owning a home with friends means you'll need to document everything carefully to ensure all parties pay their share and reap equitable benefits. That may seem easy enough to arrange. But what happens if an owner passes away?

According to Gastesi, this is where the LLC earns its keep a second time.

"When the company owns the real estate, each couple owns a membership interest, which is personal property rather than real estate," he explains. "That interest passes under their estate plan. It does not pass automatically to the surviving couple."

What this means, though, is that in the absence of careful planning, that interest may also land with heirs who may not want a vacation home, may not be able to afford their share of it, and may have no relationship with the other couple.

"That is how a friendly arrangement turns into a dispute between people who never agreed to be in business together," Gastesi says. The fix, he says, belongs in the operating agreement, not each couple's will.

"[That agreement] should contain buy-sell provisions triggered by death, divorce, incapacity, bankruptcy, or failure to pay, a right of first refusal in favor of the other couple, an agreed method for setting the price such as an independent appraisal, and payment terms spread over time," he says.

Another reason to go the LLC route?

"If the vacation home sits in a state where neither couple lives, real estate held directly requires a probate proceeding in that second state when an owner dies," Gastesi explains. "A membership interest in an LLC is personal property, which generally avoids that ancillary administration. For a Florida couple with a mountain house in North Carolina, or the reverse, that alone can justify the structure."

Keeping the friendship intact

The right structure and operating agreement can protect you and the couple you're looking to buy a home with financially if one of you passes away. But to preserve the friendship, Kevin Tamlyn, founder of Next Stage Financial, says it's important to set clear ground rules

"Relying on 'we'll just figure it out as we go' is a recipe for a ruined friendship," Tamlyn says. "Sit down together and get crystal clear on the money, day-to-day living, and an exit strategy."

Tamlyn also suggests pooling money into a shared checking account that covers three to six months of expenses like HOA fees, property taxes, insurance, utilities, and routine maintenance. Then pay all running costs from that account.

Tamlyn says it's also important to agree on how to split peak dates.

"A simple rotation, like flipping prime summer weeks or alternating Thanksgiving and Christmas each year, prevents quiet resentment," he insists.

Additionally, establish a clear policy on guests and pets. Also, spell out what happens if one couple wants or needs out.

"Life changes," Tamlyn says. "Someone might need cash for medical expenses, want to move closer to grandkids, or simply stop using the home. Agree on how you’ll value the home when someone wants to leave."

Gastesi agrees and says a strong operating agreement could be the ticket to keeping the friendship intact.

"Its job is to absorb the disagreements so the friendship does not have to," he explains.

Finally, Gastesi says, each couple should have their own attorney review the operating agreement to ensure that they're comfortable with its contents.

"It costs a little more at the start," he says. However, "it's the clearest signal that both sides understood what they signed, which is exactly what you want on the record if the arrangement is ever tested."

Read More

• We Bought a Vacation Home for Retirement We Never Use. Should We Sell or Rent It Out?
• How Smart Retirees Turn a Second Home Into a Financial Asset
• Vacation Rental in Retirement: Should You Airbnb or Vrbo Your Home for Extra Cash?

Every financial plan you'll ever see puts heavy emphasis on getting money into retirement accounts.

Contribute early, get the match, max out the IRA and let it compound. That part of the advice is sound, and most disciplined savers follow it well.

What gets far less attention is what happens after the money is in there. For some retirees who did everything right and accumulated a large IRA balance, that account can quietly turn into a complicated tax problem for themselves, a surviving spouse and, eventually, their kids.

The culprit is required minimum distributions (RMDs). Once RMDs start, at age 73 or 75 depending on your birth year, that money adds to taxable income whether you need it or not, on top of whatever else you're already reporting. That's the part most retirees eventually hear about, usually from an accountant and usually a year or two too late.

What almost nobody discusses is where that balance goes after the RMD math is finished for the year.

A large IRA won't create a tax bill only for the original owner. It can create a bigger one for the spouse who is left filing alone and a different one for the kids who inherit what's left when they're in their peak earning years.

One account, three tax bills, three different taxpayers.

John and Jane did everything right

John and Jane are 64. They maxed out their 401(k)s for three decades, didn't touch the money early and rolled everything into IRAs at retirement. Between them, they're sitting on $2.3 million in traditional IRA balances, a paid-off house and modest investment income each year.

Fast-forward to age 75, when their RMDs begin. Assuming reasonable growth and no withdrawals, that $2.3 million could be $3 million or more, generating an RMD of roughly $122,000 in the first year.

Add combined Social Security of about $65,000 and an additional $45,000 of investment income, and they're looking at $232,000 to report on their tax return. It's far more than they need, and none of it is optional.

That $232,000 lands on John and Jane's return, and it's the most straightforward of the three tax bills this balance is about to generate.

The widow's penalty

The problem doesn't stop with John and Jane filing jointly. Assume John passes first, which is statistically likely. Jane's income marginally changes. She still collects the survivor Social Security benefit, still owns the investment account and still has to take RMDs on essentially the same IRA balance.

What changes is her filing status. She moves from joint brackets to single brackets, which are roughly half as wide through most of the income range. Her standard deduction shrinks by close to half as well, pushing more income into taxable territory.

Income that used to be taxed at 12% or 22% when John was alive is now landing at 24% or 32%, even though her income hasn't moved.

Many couples model their household income. Very few model what that same income looks like once one spouse is filing alone. For a couple with John and Jane's numbers, the bracket and deduction squeeze alone can mean $10,000 to $15,000 more in tax every year, for the rest of her life.

This is what is referred to as the widow's penalty and could cost the taxpayer additional tax for decades.

The beneficiary problem

Push the timeline out further. Jane eventually leaves the remaining IRA to their two children, and by then, it's worth roughly $3 million combined, about $1.5 million to each child.

Under rules in place since the SECURE Act, most nonspouse individuals must empty an inherited IRA within 10 years of the original owner's death. Withdrawals don't have to be even, but if the original owner was already taking RMDs, annual withdrawals are typically required throughout that window, too.

For a child who's in their peak earning years, that inherited IRA doesn't always arrive as a windfall. It arrives as $150,000 or more of additional taxable income, stacked directly on top of a salary, a bonus and whatever else they've already got going on. A meaningful chunk of that inheritance can go straight to the IRS.

John and Jane spent 30 years deferring tax on that money, and their children may pay more on it than John and Jane ever would have.

Why this matters now

Two recent changes make this the right moment to make the projection.

First, RMD ages have moved. The SECURE 2.0 Act pushed the starting age to 73, moving again to 75 in 2033. That gives people born after 1959 a longer runway before distributions are forced and more years to plan around it.

Second, the One Big Beautiful Bill Act made the current tax brackets permanent instead of letting them expire at the end of 2025. For years, planners hedged Roth conversion advice with "rates might go up, might go down." That uncertainty has diminished.

Neither change fixes the underlying problem: A large traditional IRA is still going to generate a large RMD. But both make it easier to plan while there is still room to act.

The planning runway

John and Jane have an advantage most people overlook: They're 64, retired, and neither Social Security nor RMDs have started. That runway is valuable, but it won't last.

They could consider a Roth conversion. Every dollar converted gets taxed at today's rate, while their income is relatively low, instead of at a future rate stacked on top of Social Security, RMDs and investment income. A smaller traditional IRA can mean smaller future RMDs, less pressure on a surviving spouse's tax return and less taxable income passed to children.

Another move is a qualified charitable distribution, or QCD, once they turn 70½. IRA owners can send money directly from the IRA to a qualified charity — up to $111,000 per person in 2026 — and that amount counts toward the RMD without showing up as taxable income.

For the charitably inclined, it's one of the few ways to satisfy an RMD and lower a tax bill at once.

Neither move is automatically right for everyone, not even for John and Jane. The goal isn't converting for its own sake, it's optimizing the tax bill across a lifetime, and Roth conversions and QCDs are tools for that, not the whole strategy.

What matters more than picking a tactic is running the numbers every few years, since today's right answer may not be right in five years.

The real problem isn't the balance

There's nothing wrong with having a large IRA. It means the saving worked. The problem is assuming that planning is finished once the account is funded.

Left alone, a large traditional IRA sets off a chain reaction:

• Bigger RMDs than you need
• A tax increase left for the surviving spouse
• A tax bill handed to your kids on money you spent 30 years deferring

None of it is inevitable, but all of it takes years of lead time to fix.

The best time to deal with a large IRA is before the RMDs force the issue, not after.

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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.