With inflation still hammering retiree budgets, retirees may want to stress-test a simple but powerful benchmark: Can retirees realistically travel (or live abroad temporarily) on $100/day?

The short answer is ‘yes,' but with no shortage of qualifiers and caveats.

"Living on $100 per day would be fairly easy to do as a nomad, since you can easily find an apartment for rent for $1,000 or less per month in dozens of desirable countries, including in capital cities or in beach areas," said Tim Leffel, a travel book writer and author of the book A Better Life for Half the Price.

Leffel’s book covers 19 countries where living on less than $100 per day is feasible, and he says he and his wife now live in Mexico for less than $2,000 per month.

"That's without being at all careful about what we spend," Leffel noted. "We own our own home outright that we're regularly upgrading, but since most people in our city of Guanajuato pay $500 to $900 for rent, we would still be well under $100 a day for two of us even if we rented."

Leffel said there are cheaper places to live than in Mexico, even within Latin America. "Currently, that would include Guatemala, Nicaragua, parts of Panama, Colombia, much of Peru, Brazil, and Bolivia," he noted. Sometimes Argentina too, but it's a financial roller coaster there depending on what the government is up to."

"There are countries in Europe where people are spending far less, like Bulgaria, Albania, Hungary, and Romania," Leffel added.

How to start living abroad on $100 per day

Setting up stakes outside the U.S. for $100 or less per day is more of a mindset than a financial exercise, Leffel said.

"You don’t have to stretch a buck when living abroad," said Leffel. "Your expenses drop in half if you pick the right place."

He said that when in Mexico, for instance, "we go out to eat twice as much, attend more cultural events and don't even ask the prices when shopping for fruit and vegetables. We even have a weekly housekeeper for under $100 per month, for a three-bedroom/two-bath house plus an office."

Adopting that mindset means living like a resident rather than a tourist on a short vacation. "$100 per day may be sufficient for retirement travel if individuals can create a lifestyle similar to what locals live versus a tourist's 7 to 10 day vacation," said travel expert Jiayi Wang, founder of The Diary Of A Nomad.

Wang demonstrates this in Chiang Mai, Thailand, where her daily expenses average around $80. She typically spends $40 on a basic apartment or guesthouse, $20 on local meals, $8 on public transit, $12 on activities like cafes or museums, and $20 on miscellaneous needs like insurance, laundry, and mobile data.

Wang points out that staying longer allows you to spread your costs out over many months, including airfare, initial deposits, and utility setups.

Additionally, using local markets, eating at neighborhood restaurants, taking buses/trains, and renting apartments/homes for a month versus daily hotel rooms are great ways to save a buck when living on $100 a day, Wang said.

Navigating local banking and currency fees

Opening a local bank account abroad typically requires standard documentation: a passport or government ID, proof of local residency or a valid visa. Alternatively, multi-currency digital banks like Revolut or Wise offer easier workarounds for international travel.

ATM and card transactions also carry hidden costs. Swiping cards or making international ATM withdrawals can trigger foreign transaction fees and big out-of-network charges. This is especially the case when using credit cards to make cash advances. To limit these kinds of fees, you should carry a debit card that reimburses foreign ATM fees, including Charles Schwab or Capital One and a credit card that has no foreign transaction fees.

Finally, when a card terminal asks whether to pay in U.S. dollars or local currency, always choose the local currency. That's because choosing your home currency triggers Dynamic Currency Conversion (DCC), in which international banks charge inflated exchange rates and additional fees.

Visa thresholds and exit taxes

One major mistake U.S. retirees make when moving abroad is underestimating visa and residency costs, focusing primarily on airfare and rent.

“U.S. retirees often get surprised by renewal fees, border runs, the required insurance, or banking requirements,” said Dovi Geretz, Chief Technology Officer at SlickTrip, a real-time flight price alert platform. “Those expenses can add up quickly and disrupt even the most carefully planned long-term travel budget.”

Most popular destinations require a retirement or long-term residency visa to stay beyond tourist limits. While these programs attract international retirees, they carry upfront costs: application and legal fees, document translations, background checks, medical exams, and income verification. These requirements can easily add hundreds or thousands of dollars to a budget before signing a lease.

Retirees should also recognize that extended stays can trigger unexpected international tax obligations. Many popular destinations follow the 183-day rule, meaning that if you stay in the country for more than half the year, you may be considered a local tax resident subject to local income taxes in addition to your U.S. reporting.

Certain U.S. tax provisions, such as foreign tax credits, generally help citizens avoid double taxation. However, navigating dual filing requirements takes smart planning. U.S. retirees planning to split time between countries should track their days and work with an international tax specialist to ensure they don't accidentally trigger tax residency overseas.

Make sure to account for healthcare costs

One of the biggest mistakes people make when trying to determine how their retirement dollars will stretch while traveling is failing to include healthcare costs in their estimates.

"Medicare generally doesn’t pay for any medical treatment outside of the U.S.," Wang said. "Travel medical insurance or international coverage must be included in the costs of traveling and should never be considered an option, but rather a required expense."

Generally, travel medical costs are framed by the country where the insurance is needed. For instance, travel insurance in Costa Rica costs about $215 for a 12-day trip.

Medical insurance costs in Thailand, however, clock in at about $96 for the same 12-day trip. Consequently, it’s up to the traveler to determine how much of their $100-per-day budget should be spent on healthcare costs.

Renting longer term can help you save

Being creative about living arrangements can stretch a travel budget.

"Long-term rentals are much cheaper than short-term rentals," said Clay Cary, senior trends analyst at CouponFollow. He said that moving less often reduces transportation and hotel costs. "Therefore, slow travel is always more cost-effective."

Cary also advises living like a local to keep expenses low: shop at neighborhood grocery stores, use public transit, visit free cultural attractions, and eat where locals eat. Travelers often overlook hidden costs such as parking, transit passes, and daily upscale restaurant costs, which add up quickly depending on the location.

Location choice ultimately dictates the budget. As travel writer Tim Leffel points out, a $100-a-day budget goes much further in Southeast Asia than in Central America: "$100 per day would be tough in Costa Rica, but in Thailand, you could budget for it." He notes that in Thailand, you can cover rent, food, transport, entertainment, and healthcare for around $3,000 a month, or roughly $100 per day.

3 travel tips that accommodate a $100 per day budget

Use local transportation whenever possible: Usually, buses, trains, and metro systems are reliable and inexpensive when compared to taxis and rental cars," said Dovi Geretz, chief technology officer at SlickTrip, a real-time flight price alert platform. "Also, retirees who embrace public transit will save money daily and often experience destinations more authentically than travelers staying inside tourist bubbles."

Always choose destinations where healthcare is affordable and accessible. Many retirees underestimate how quickly medical costs can affect a travel budget.

"That’s why countries with quality private clinics, lower prescription prices, and affordable travel insurance options can help retirees protect both their health and long-term financial stability when overseas," Geretz said.

Eat where the locals eat, rather than rely on tourist districts or international chains: For inexpensive yet fun dining experiences, look for street markets, family-owned cafes, and lunchtime specials, as they often offer fresher food at a fraction of resort prices.

"Retirees who shop locally and occasionally cook at home can dramatically reduce daily expenses, all while enjoying a more immersive cultural experience," Geretz added.

Avoid these travel budget mistakes: Often, U.S. retirees overpay on rent because they insist on having everything they had at home, like a dishwasher and a dryer, instead of adapting to what's normal in their destination.

"Sometimes they also buy an expensive health insurance policy they don't really need because local healthcare costs are so low," Leffel noted.

"Sometimes they insist on buying a car and maintaining it in a city where they don't really need one to get around. Taxis in my city are $4 to get across town, for instance, while the bus is 0.50 cents."

Travelers can also easily bust a journey budget by not paying attention to mobile phone connectivity charges, although many don’t, assuming rates don’t vary that much overseas.

."An immediate and easy fix that retirees can save each month significantly is evaluating their cell phone plan," said Thad Hwang, Founder and CEO of Goji Mobile, a cell phone comparison and retail services company.

Most Americans are overpaying for their coverage, either by staying with a mainstream carrier for years that have only raised their rates or by paying for more data than they actually need. "Switching plans or carriers takes minutes, and can save retirees hundreds each year that can be applied to other expenses like travel," Hwang noted.

Most never notice a difference in coverage. The only difference they notice is an extra $70 to $100 each month in savings."

Additionally, many carriers offer international roaming directly on your existing line, either as part of a package or as an add-on, enabling you to travel globally without needing a third-party eSIM.

Remember you're not on vacation

Perhaps the biggest mistake in living abroad on $100 per day is treating relocation and traveling as a permanent vacation.

“Many people underestimate how fast the budget can be eaten by restaurant meals, transportation, tours, and accommodation in hotels,”

Cary said. Another error is failing to calculate additional fees, including taxes, resort fees, parking, and travel insurance.

“Retirees tend to move too frequently,” Cary said. “Flying and relocating every couple of days increases the overall expenses by two times. Those who spend more time in the same place get a better value for their money."

What does $100 per day buy retirees abroad?

Methodology: Estimated budgets are based on housing costs from Numbeo and Expatistan, health insurance estimates from international insurers including Cigna Healthcare and Allianz Partners, and retirement guidance from the U.S. Department of State, International Living and the Social Security Administration regarding overseas benefits. Costs are representative mid-2026 estimates for a single retiree renting a modest one-bedroom apartment and will vary by neighborhood, exchange rates and lifestyle.

Why retirees like it

• Relatively inexpensive private healthcare 
• Established expat and retiree community 
• Low-cost public transportation and dining 
• Long-standing retirement visa options

Hidden costs

• International health insurance premiums typically increase substantially after age 65. 
• Retirement visas require financial documentation and periodic renewals. 
• Flights to and from the U.S. can significantly affect annual spending. 

Primary sources: Numbeo; Expatistan; International Living; Cigna Healthcare Global; Allianz Partners; Thai immigration guidance.

Why retirees like it

• High-quality healthcare system 
• Safe communities and reliable infrastructure 
• Well-developed transportation network 
• Residency pathways available for qualifying Americans 

Hidden costs

• Housing costs in Lisbon and Porto have climbed sharply in recent years. 
• Rental inflation has outpaced overall inflation in many coastal markets. 
• Residency, taxes and healthcare planning can increase total costs. 

Primary sources: Numbeo; Expatistan; International Living's Global Retirement Index; Portuguese government residency guidance; OECD housing statistics.

Why retirees like it

• Close proximity to the U.S., making family visits more affordable 
• Large English-speaking retiree communities 
• Lower housing costs than many U.S. retirement markets 
• Well-developed private healthcare system in many cities 

Hidden costs

• Medicare usually does not pay for healthcare outside the U.S., so retirees must buy private insurance, local coverage, or pay out of pocket.
• Buying property near the coast or an international border requires setting up a bank trust and paying fees.
• Residency visa requirements and renewal fees are increasing.

Primary sources: Numbeo; Expatistan; International Living; U.S. Department of State country information; Centers for Medicare & Medicaid Services guidance on overseas coverage.

Note: These estimates represent moderate lifestyles for a single retiree renting locally in mid-2026. Actual costs vary based on exchange rates, housing choices, healthcare needs, and travel frequency. They are intended as planning estimates rather than fixed budgets.

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A few weeks ago, when I took a look at my retirement accounts, I felt good. My wife, Liz, and I were on target for our retirement strategy.

Our retirement plan has us both working for an additional three to five years or so. Working later has been part of our retirement strategy so we can support our children more now, rather than through an inheritance later on.

We want to cover medical school tuition for our son for another couple of years. We paid for vet school for our daughter and want to pay for her upcoming wedding.

We're also renovating a beach cottage for our retirement home.

Even with these expenses, we were on track.

Recently, after almost 45 years at her company, Liz, at age 64, was told her position had been eliminated. Now, everything feels different.

This was not the plan

We don't know yet if Liz will retire or take on a new job. We aren't in trouble financially. We have always lived within our means and been diligent savers, and we have some of our IRAs invested in annuities with guaranteed income options.

This wasn't the plan, though, and we don't want to rush into any decisions. We're meeting with our financial professional soon to discuss our options.

I have talked for years about the risk of an early retirement as part of my job working with financial professionals. Yet, I hadn't seriously considered the possibility that our retirement wouldn't happen on our timeline, even though it is common.

It's common to leave the workforce earlier than you thought, especially for reasons outside of your control. About two in five (42%) of Americans retire earlier than expected, often for reasons outside of their control, according to the 2026 Annual Retirement Study from the Allianz Center for the Future of Retirement.

Unexpected job loss was the second-most-common reason to retire earlier than anticipated after health issues that prevent performing their job.

We all need to think about this

So, now I get it. We all need to seriously think about the risk of an early retirement.

Beyond the financial impact, an unexpected early retirement can take an emotion toll as well. It can have a psychological impact on both the individual and their family. Liz describes it as a grieving process.

As we make financial decisions, it's important to recognize these emotions and avoid making major financial moves based on them. This is where our financial professional will become an invaluable partner.

Here are the five areas that anyone nearing retirement should be thinking about now, not later, to understand the risk of early retirement.

1. Can you actually afford to stop working?

Considering if you can stop working is complicated. In our situation, we've gone from two incomes to one. Her severance gives us some breathing room. We need to evaluate if we can afford for her to not work again and still achieve our financial goals now and for retirement.

Starting over again late in your career can also be daunting. It's even more daunting for Liz, who worked for the same company for more than 40 years.

It often also takes longer for older workers to find a new job. On average, workers over age 65 spend 39 weeks unemployed, and workers between ages 55 and 64 are unemployed for 36.9 weeks, according to the U.S. Bureau of Labor Statistics.

Younger Americans are unemployed for shorter durations.

2. How will your savings change?

If we're living on one income and covering the same expenses, something has to give. And it may be our ability to keep saving — at the time when saving matters most.

Our plan assumed we'd keep contributing to our 401(k)s for a few more years. Many people do this since these are typically some of your highest-earning years.

I've been making catch-up contributions to boost our retirement savings while we still could. Now, I'm not sure we can keep doing that.

The closer you get to retirement, the more valuable those final contributions can be. Catch-up contributions are designed for this stage of life — to help you make up ground and take advantage of tax-advantaged growth when time is limited.

We're now asking:

• Do we keep prioritizing savings, or preserve cash flow?
• Do we reduce contributions to maintain flexibility?
• How does stopping now affect our long-term outlook?

When retirement happens earlier than expected, time can be a big constraint. You don't have as many years left to contribute or recover from changes.

3. When should you claim Social Security?

We hadn't planned to claim Social Security anytime soon. Like a lot of people, we assumed we had time to figure that out. Now, we don't.

I've reached my full retirement age, so I could claim my full benefit today, and it would not be reduced since I've reached full retirement age — but that would prevent me from receiving delayed retirement credits.

Liz could claim as well, but her benefit would be reduced if she starts before her full retirement age. If she starts Social Security and then does end up going back to work, she may have her benefit reduced if she earns over the maximum allowed while on Social Security before your full retirement age.

All of this leaves us weighing a real tradeoff: Should I file for benefits now or wait for higher benefits later?

Social Security is often the foundation of retirement income since it provides a guaranteed income stream that lasts for life and typically increases with cost-of-living adjustments.

But when you claim has a big impact on your retirement income strategy. Claiming early can reduce benefits by as much as 30%, while delaying can increase them by about 8% per year until age 70.

For couples, there's another layer. The survivor benefit is based on the higher earner's benefit. Claiming early could permanently reduce income for whoever lives longer.

This decision connects to everything else — how much we withdraw from retirement accounts, how we manage taxes and whether Liz goes back to work. The right decision for you depends on your savings, your health and your income needs.

4. Where will your health insurance come from?

The only thing more expensive than health insurance is not having health insurance.

When you lose your job, you often lose your health insurance. Liz is eligible for Medicare in a few months. That leaves a short, but potentially costly, period of time when she will need medical coverage.

Fortunately for us, since I am working, Liz can get health coverage through my employer.

There is no such thing as claiming Medicare early. So if we were younger, and I did not have health coverage through my employer, this could be a significant extra expense we would have to cover.

Health expenses will likely increase in retirement as you find yourself needing more healthcare services. Don't underestimate the potential cost of healthcare in retirement.

5. How will your tax strategy change?

Most of our retirement savings are in tax-deferred accounts. That has helped us lower our taxable income while working and let those investments grow tax-deferred. But now, those deferred taxes are coming due.

Every dollar we withdraw to fund our lifestyle counts as taxable income. We have after-tax investment accounts and small Roth IRAs, so we need to incorporate those into our strategy as well.

That means we're not just deciding how much to take out — we're deciding how much of it we'll actually get to keep.

You need to calculate how much to withdraw in order to fund your level of spending after taxes.

You also have to be deliberate about how and when you take money out. Those withdrawals can push us into a higher tax bracket, increase how much we pay for Medicare and affect how much of our Social Security is taxed.

We had planned on converting a portion of our IRAs into Roth IRAs over a period of time before our required minimum distributions (RMDs) begin. We are not sure we can still afford to do that — yet another question for our financial adviser.

Taxes don't go away in retirement — they just show up differently.

Liz and I are now personally experiencing the reality that retirement rarely unfolds exactly as planned. We know we are more fortunate than others, but part of it was due to planning, keeping a budget and trying to avoid extravagant expenses while still enjoying our lifestyle.

Flexibility is just as important as discipline when it comes to retirement planning. By thinking through the what-ifs now and seeking trusted guidance, we can make more confident decisions in moments of uncertainty.

Even for those of us who prepare carefully, timing can change overnight.

Allianz Center for the Future of Retirement® conducted the 2026 Annual Retirement Study in January 2026 with a nationally representative sample of 1,000 respondents age 25+ with an annual household income of $50K+/$75K+ (single/married) OR investable assets of $150K+.

The Allianz Center for the Future of Retirement® produces insights and research as a part of Allianz Life Insurance Company of North America.

Allianz Life Insurance Company of North America and Allianz Life Financial Services, LLC do not provide financial planning services.

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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.

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

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

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

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

Here's my attempt to do that.

Age 50: The catch-up window opens

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

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

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

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

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

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

Two useful planning tools arrive at age 55.

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

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

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

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

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

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

Age 59½: Penalty-free withdrawals begin

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

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

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

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

Age 60: A different door for surviving spouses

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

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

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

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

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

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

Ages 60 to 63: The super catch-up

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

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

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

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

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

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

Age 62: Early Social Security

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

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

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

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

Age 63: Watch your income for Medicare's sake

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

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

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

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

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

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

Age 64 and 9 months: Start your Medicare clock

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

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

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

Age 65: Medicare begins, HSA contributions end

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

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

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

Age 70½: Qualified charitable distributions

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

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

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

Ages 73 to 75: RMDs

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

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

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

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

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

These milestones don't exist in isolation

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

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

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

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

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

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

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

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

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

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

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

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

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

1. You don't have great health

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to choose the right Medicare Advantage plan

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

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

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

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

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

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

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

Read More

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

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

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

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

From gatekeeping to empowerment

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

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

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

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

The promise — and limits — of artificial intelligence

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

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

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

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

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

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

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

Beyond the headline technology

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

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

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

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

Where human judgment remains irreplaceable

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

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

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

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

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

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

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

A more useful question

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

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

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

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• So Your Employer Doesn't Offer a 401(k)? That's a Challenge, Not a Dead End

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

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

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

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

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

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

1. Keeping your spending in check prevents lifestyle creep

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

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

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

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

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

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

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

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

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

4. Low-risk investing can generate a reliable income

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

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

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

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

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

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

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

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

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

6. A cash buffer helps during tough times

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

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

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

Why a "modest" retirement fund can be enough

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

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

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

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

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

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

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

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

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

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

Are there other strategies they can put into play?

To reject or not

There are things to mull over here.

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

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

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

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

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

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

A case study

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

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

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

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

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

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

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

If necessary, seek assistance

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

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

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

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

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

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

Ronnie Blair contributed to this article.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

No two retirements are the same

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

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

Read More "3 Questions" Stories

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

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

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• Afraid to Dip Into Your Savings? 8 Guilt-Free Ways to Finally Enjoy Your Retirement
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You’ve spent 30 or 40 years mastering the art of saving; it's now time to master the art of spending. You built the budget, made the trade-offs and watched your nest egg grow. But now that you’ve reached the finish line, turning off "saving mode" can feel surprisingly unnatural.

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

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

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

More on overcoming the fear of spending:

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

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

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

The benefits of doing a Roth conversion in a down market

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

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

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

How a Roth conversion in a down market works

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What to watch out for when following this strategy

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

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

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

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

Read More on Roth Conversions and Retirement Investing

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

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

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

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

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

New hurdles for retirees

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

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

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

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

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

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

A big mistake

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

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

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

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

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

One coordinated strategy

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

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

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

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

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

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

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

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

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

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

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

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

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

You probably won't have to quit your job

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

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

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

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

Don't expect caregiver pay to replace your income

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

More Wealth Wise Retirement Advice

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

Read More on Caregiving

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

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

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

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

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

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

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

The attachment problem

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

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

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

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

The tax trap

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

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

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

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

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

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

Building a way out

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. The Medicare premium surcharge trap

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

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

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

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

2. The Social Security taxation trap

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

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

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

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

3. The tax bracket cascade

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

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

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

4. The net investment income tax trap

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

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

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

5. The charitable deduction trap

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

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

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

6. The state tax trap

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

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

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

7. The widow's penalty

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

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

How to minimize RMD tax traps

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

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

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

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

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

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

Related Content

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

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

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

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

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

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

Traditional mortgage guidelines weren't built for most retirees

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

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

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

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

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

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

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

Asset depletion as a workaround

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

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

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

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

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

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

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

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

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

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

What to do before you apply

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

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

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

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

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

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

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

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

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

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

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

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

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

Who you talk to determines your ability to buy a home

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

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

Remember, a denial is not a verdict.

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• High Mortgage Rates Are Holding My Retirement Hostage: Can I Still Downsize and Retire?

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

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

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

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

1. Build a plan that you both believe in

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

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

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

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

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

2. Go on a "money date"

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

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

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

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

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

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

4. Commit to full transparency

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

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

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

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

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

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

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

6. Invest in purpose and in the marriage itself

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

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

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

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

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

Read More

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• The New Average Divorce Rate By Age: Are You in the Risk Zone?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• The 'Die With Zero' Rule of Retirement

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

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

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

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

Why does retirement shift the goalposts?

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

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

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

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

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

Income

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

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

Investments

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

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

Taxes

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

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

Making the pieces fit

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

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

Everything becomes connected.

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

Questions begin to surface, such as:

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

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

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

But retirement changes the scoreboard.

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

So many decisions

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

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

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

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

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

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

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

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

Dan Dunkin contributed to this article.

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

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

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

Until it didn't.

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

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

The math has changed

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

That product doesn't exist anymore.

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

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

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

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

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

The menu has changed

The investment universe got bigger in those same 40 years.

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

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

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

Where I keep my wealth

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

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

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

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

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

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

A word on bitcoin

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

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

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

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

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

The point

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

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

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

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

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

More on dividend investing from the Kiplinger team:

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

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

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

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

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

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

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

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

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

Looking for clarity

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

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

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

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

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

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

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

Avoid costly mistakes

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

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

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

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

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

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

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

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

Don't neglect the emotional side

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

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

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

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

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

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

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

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

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

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

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

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

1. Sky-high HOA fees

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

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

2. Surprise condo special assessment fees

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

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

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

3. Rising insurance premiums

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

4. Year-round utility bills

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

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

5. Lack of caregivers

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

6. Property tax resets

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

Calculate everything before you make a move

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

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

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

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

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

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

There's upside, but it comes at a cost

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

Mike McCracken, president and founder of Wealth Guide Financial.

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

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

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

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

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

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

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

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

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

Have REITs become trendier?

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

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

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

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

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

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

Should REITs be a part of your retirement investment strategy?

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

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

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

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

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

Read More

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

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

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

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

1. You're already practicing retirement

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

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

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

2. Your finances give you real breathing room

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

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

3. You've got a life beyond work

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

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

4. You're curious about the future

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

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

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

5. You have a flexible plan for the future

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

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

6. You're comfortable with a slower pace

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

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

7. Your physical and mental health are priorities

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

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

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

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

Make sure your money is working for you

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

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

Give it a try first

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

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

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• How to Retire Early in 7 Steps
• Need a Reason to Retire Early? Consider These Eye-Opening Stats
• How to Retire at 40
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Usually, there are crosscurrents in financial markets, but today's seem particularly demanding.

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

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

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

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

Here's an option: Fixed income

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

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

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

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

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

The result is that the site recently reported delays in its response to fill mail requests. Among other delays, it could take nine months to complete converting paper savings bonds into electronic bonds. To cash paper savings bonds could take at least three months.

And requests to find lost, stolen or missing savings bonds would take a minimum of 11 months to process.

More bond trading

Bond trading volume is probably going to increase. Kevin McPartland of Crisil Coalition Greenwich reported in April that corporate bond market trading hit an average of $65 billion traded per day in March.

This was a record, surpassing the volume of the previous month, which was also a record.

Also, on the last day of March, $108 billion was traded, a single-day record for bond trading.

McPartland also pointed out that this higher bond volume was partly being facilitated by the advanced electronics used by institutional traders.

Another factor is that developed execution management systems are being employed, along with more standardized post-trade processes.

He pointed out that even though the systems and tools are more advanced, good people handling the processes are still needed. "Traders want a human element even when trading electronically," he wrote.

How to buy and sell fixed income, including Treasuries

Brokerage firms have always offered fixed-income securities, including Treasuries, but they have improved the ways for investors to buy and sell, even for small amounts. For example, the electronic trading platform Public has secondary market liquidity, an easy-to-navigate interface and other advantages.

Although bonds usually trade in $1,000 increments, Public trades corporate bonds and Treasuries in as few as $100 increments.

Investors can also build ladders at Public, spreading maturity dates to match investor needs. This can be done with Treasuries or bonds. Investors can call Public anytime, day or night, for support.

Another broker, Charles Schwab, advises that certificates of deposit (CDs) and Treasury bonds are two of the safest fixed-income investments you can make. And both can add diversity to your portfolio, generate income and protect principal. (Schwab also points out that investors can lose money in these securities.)

Schwab, like other brokerages, has fixed-income specialists available for calls from investors, as well as in-house traders who can be contacted either by phone or online. Schwab additionally builds taxable and tax-free Treasury and bond ladders for investors.

Fidelity Investments created a fixed-income site that offers a wide range of bonds, Treasuries and other offerings — 75,000 to 100,000 new issues and secondary securities are offered.

Fidelity charges only $1 markup or markdown for bonds traded in the secondary market; it charges no fee for online U.S. Treasuries.

For qualified clients, it offers help from fixed-income specialists and provides a high-net-worth desk to help investors with bonds and CDs.

Interactive Brokers (IBKR) is another broker committed to upgrading bond trading to a new standard and doing it on a worldwide basis.

On its platform, investors can invest globally in many financial securities, including equities, options, currencies, futures, bonds and funds. Accounts can be funded in many currencies, and trades can be denominated in different currencies. Market data can be accessed six days a week, 24 hours a day.

Thomas Frank of IBKR said, "We aim to provide our clients with the most flexible and comprehensive trading environment possible."

To that end, IBKR offers over 1 million corporate, municipal, non-U.S. sovereign bonds and Treasuries. These are offered without markups or built-in spreads.

ETFs that are unique

The professionals at investment management firm F/m Investments believe that investors have sent a clear message — they want safety, and they want to be shielded against inflation.

According to F/m, that's why investors poured $25 billion into ultra-short-duration U.S. Treasury ETFs. The funds started coming into the ETFs — BIL, SHV, SGOV and TBIL — at the outset of the Iran conflict and took only six weeks to be deposited.

The reason for the investment surge, according to F/m, is that these ETFs pay an attractive rate.

Also, if the conflict raises inflation further, these ETFs can reset soon to receive higher yields. And principal is protected because these securities will fall less than longer-term bonds as a reaction from the market adjustment to the higher rate.

F/m offers investors its single-maturity Treasury ETFs, called the U.S. Benchmark Series. The series makes it possible to buy Treasury ETFs during stock market hours and lock in the current on-the-run yield. On-the-run refers to the securities most recently auctioned. The securities are held only until the next auction, and they are sold, with the proceeds being used to buy a new series being auctioned.

The U.S. Benchmark Series is available in the full maturity range of Treasury bills, bonds and notes. This includes all securities from the 3-month Treasury bill ETF (TBIL) to the 30-year Treasury bond ETF (UTHY).

Treasury yields are attractive, even at the short maturity end: The TBIL yield is 3.54%; UTHY is 4.85%. This yield will change throughout the trading day; the market price will price in changes. The market price of publicly traded Treasuries and other income securities, in an ETF structure or individual securities, will fluctuate, and money can be made or lost.

The U.S. Benchmark Series offers maturity date diversification. As interest rates fluctuate between the series offerings, investors can switch into a higher-yielding Treasury or stay where they are.

The ETF series attempts to pay interest monthly, another advantage over holding individual Treasuries. The expense ratio is reasonable at 0.15% per annum.

Navigating today's volatile markets requires staying informed and being flexible, but whether you choose to buy individual Treasuries through a brokerage or opt for the simplicity of ETFs, there are reliable tools to help you protect your capital and generate steady income.

Related Content

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• 5 Ways to Increase Your Investment Income in Retirement
• Where to Find the Top Yields For the Rest of 2026
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Retirement has a lot of moving parts, and planning for them can be overwhelming.

Taxes, investments, Social Security, estate planning, healthcare and income strategies all compete for attention, and many retirees end up postponing important decisions because they aren't sure where to start.

As a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that the good news is that not every improvement requires a complete overhaul of your financial plan.

In fact, some of the most impactful retirement moves can be implemented relatively quickly.

While no single strategy is a silver bullet, taking action on a handful of key areas today could improve tax efficiency, simplify your finances and create more flexibility later in retirement.

Below are 10 retirement fixes worth considering.

1. Review whether Roth conversions make sense

For many retirees and pre-retirees, Roth conversions remain one of the most powerful tax-planning opportunities available (I talk about Roth conversions more in depth in my bestselling book I Hate Taxes, which you can request for free here).

The basic Roth conversion concept is straightforward: Move money from a traditional IRA into a Roth IRA, pay taxes on the converted amount today and enjoy tax-free withdrawals in the future.

This strategy can be especially attractive for retirees who expect a higher future taxable income from pensions, required minimum distributions (RMDs) and Social Security. By paying taxes now, while rates remain historically low, you could reduce future tax burdens and create greater flexibility later.

That said, Roth conversions are rarely as simple as they appear. They can affect Medicare premiums, Social Security taxation and other aspects of your tax return.

Before making a move, it's important to run the numbers and look at them carefully.

2. Take advantage of available charitable tax benefits

Many retirees are charitable by nature, yet they often miss opportunities to maximize the tax benefits of their giving. Recent tax law changes have expanded charitable deduction opportunities for some taxpayers, even those who don't itemize deductions.

A little organization today could result in significant tax savings when it's time to file.

3. Improve your tax location strategy

Most investors focus heavily on asset allocation. Far fewer pay attention to asset location.

Asset allocation determines what you own, but asset location determines where you own it.

For example, growth-oriented investments might be more valuable inside Roth accounts because future appreciation could be tax-free.

Meanwhile, more conservative holdings could be appropriate inside tax-deferred retirement accounts.

Two investors can own identical portfolios yet experience very different tax outcomes depending on how their investments are positioned across account types.

Reviewing account placement might not require changing your investments at all, but it can have a meaningful impact over time.

4. Maximize retirement account contributions

Many workers increase their salaries over time but forget to increase their retirement contributions. If you're still employed, review your current contribution levels to workplace plans, IRAs and health savings accounts (HSAs).

Contribution limits often increase, and individuals age 50 and older may qualify for additional catch-up contributions.

A small adjustment to your payroll deductions today could translate into thousands of additional dollars for retirement down the road.

5. Reevaluate where excess cash is sitting

Many retirees and near-retirees accumulate large balances in savings accounts or taxable brokerage accounts while underutilizing tax-advantaged retirement vehicles.

If you have excess cash and are eligible to contribute to retirement accounts, consider whether those dollars could be working harder in a Roth IRA, Roth 401(k), traditional IRA or HSA.

In many cases, repositioning existing assets can improve long-term tax efficiency without changing your overall investment strategy.

6. Become more tax-efficient in taxable accounts

For investors with substantial brokerage accounts, tax management can be just as important as investment management.

One opportunity many people overlook is tax-loss harvesting, which involves realizing investment losses to offset gains or reducing taxable income. Over time, these tax savings can add up significantly.

Investors with larger taxable portfolios could also benefit from strategies such as direct indexing, which can provide additional opportunities to harvest losses while maintaining market exposure.

Even modest improvements in tax efficiency can create significant long-term value.

7. Audit your mutual funds

Many investors continue to hold mutual funds purchased years ago without reviewing whether those holdings remain appropriate. Some mutual funds carry higher internal expenses than comparable ETFs or index funds, and others may generate taxable distributions that create unexpected consequences in brokerage accounts.

Conducting a mutual fund audit doesn't necessarily mean replacing every holding.

However, reviewing expenses, tax efficiency and performance relative to alternatives can help identify opportunities for improvement.

8. Update your estate planning documents

This might be the least exciting item on the list, but it could be among the most important.

Wills, trusts, powers of attorney and healthcare directives are foundational components of a retirement plan, and yet, most Americans either don't have these documents or haven't reviewed them in years.

Life changes. Laws change. Family circumstances change. If your estate plan hasn't been updated recently, now may be the time to revisit it.

Equally important, make sure beneficiary designations on retirement accounts and insurance policies align with your overall plan and goals.

9. Simplify and consolidate accounts

Many retirees accumulate accounts over decades of employment. A former 401(k) here. An IRA there. A brokerage account somewhere else. Before long, keeping track of everything becomes unnecessarily complicated.

Consolidation might not improve investment returns, but it can make your finances easier to track.

It could also simplify tax reporting, improve organization and reduce confusion for spouses or heirs if something happens to you.

Sometimes the greatest benefit isn't financial performance; it's peace of mind.

10. Don't forget to enjoy the money

This final fix may be the most challenging one for diligent savers. Many successful retirees spent 30 or 40 years accumulating wealth and have developed strong saving habits, avoided lifestyle inflation and consistently prioritized financial security.

The challenge is that those same habits can make it difficult to spend money in retirement. Retirees still need a plan to avoid overspending, but many aren't in danger of running out of money; they're in danger of never fully enjoying what they've worked so hard to build.

Whether it's traveling with family, helping children and grandchildren, supporting charitable causes or simply creating memorable experiences, retirement isn't just about preserving assets; it's about using those assets to support the life you want to live.

After all, while running out of money is a legitimate concern, running out of time might be the greater risk.

The most successful retirement plans balance both sides of the equation: They protect your future while giving you permission to enjoy the present.

Related Content

• When Is a Roth Conversion a Bad Idea? 6 Situations Retirees Should Consider Carefully
• This Changes Your Social Security Decision (Especially if You're in the 2% Club)
• Should You Take the Survivor Option on Your Pension?
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

This is a story about the largest lizard and the largest health care payer in the country. But mostly, it’s about the millions of Medicare beneficiaries who might receive coverage of GLP-1 drugs.

Americans have taken to these drugs fast. Eleven percent of U.S. adults now use a GLP-1 for weight loss, while 15% say they’ve used one at some point, according to Gallup.

Now Medicare has joined in. As of July 1, it covers weight-loss drugs for the first time in the program’s history. Eligible beneficiaries can get Wegovy, Zepbound or Foundayo for $50 a month through the Medicare GLP-1 Bridge.

Sounds great, right? Well, as with most things involving Medicare, it’s more complicated than the headline. There’s a catch. Or rather, catches.

Here’s what to understand before counting on cheap GLP-1 coverage in retirement.

Catch #1: The coverage has an expiration date

It helps to know where GLP-1s come from.

GLP-1 drugs trace back to a compound in the saliva of the Gila monster that mimics a human gut hormone signaling fullness. Researchers originally built it into a treatment for type 2 diabetes, not weight loss.

That distinction still governs everything. When Congress created Medicare Part D, it barred coverage of drugs used for weight loss, which were then considered unsafe, ineffective or both. The exclusion is still law today.

The wrinkle is that it applies to the use, not the molecule. Prescribe GLP-1s for type 2 diabetes, cardiovascular risk or sleep apnea and Part D covers them like any other drug. Prescribe the identical injection for obesity alone and Medicare is legally forbidden to pay.

So the Centers for Medicare & Medicaid Services, the federal agency that runs Medicare, built a workaround. The Bridge is a demonstration program that operates outside your Part D plan, through a separate CMS claims processor. It expires on December 31, 2027.

Catch #2: Long-term coverage remains in limbo

The Bridge was supposed to have a sequel. A longer-term program called the BALANCE Model would take over in 2027 and run through 2031.

BALANCE, however, needed insurers. Plans representing at least 80% of Part D enrollment had to volunteer by April 20, 2026. They didn't.

Therefore, CMS responded by extending the Bridge from six months to 18. That patched 2027 and did nothing for 2028. That leaves older adults trying to plan prescription costs around a program with no confirmed successor.

It’s why Jeff Judge, CFP® and managing partner of Chesapeake Financial Planners who works with Medicare-age clients, treats that date as fact rather than forecast.

“We build the plan assuming the Bridge ends on schedule, then treat any extension as a bonus, not something to count on,” he says.

Catch #3: You probably don’t qualify

An estimated 38.9% of U.S. adults 60 and older are living with obesity. Yet, very few will get this deal.

You’ll need a body mass index (BMI) of at least 27 paired with a qualifying condition such as prediabetes, a history of heart attack or stroke or peripheral artery disease. At a BMI of 30 or higher, heart failure, uncontrolled hypertension, chronic kidney disease or severe sleep apnea can open the door.

KFF estimates 3.8 million beneficiaries qualify, out of more than 69 million people on Medicare. That’s roughly one in 18.

Your doctor also has to clear prior authorization through the central CMS processor, not your own Part D plan.

Dorothea Vafiadis, the National Council on Aging’s Senior Strategist for Healthy Aging, expects people to get stuck well before that.

"Medicare beneficiaries aren’t routinely monitoring CMS demonstration programs, and many won’t know if this benefit exists unless they hear about it from a trusted source," she observes.

Catch #4: The $50 hides a few things

Without insurance, these drugs run roughly $900 to $1,400 a month, so $50 looks like a rounding error. Two design quirks, however, could make it cost more than it appears.

First, the $50 doesn’t count toward anything. Because the Bridge sits outside Part D, that copay never touches your deductible or your annual out-of-pocket cap, which is $2,100 in 2026.

"Clients assume hitting the cap means their drug costs are done for the year," Judge says. "This one keeps billing regardless."

Second, Extra Help doesn't apply. Beneficiaries in the Low-Income Subsidy program, who typically pay little or nothing for medications, owe the full $50.

"For many older adults living on fixed incomes, an additional $50 per month, or $600 annually, is a substantial financial burden that may put treatment out of reach," Vafiadis says.

A third cost catches people who aren’t in Part D at all. Roughly 14 million people eligible for Part D aren’t enrolled, Vafiadis notes, and the Bridge requires a drug plan. For them, she says, the true cost extends well beyond the $50 copay, adding monthly premiums and possibly late enrollment penalties.

Catch #5: Getting on it is easier than staying on it

Say you qualify and the drug works. Three things can still take it away.

Your plan can change, as any successor to BALANCE would likely be voluntary. So keeping your medication could require switching Part D plans.

"Switching Part D plans to chase GLP-1 access can quietly wreck coverage on someone’s other five prescriptions," Judge says. "A plan that covers the GLP-1 beautifully might reformulate their blood pressure medication into a higher tier."

You may also stop on your own. Between 50% and 65% of patients quit within the first year, usually over cost, side effects or coverage barriers. A 2026 meta-analysis in eClinicalMedicine found patients regain about 60% of lost weight within a year of stopping.

Perhaps most importantly, your doctor may hesitate. Only about one in 10 participants in the trials that made these drugs famous was 65 or older, which means information about benefits and side effects in the 60-and-older population is limited. Consider that muscle loss is a known side effect. In an older adult, that’s a fall risk rather than a cosmetic issue.

Steps you can take now to secure GLP-1

Older adults mostly aren’t chasing the cultural version of these drugs. KFF polling found that among adults 65 and older, 8% had taken a GLP-1 for a chronic condition while 1% took one for weight loss. For most, this is disease management, which makes it worth handling carefully.

Ask about a covered diagnosis first. If you have type 2 diabetes, sleep apnea, MASH or qualifying cardiovascular risk, that route runs through your regular Part D plan, counts toward your cap and isn’t scheduled to disappear at the end of 2027.

"For a client who qualifies both ways, I generally point them toward the covered-diagnosis route for the long-term stability, even if the near-term cost looks less predictable," Judge says.

Budget the $50 separately. That's about $900 over the program, and neither your out-of-pocket cap nor Extra Help will soften it.

Document your conditions now. Prior authorization requires it, and the paperwork could move slowly.

Bring your whole drug list to open enrollment, October 15 through December 7. Not just the GLP-1.

Ask your prescriber about 2028 before you start. What happens if coverage lapses? Have that conversation in year one.

Price your fallbacks. Manufacturer direct-to-consumer programs, TrumpRx and pharmacy discount pricing all exist.

Because of the growing popularity of these drugs, Congress or CMS may yet build something permanent. But that’s still to be determined.

The Gila monster gets through the desert by hunkering down and waiting out conditions. We don’t have that luxury. Better to start planning now, while the program is still in front of you, so you’re not left in a desert of information when the coverage runs dry.

Read More

• The Longevity Blueprint: 4 Everyday Signs You’re Tracked for a Longer Life
• 10 Medicare Changes to Watch in 2026
• How Obesity Drugs Like Ozempic Could Revolutionize Retirement

One of the most enjoyable aspects of retirement for married couples is finally having more time to spend together and the financial freedom to maximize those years.

That's possible because during their working years and into retirement, they've had a unified financial structure that's worked well — filing taxes jointly and budgeting based on their combined income.

But eventually, they must plan for the time when one of them is alone and make sure the survivor will be as financially protected as possible. Most married couples do not plan for that clearly enough.

When a spouse dies, the surviving spouse may still need much of the same income for the usual expenses — the house, property taxes, utilities, insurance, medical costs, family support and lifestyle.

But their tax structure changes, and they may be subject to the "widow's penalty" when their tax filing status changes from married filing jointly to single. Suddenly, tax brackets compress, the standard deduction changes and income that once fit comfortably inside a married tax structure may become more heavily taxed.

Picture a surviving spouse sitting at the kitchen table, looking at the same accounts, needing the same dignity but having less tax room to work with. No one wants to think about that. This is where many retirement plans fail emotionally, not just mathematically. They may protect the portfolio, but they do not protect the person who is left behind.

A new tax world for a surviving spouse — and its cascading effects

I remember when this issue first became real to me. It was years ago, when a longtime client — widowed a little more than a year — came into my office with her tax return and asked a question that seemed simple: "Why did my tax bill go up after my husband died?"

Her household income had gone down. Her husband's Social Security check was gone. Certain expenses had changed. Emotionally, she was still trying to adjust to life alone.

But financially, something did not add up. She had less income than before, yet her tax situation felt worse.

That is the widow's penalty. And once you understand it, you begin seeing it everywhere.

After one spouse dies, the surviving spouse often moves into a very different tax world. The tax code treats married couples filing jointly more generously than single filers.

• The brackets are wider
• The standard deduction is larger
• Medicare income thresholds are higher
• Long-term capital gains thresholds can be more favorable
• The net investment income tax (NIIT) threshold is also higher

For the 2026 tax year, a married couple filing jointly does not enter the 24% marginal income tax bracket until their taxable income exceeds $211,401 (the ceiling for that bracket is $403,550). But the single threshold is roughly half the joint threshold. A single filer for 2026 reaches the 24% bracket once taxable income exceeds $105,700 (up to $201,775).

The standard deduction compresses, too. For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. The surviving spouse may still have the same expenses and lifestyle needs they did when their spouse was alive, but has less tax room to absorb the income that funds them.

A surviving spouse may lose one Social Security check but typically keeps the larger of the two benefits. Pensions with survivor elections may continue. Required minimum distributions may continue. Portfolio income may continue. Rental income, annuity income and investment distributions may continue.

The survivor may end up retaining 70%, 80% or even 90% of the household income but lose the joint tax structure entirely.

For example, a couple with $140,000 of taxable retirement income may sit comfortably in the 22% bracket, but a surviving spouse with $115,000 of taxable income — less income than the couple had together — can suddenly be pushed into the 24% bracket. Over 15 or 20 years, the lifetime cost can become substantial.

Medicare adds another layer. For 2026, Medicare Part B IRMAA surcharges begin when modified adjusted gross income exceeds $109,000 for an individual, versus $218,000 for a married couple filing jointly. The premium is simply higher because income now lands on the single-filer scale.

That is where many widows and widowers get blindsided. They expected grief, paperwork and adjustment. They did not expect the tax code and Medicare rules to make retirement feel financially tighter at the exact moment life became harder.

How to use a Roth conversion efficiently

If you are already widowed and reading this, the situation is not hopeless. Meaningful planning may still be available. Roth conversions during widowhood can still make sense in some cases, even inside single tax brackets, if the alternative is allowing a large traditional IRA to compound into larger future RMDs.

Qualified charitable distributions (QCDs) can become powerful after age 70½. Asset-location changes, tax-efficient withdrawal sequencing and Medicare-income management can still reduce future drag.

But if you are still married, the best planning window may be before widowhood.

For many couples, the richest tax-planning window occurs after retirement but before RMDs begin. That may be five to 10 years, or sometimes less.

The core strategy often involves multiyear Roth conversion planning while both spouses are alive and still filing jointly. The goal is not to convert blindly but to use available joint brackets intentionally, reduce future tax-deferred concentration and give the surviving spouse more tax-free flexibility later.

The math requires discipline. Each year, evaluate how much traditional IRA money can be converted without creating unnecessary tax damage. You pay tax at known joint rates today to potentially reduce larger future taxable distributions later.

Repeat the analysis annually and stop when the math no longer supports it. Document the plan clearly so the surviving spouse is not left guessing.

The long-term care effect

Long-term care can destroy the planning runway.

Consider this scenario. One spouse becomes ill. The healthy spouse becomes the caregiver. Assets may be spent faster than expected. IRA withdrawals may increase. Roth conversion planning gets delayed. Tax planning gets pushed aside because the family is dealing with doctors, facilities, medications, stress and exhaustion.

Then, after months or years of care, the healthy spouse becomes the surviving spouse and may inherit a weaker financial structure with fewer clean choices.

Wade Pfau, author of the Retirement Planning Guidebook and a professor at The American College of Financial Services, has described long-term care as one of retirement's most unpredictable risks.

The cost data explains why. CareScout's 2025 Cost of Care Survey reported national median annual costs of $74,400 for assisted living, in excess of $114,000 for a semi-private nursing home room and more than $129,000 for a private nursing home room.

Those are not just care costs; they are tax-planning costs. If the money comes from an IRA, the withdrawal may create taxable income. If that income pushes the household across Medicare thresholds, the cost can compound.

If the healthier spouse is left with fewer assets and less flexibility afterward, the widow's penalty becomes more painful.

IRAs and 401(k)s: A structural blind spot in retirement planning

IRA guru Ed Slott, founder of IRAHelp.com, has spent years warning that tax-deferred retirement money is not tax-free money. That warning becomes especially relevant here. The surviving spouse may inherit the same IRA or 401(k) balance, but under compressed single-filer brackets.

The mistake is not having an IRA or 401(k). The mistake is assuming they behave the same way after the first spouse is gone. They do not.

If you are wondering why this may not already be in your plan, the answer is not necessarily that anyone has been negligent. For three primary reasons, the widow's penalty sits in a structural blind spot across much of retirement planning.

• Many plans focus heavily on the retirement date, not the surviving-spouse phase.
• Most people do not enjoy a planning conversation that says, "Pay taxes voluntarily today to potentially reduce a larger tax problem later." Not having the conversion often feels better in April. It may feel much worse 10 years later.
• Many reviews are organized around investments, not the household tax structure after the first death.

Understand the potential stakes. The table below is only a simplified illustration. It assumes the surviving spouse retains a high percentage of joint retirement income, which can happen when income is driven by pensions, RMDs and portfolio distributions rather than mostly by Social Security.

These estimates may include federal income tax and Medicare surcharge effects. They do not include state income taxes, the net investment income tax or other household-specific factors. The point is not that every household will match the table but that the annual cost can become a six-figure lifetime issue if it persists for 10, 15 or 20 years.

A surviving-spouse tax map

Married couples with meaningful IRA balances, pensions, taxable investment income, deferred compensation or future RMD exposure should not guess. The next practical step is specific: Ask for a surviving-spouse tax map.

That map should show, in dollars, what happens to income, taxes, Medicare premiums, IRA withdrawals and cash flow after the first spouse dies.

A useful version of that analysis can often start with last year's joint 1040. Run the same income through the single-filer tax structure, compare the result and then project the difference over 10 to 20 years with RMDs, Medicare thresholds and Roth conversion options included.

If the exposure is small, you should know that. If it is large, you should know that, too, while both spouses are still here, while both can still make decisions together and while the cleanest planning years may still be available.

The window closes a little further with every tax year that passes. You should at least know what is inside it.

Dan Dunkin contributed to this article.

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

Related Content

• Avoiding the Widows' Penalty Tax Trap After a Spouse Passes
• The Financial Effects of Losing a Spouse
• Three Ways to Help Create Financial Stability for a Widow
• Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
• Your Retirement Plan Looks Watertight, But Have You Checked for Tax Leaks?

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

Jean Chatzky is the CEO of HerMoney.com and host of the podcast HerMoney With Jean Chatzky. Here, she speaks with Kiplinger about her new book, The Forever Paycheck, and what retirees struggle with in the transition to spending.

Kiplinger: You've referred to your new book, The Forever Paycheck, as the most important work you've done in your 40-year career. Why is this book such a passion project for you?

Chatzky: The book is about how to spend down your savings once you retire — or decumulate, as experts call it — and it is not something you can afford to get wrong. If you overdo withdrawals, you'll run short of resources late in life. If you underdo them, you're essentially underliving — not getting the most out of this phase of your life that you saved so long for. I think that's incredibly sad. For me, this issue feels both urgent and important.

Why do many re­tirees struggle with the transition from saving to spending?

It's emotionally really hard, because spending from savings feels like a loss. When you put so much time into accumulating something, it feels precious. You want to hold on tight.

Tactically, we've also had a lot of help accumulating, with automatic enrollment and escalation in retirement-savings plans and target-date funds. It has become super easy to do the right thing without doing anything. Those automatic hacks don't exist yet for managing withdrawals from savings.

You think the solution lies in creating what you call a forever paycheck. How can this help retirees?

A forever paycheck is a stream of income that will last for the rest of your life, and that enables you to live comfortably without the fear you'll run out of money. The income stream ideally should be enough to cover your needs and some of your wants — the ones you really don't want to give an inch on.

It is not a solution for all of your money. Everybody still needs to have some money invested in the market to grow. But researchers have found that having a regular income stream enables you to feel much more comfortable about spending.

How do you fund a forever paycheck?

If you can afford to, waiting as long as possible to claim Social Security so you maximize benefits is typically the right move for most people. That's the base of almost everyone's forever paycheck, plus any pensions you may get.

Then look at your expenses, those necessities and wants, to figure out how much money you'll need on an ongoing basis. Deduct the income you'll get from Social Security and pensions, and what is left is your gap. You can fill that gap with guaranteed income from annuities or withdrawals from your investments.

Personally, I'm going the guaranteed route. About a third of my retirement income will come from Social Security, another third from the rest of my forever paycheck, and a third from money invested in the market for growth.

How can retirees prevent an unpredictable event such as inflation or a big drop in stock prices from derailing their plans?

The whole point of building a forever paycheck is so these events will not derail you. If you've got a paycheck that covers your needs and key wants, and the market takes a tumble, you don't have to sell. You can give the market time to come back. And maximizing Social Security is your best friend when it comes to fighting inflation because it has a cost-of-living increase that's recalculated each year.

What else do retirees get wrong when it comes to spending?

Besides underspending and not living as well as they could be because of fear, many retirees think that spending across retirement will be consistent. It's not. People spend more in the early years, when they take their bucket-list trips and do home-improvement projects. Once we get into our mid-seventies, things slow down, and we don't spend as much. That fact should give people license to spend a bit more early on.

We should also think about ways to pass money along, whether it's to children or charities, while we're living. If I die in my nineties, my kids will be in their sixties. I really hope they don't need my money by then.

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

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If you're aiming to retire at the standard retirement age of 65, your 50s can feel like crunch time. Whether you're falling behind or you're pretty sure you're on track, this is the decade to nail down exactly how much you need to save for the retirement lifestyle you want and exactly what it's going to take over these next 10 to 15 years to get there.

At the same time, you might be part of the sandwich generation – those who have been stretched thin by the need to take care of both their aging parents and their older children, all while still trying to keep up with their own financial goals.

Suddenly, you hit 50 and realize the runway to retirement has gotten a lot shorter and you're not sure if you're anywhere close to where you should be at this point. If that sounds familiar, this checklist should help you get back on track.

4 financial priorities for your 50s

In your 50s, you have one major financial goal: get your retirement fully funded. With a few exceptions, anything else will take a back seat for this next decade. The question is less about what your financial priorities should be and more about building a personalized plan to get you where you want to be.

1. Come up with a realistic retirement number

When you first started putting away money in your 401k or other retirement accounts, you might have had a vague sense of how much money you needed to save up for your golden years. Now that those years are moving closer, it's time to revisit your goal and, if it's not already, make it more concrete.

You'll find some rules of thumb around what percentage of your current salary you should plan to spend each year in retirement — like 70% or 80% of your pre-retirement income — in order to maintain your current lifestyle. And you might have an idea of your expected lifespan based on how long your parents or grandparents lived.

But in reality, the amount you should plan to have for retirement depends on so many different factors. Do you want to maintain your current lifestyle or do you want to do more, like travel or rent out your home and retire in an RV for a few years?

This answer can change how much you need to save. Do you have a lot put away already or have you only just started to really save seriously for retirement? This answer can change how much you can realistically save (or what age you can realistically retire). Do you want to hang up your boots right at 65 or do you plan to retire sooner (or later) than that?

The best way to find the magic number that fits your retirement goals and your current financial situation is to meet with a financial planner. More than any online calculator or broad rules of thumb, a professional financial planner can talk through your finances with you and help you create a personalized plan to get you from wherever you are today to where you want to be when you retire.

Use the Bankrate tool below to connect with a financial professional who can tailor a plan to help you reach your financial goals:

2. Start learning about social security, Medicare and other retirement benefits now

How much can you expect social security to contribute to your retirement income? How much will that number change depending on what age you begin claiming it? If you plan to, say, start a business or take a part time job to keep busy and pad your budget, how will working affect your benefits?

Navigating the paperwork and logistics of social security, Medicare or a pension (if you have one) can be complicated and you don't want to wait until you actually need that income to figure it all out. If you haven't spent much time learning about how it all works yet, here are a few resources to get you started:

• How to estimate your Social Security benefits
• How to maximize your Social Security benefits
• A guide to Medicare basics
• What is Medigap insurance and who needs it?
• How does your retirement strategy change if you will have a pension?
• What happens to your benefits and taxes if you work past retirement age?

These are all great things to discuss with a financial planner as well. But if you're not ready to work with one just yet, take advantage of all the online resources you can right now to familiarize yourself with how it all works.

3. Aim to be debt-free by retirement

If you're still wrestling with debt, the idea of putting anything extra toward retirement might seem impossible. In that situation, think of your debt payments as part of your retirement plan. If you tally up everything you're spending now on your mortgage and other debts, that's the amount you can subtract from your retirement budget – or redirect toward pursuing the hobbies and bucket list adventures you're planning to do in retirement – once you've paid it all off.

Instead of feeling like those debt payments are holding you back, know that paying that debt down is just as important for your post-retirement future as contributing to your 401k is.

4. Prioritize your health now

A healthy retirement is just as important as a fully-funded one. Not only does physical health allow you to do more in retirement, it can also be a financial boost by lowering your future medical costs.

Work with your doctor to come up with a comprehensive and personalized diet and exercise plan so you can establish the right healthy habits now to slow the progression of conditions you might already have and prevent ones you don't.

The changes you make now can have a big impact, even if you weren't keeping up with regular exercise or a healthy diet before.

What to do if you're behind on retirement savings

By 55, the typical American has just $185,000 in retirement accounts, according to the Federal Reserve. That's just over two years worth of the median income of $82,150 at that age. In other words, it's not enough to retire on. If you're in a similar situation and feel like you might never be able to retire, here are a few strategies that can help you catch up.

Max out every retirement account you can

Once you hit 50, the IRS allows you to contribute even more than the standard maximum contributions to your retirement funds. By age 60, you'll enjoy super catch-up contributions to help you reach your goals even faster. All of these give you more wiggle room to catch up on your retirement savings if your fund isn't where you want it to be right now.

Before contributing more beyond the tax-advantaged limits on your 401k and IRA, however, make sure you also contribute to your health savings account (HSA) if you have one. HSA contributions are tax-free when you contribute to the account and tax-free when you withdraw later — provided you use them for medical expenses.

By treating your HSA like an extra retirement account, you can build up a sort of separate healthcare fund so you're not tapping your main retirement savings to pay for the medical expenses that inevitably come up as you age.

Be realistic about how much financial support you can provide others

As the sandwich generation, you love your kids and your parents. If you can afford to help out financially without sacrificing your retirement, that's great. But right now, your top priority needs to be a fully funded retirement, so you may need to set some boundaries.

You can still provide support to your loved ones in other ways. For example, instead of handing your kids cash, consider letting them move back home so they can focus on saving up for their own goals without worrying about rent.

If your parents are struggling to make ends meet, you can help them navigate the paperwork and logistics of setting up the long-term care they need through Medicare or other resources rather than writing the checks yourself.

If you have debt, work on lowering your interest rates

Juggling debt and catch-up retirement savings at the same time can be exhausting and make you feel you're not really making a lot of progress on either goal. To break through that plateau feeling, one of the most accessible tricks that many people overlook is lowering your interest rates.

Every percentage you can shave off that interest rate means more of each monthly payment is paying down the actual principal instead of being eaten up by interest.

Here are a few ways to lower your interest rates:

• Ask for lower rates. Yes, you can simply call up your credit card or loan provider and ask for a lower interest rate. Your chances of a yes are better if you have a good track record of on-time payments. But it doesn't hurt to ask regardless of your payment history.
• Use 0% intro offers on credit cards. 0% introductory rates on new cards or balance transfer offers on your existing cards can be a useful way to build momentum on debt repayment. The key is limiting the amount to what you can pay off before the introductory rate expires — and making sure you don't build up new debt now that the old debt is gone.
• Tap home equity to consolidate higher interest debt. By your 50s, you may have built up a healthy amount of home equity. Often, home equity loans can come with much better interest rates than you'll find elsewhere. So, whether you're battling credit card debt or a high interest auto loan, tapping some of that equity to consolidate that into a lower interest loan can help you pay down debt faster and pay less in interest overall.

These aren't one-off tricks, either. You can repeat these strategies regularly as you chip away at your debt. When your 20% credit card debt is gone, for example, your 10% personal loan becomes the "high interest debt" that you can consolidate into either a better rate loan or a 0% introductory offer credit card.

Use the tool below, powered by Bankrate, to compare today's top home equity offers:

Consider taking a side job

If you don't think you'll get anywhere close to your retirement goal with the amount you're currently able to contribute, it might be worth taking on a flexible second job for the next few years to help you catch up. You can dump those entire paychecks into retirement savings or debt to build some strong momentum toward your financial goals.

This isn't an option for everyone. But if you're able to take on the added stress of a side job for a few years in your 50s, it might be the ticket that unlocks the retirement you've been dreaming about 10 to 15 years from now.

Create retirement back up plans

Depending on where your retirement savings are at right now, it can help to come up with a few different scenarios for what your retirement might look like. For example, maybe you don't have the savings to fully retire at 65, but you have enough to cut back to part time work at that age for a few years to finish funding your retirement.

Maybe you're only slightly behind and can pull it off if you just push your retirement age up to 67 instead of 65 — or maybe you can retire at 65, but only if you downsize your home and throw that extra equity into retirement.

There are a lot of different ways to retire, and no one size fits all. Even if your alternatives don't sound quite as ideal as the retirement you envisioned, having those back-up plans can help you breathe easier. You'll know that no matter what, you've got a plan in place.

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• How to Help Your Adult Kids Without Hurting Your Retirement

For many adult children, one of the hardest conversations to have is with their parents about finances.

• Do Mom and Dad have updated estate documents?
• Who would make financial or health care decisions if one of them became incapacitated?
• Where are the accounts, insurance policies, passwords and key documents?
• Have they thought about whether they want to age in place, downsize or move closer to family?
• Are they vulnerable to scams?
• Is one spouse carrying all the financial knowledge while the other remains largely uninvolved?

These are practical questions. But inside a family, they rarely feel that way.

For parents, the conversation can feel like a threat to independence. For adult children, it can feel like overstepping, prying or implying that a parent is no longer capable.

Add sibling dynamics, second marriages, privacy concerns and years of family history, and it's easy to understand why so many families avoid the conversation altogether.

The problem is that silence doesn't preserve independence. In many cases, it puts it at risk.

When families wait until a health event, cognitive issue, hospitalization, death of a spouse or financial emergency forces the conversation, decisions often must be made quickly, emotionally and with incomplete information.

Adult children might not know where assets are held, whether estate documents exist, who the attorney is, how bills are paid or what their parents wanted.

A better approach is to reframe the conversation entirely. This is not about taking control. It's about helping parents remain in control for as long as possible and making sure their wishes are known, documented and respected.

Start with values, not account balances

One of the biggest mistakes adult children make is starting with the numbers.

"How much money do you have?" or "Where are all your accounts?" might be well-intentioned, but those questions can feel invasive. A more productive entry point is to start with values, preferences and peace of mind.

For example:

• "I don't need to know every financial detail, but I want to make sure I would know how to support you if something happened."
• "If there were ever a medical emergency, I would want to be certain I was helping make decisions in the way you would want."

This shifts the tone from investigation to support. It also makes clear that the goal is not to take over, but to understand the plan.

In my experience, families make more progress when the first conversation is about wishes.

• Where do your parents want to live if their health changes?
• Who do they trust to make medical decisions? Who should be contacted first in an emergency?
• What would comfort, dignity and independence look like to them?

Those answers can open the door to the more technical planning that needs to follow.

Consider a scenario we see more often than families expect. A spouse passes away after decades of careful saving. He was an electrician who built nearly $3 million through discipline and frugality, but managed everything himself.

The surviving spouse discovers accounts scattered across multiple banks, IRAs she can't access, missing passwords and a life insurance policy with no instructions on how to claim it. She doesn't know what her income will be, how to manage the investments or even how to pay the electric bill.

He meant well. But what he intended as good stewardship became an avoidable burden for the person he loved most.

That is what this conversation is really about.

Make the conversation smaller

Another common mistake is trying to solve everything at once.

Aging, estate planning, long-term care, digital access, beneficiary designations, powers of attorney and family roles are too much for one discussion. When adult children try to cover every topic in a single sitting, parents can feel overwhelmed or defensive.

Instead, think of this as a series of smaller conversations.

• "Do you have the right documents in place, and does someone know where they are?"
• "Have you thought about where you would want to live if staying in the house became difficult?"
• "Would you be comfortable introducing me to your adviser, attorney or accountant so I know who to call in an emergency?"

Smaller conversations reduce pressure. They also make the topic feel like part of normal family life rather than a one-time intervention.

Focus on organization before decision-making

Many families don't realize how much stress can be avoided simply by getting organized.

At a minimum, every aging parent should consider creating a central financial life organizer. This doesn't have to include every dollar amount, but it should tell trusted family members where to find essential information if needed.

That might include:

• A list of financial institutions and account types
• Retirement accounts, pensions and Social Security information
• Insurance policies, including life, home auto and long-term care
• The location of wills, trusts, powers of attorney and health care directives
• Names and contact information for the financial adviser, CPA, estate attorney and insurance professionals
• Mortgage, property tax, utility and recurring bill information
• Beneficiary designations and trusted contacts
• Key digital accounts and legacy access instructions

This kind of organization can be especially important when one spouse has historically managed the household finances. The surviving spouse might be fully capable, but if he or she does not know where things are, who to call or how bills are paid, the transition can become unnecessarily stressful.

A financial life organizer isn't just an administrative tool. It's a gift to the people who might one day have to step in.

Be careful with the word 'help'

Adult children often say, "I just want to help." Parents often hear, "You think I can't handle this anymore."

That disconnect can derail an otherwise important conversation. A better approach is to ask permission.

• "Would it be helpful if we sat down together and made sure everything is organized?"
• "Would you be open to walking me through who I should contact if there were ever an emergency?"
• "Would it give you peace of mind if we made sure your documents and beneficiaries still reflect your wishes?"

The difference is subtle but important. Asking permission preserves dignity. It allows parents to remain the decision-makers.

Bring in the right professionals

Some families are comfortable having these conversations on their own. Others benefit from involving a neutral professional.

A financial adviser, estate attorney, elder law attorney, CPA or geriatric care manager can help separate the emotional family dynamics from the technical planning. They can also help identify gaps that family members might not know to look for.

For example, an estate plan might exist, but beneficiary designations on retirement accounts or life insurance policies may be outdated.

A parent could have a power of attorney, but the named agent might no longer be the right person.

A parent might want to age in place, but the home could need modifications, additional support or a plan to fund future care.

The right professional team can help families move from vague concern to specific action.

Don't ignore fraud and exploitation

Another reason these conversations matter is financial safety.

Older adults are frequent targets for scams involving fake government agencies, tech support schemes, romance scams, grandparent scams and urgent requests for money. The most dangerous scams often involve fear, secrecy and pressure to act immediately.

Families can create a simple rule: No major financial decision, wire transfer, unusual payment or urgent request should be acted on without first speaking to a trusted family member or adviser.

That rule can prevent significant financial harm.

Keep the conversation going

The goal is not to have one perfect conversation; it's to normalize the topic.

Plans change. Health changes. Laws change. Family dynamics change. Documents that were appropriate five years ago might no longer reflect a parent's wishes today.

A brief annual family check-in can help keep everyone aligned. It doesn't need to be formal, and it does not require parents to disclose every financial detail. But it should confirm that key documents are current, trusted contacts are still appropriate, family members know who to call, and parents' wishes are understood.

The families that navigate aging and wealth transitions best are not the ones that avoid hard conversations. They're the ones that learn how to have them with respect, patience and love.

Talking to parents about money doesn't have to mean taking away their independence. Done well, it can do the opposite, preserving their voice, protecting their dignity and giving the entire family greater confidence about the road ahead.

Please see important disclosure information at opalwealthadvisors.com/disclosure.

Related Content

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• How to Talk to Your Family About Estate Planning (Without the Drama)
• 11 Tips for Talking to Your Aging Parents About Their Finances and Future Care

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.

Whenever I meet with new investors, one of their first questions is, "What are your fees?"

While this might seem like a natural question, it's often misguided and asked too early in the process. Before you ask about an adviser's fees, you should first want to know what services they can provide.

When I was in college, I ran a house-painting franchise. Every spring, homeowners would collect bids and try to decide who to hire. This is when I discovered that a price is comparable only after you define the job.

One painting crew might scrape, sand, prime, caulk, protect landscaping and do two coats, with a written warranty. Another might spray on a quick coat and disappear.

If all customers did was compare two quotes that were only a couple of hundred dollars apart, they weren't comparing value; they were merely comparing the costs of vastly differing services.

Choosing an investment professional works the same way. As one SEC article notes, "Just as a grocery store offers more products than a convenience store, some investment professionals offer a wide range of products or services, while others offer a more limited selection."

The key is to work with one that fits you well and can deliver advice specific to your needs and wants.

So instead of leading with a question about fees, here's the sequence that makes fees meaningful and helps you avoid paying for the wrong thing.

1. Name the job

One of the biggest mistakes people make when seeking financial advice is failing to clearly define what they need.

When I ask someone what they want from an adviser, the answer is often something vague like "to do better," "to get the highest rate of return" or "to make sure I'm on track for retirement." Those are ambiguous goals, not a clear job description.

Before you compare advisers, decide what problem you want solved. Do you need:

• A one-time second opinion?
• A written, comprehensive and holistic financial plan that connects retirement income, taxes and investments?
• Ongoing portfolio management?
• A "quarterback" relationship where one adviser helps coordinate investing, tax strategy and estate planning?

2. Understand what the adviser does for you

If you walk into a meeting and ask an adviser, "What are your fees?" and they say, "1%," what exactly does that number mean? What will you compare it to? Another adviser might also say 1%, but the two of them could provide completely different services.

One might be building a comprehensive, written retirement plan, coordinating tax strategies, helping with estate considerations and managing your investments. Another might simply be recommending funds from a menu their company provides.

The price might be identical, but the work behind it could be completely different. The depth and breadth of each adviser's capabilities would, in many cases, yield vastly disparate results.

If you only compare the cost, you may think you are comparing identical services when you are not. That is why the better question early in the conversation is not, "What do you charge?" but, "What exactly do you do for clients like me?"

Once you understand the services, the process and the expertise being offered, the fee discussion finally has context. And that is when you can decide whether the price is fair for the value being provided.

3. Determine adviser licensing, designations and background

Knowing what licensing and certifications your prospective adviser carries is critical to differentiating between professionals you may wish to engage. A narrow range of licensing may indicate both limited experience and limited access to industry products, services or strategies.

Also, certifications, such as the CERTIFIED FINANCIAL PLANNER® designation, may indicate the extent of training, depth and professional standards your practitioner brings to the table.

This can come into play when you notice an adviser does not use or recommend (or even denounces) certain financial instruments, which they are also conveniently not licensed to recommend or provide.

Unless you are aware of their licensing and certification, or even company affiliation, you may not be able to determine whether the advice you are seeking may have significant limitations.

The SEC's Investor Bulletin on using Investor.gov's Investment Professional Search tool suggests always researching an investment professional, including confirming registration and checking for disciplinary events, before deciding to work with them.

If your professional is licensed in the brokerage business, you can also use FINRA BrokerCheck. It's a free tool to research the professional backgrounds of investment professionals and firms.

You're not hunting for "gotchas." You're looking for patterns — repeat customer complaints, repeated job-hopping or disclosures that don't match the story you're being told. If you find something you are curious about, make sure you ask the adviser about it.

Ask for the documents that put fees and any conflicts of interest in writing. If an adviser is truly transparent, they'll gladly show you the paperwork that regulators care about.

If you'd like a ready-made interview script, the SEC's "Questions to Ask when Hiring an Investment Professional" bulletin includes practical questions that turn fuzzy conversations into measurable answers.

4. Now talk fees

Only after you've defined the scope and read the disclosures does "What are your fees?" become a useful question.

Since fees that look small can still have a major impact over time, ask what you will pay in year one and what you'll pay in a typical ongoing year.

Then ask what you can expect for those dollars, such as meeting cadence, written deliverables, tax coordination, rebalancing discipline and how recommendations will be documented.

Making better decisions

The real goal isn't simply to find the lowest fee. It's to find the right experience, the right process and the right fit for the problem you're trying to solve.

Once you know the job, understand the services and confirm the credentials, the conversation about price finally becomes meaningful.

When you follow this order, you don't just get clearer answers about fees. You make better decisions about the advice itself, and that's what ultimately protects your money and gives you clarity about your financial future.

Ezra Byer contributed to this article.

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

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

For many Americans, there's a disconnect between what's happening on Wall Street and how they're feeling about their personal finances.

The markets have remained resilient despite periods of volatility. But many people nearing retirement are worried about whether their money will last.

Much of that anxiety stems from inflation, which, for the first time in three years, is now outpacing wages.

That's why retirement planning shouldn't focus on cutting expenses, but rather on building a flexible income plan that can absorb higher costs over time.

Start with net income, not gross salary

Most people think they need to replace their full working salary when they retire. That's not necessarily true.

It's not just about replacing a paycheck. You need to replace the net income that supports your life today while accounting for some expenses that may go away or change in the future.

Instead of gross salary, start with your current net income. This will help you determine what you spend. Add up how much money is coming in each month and compare that to how much is going out.

Once you know what your income needs are, you can determine whether your current assets are enough, whether your retirement timeline needs to shift or whether your investment strategy should be adjusted.

Add a lifestyle and inflation cushion

One of the most overlooked tools to help combat inflation in retirement is the travel budget. Most retirees spend more on travel during the first part of their retirement and then gradually reduce that spending, whether that's owing to poorer health or simply wanting to spend more time around family.

Instead of viewing travel as a temporary expense, think of it as a built-in financial cushion for your retirement. An amount as small as 10% can provide flexibility if inflation rises faster than expected.

While that money may go toward dream vacations, new hobbies and experiences early in retirement, later on, those same dollars can be reallocated toward healthcare costs or other expenses.

Retirement spending categories shift rather than disappear. Because you know the money is there, the travel budget becomes less about leisure and more about being the buffer you need to feel confident in your plan.

A built-in buffer also helps retirees avoid overreacting to temporary market drops or cost increases.

Build the income plan around the gap

Retirement planning isn't only about how much you have saved in your portfolio. $1 million may be more than enough for one retiree but not enough for another. Your retirement depends on spending needs, income sources and your unique timeline.

Once you calculate your expected spending and account for guaranteed income sources such as Social Security or pensions, you can then identify the investment gap.

Your investment decisions should support your income needs. The strategy should be based on what you need your money to accomplish.

While some people may find out they need to work a few more years, many of the people we work with at Blue Ridge Wealth Planners are actually surprised to learn they may be able to retire sooner than expected. Income planning helps you make retirement decisions based on facts, not fear.

In conclusion

Unfortunately, inflation isn't something that you can avoid. It's always going to be a factor that you must account for when planning your retirement, but you don't have to let it eat away at your hard-earned savings. Remember:

• Inflation-proofing your retirement isn't just about investment returns
• It starts with realistic income planning and creating built-in cushions
• You then identify income shortfalls and fill in the gaps

Retirees who create room in their plan through travel budgets or spending cushions are often better positioned to handle rising costs. They can then enjoy a fulfilling and financially confident retirement.

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

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

Dear Wealth Wise: At 49, I have more retirement savings than I ever imagined. My IRA is worth almost $2 million, and I inherited my house, so there’s no mortgage. It’s worth almost $1 million, so the taxes on it are high. I also have $300K in investments outside of my IRA and a six-month emergency fund.

I’m burned out and want to take a sabbatical, which my company will not support. I would have to quit and start over. I want to spend the time traveling and seeing old friends. I have several living in Europe with whom I can stay .

I'm single, no kids, no pets. I'd use the $300K investment account and emergency fund to pay my bills while not working. I want to take a break of six months to a year. My usual expenses are about $100K a year and I make $200K, so I save a lot of my income. I'll be spending more while out of work to pay for travel and health insurance.

I’m not really worried about affording the sabbatical so much as what happens next. If I can’t get back to a big salary, do I have enough in my IRA on which to retire? Is there anything I’m missing in my sabbatical plan? — Wealthy But Weary

Dear Wealthy But Weary: When you've been working hard for more than two decades, there might come a point when you feel you need a break — and not just a long vacation, but a months-long period to recharge, pursue hobbies, and take time for yourself.

Here, we have a 49-year-old reader in great financial shape, set on taking a sabbatical, even knowing it will mean starting a job search from scratch when returning. Let's see what our experts have to say about this plan, and what tweaks they might recommend.

You can probably swing the time off, but make sure to fund it the right way

Many people in their late 40s are scrambling to catch up on retirement savings. With an IRA worth close to $2 million, our reader is in the opposite boat. Between that and their $300,000 portfolio, they're in a strong position to take an extended break, says Rob Burnette, investment adviser representative and professional tax preparer at Outlook Financial Center.

"For the short term, you certainly have sufficient funds for a one-year sabbatical. Using your non-IRA investment account for living expenses is very tax-efficient and doesn’t run afoul of early distribution penalties on your IRA," he says.

However, Burnette cautions, "I would try to keep your emergency fund intact for its purpose — emergencies."

Trevor Houston, CEO at ClearPath Wealth Strategies, agrees.

"My advice is to set up a separate savings account dedicated to covering expenses during an intentional career break. Don't start raiding retirement accounts or building debt. This fund should be separate from the emergency fund. A planned career break is not an emergency," he says.

Houston also emphasizes the importance of planning for extra costs during a workforce break.

"The biggest mistake I see people make when planning a career sabbatical is assuming they only need to replace their regular paycheck," he says. "Unfortunately, things like health insurance, taxes, inflation … can end up totaling more than people may expect."

Before moving forward with a sabbatical, Houston recommends mapping out the costs, including surprise expenses that may arise, like home repairs. If your budget can support unplanned costs, you should be in good shape.

Speaking of home repairs, Mike Dunlop, CFP and co-founder at Ignite Financial, says that as a homeowner, you have an opportunity to help fund your sabbatical without raiding your investment account too heavily.

"I'd also at least have them look at that $1 million paid-off house sitting empty with a big property tax bill while they're in Europe. Renting it out might cover a good chunk of the trip," he says.

The only catch? Rental income will boost your modified adjusted gross income (MAGI), which could bump up your premiums for marketplace healthcare.

Your sabbatical year could be a good tax-planning opportunity

Giving up your paycheck for a year might be daunting, but it could serve as an opportunity to make a smart long-term tax-planning decision.

"While you have a large IRA, that is also a tax bomb that will go off when you do draw funds from it in retirement. For full tax diversity, you need to add a Roth IRA to your mix so that you have everything covered," Burnette explains.

"During the year on sabbatical," he continues, "you could look at doing some Roth conversions on your IRA while you aren’t drawing a large salary. The Roth conversion would certainly improve the status of making your $2 million in retirement assets go further when you finally retire."

Dunlop agrees that a Roth conversion could be a smart move during a planned sabbatical. But he also cautions that a conversion could lead to higher health insurance costs.

"I'd want them watching the health insurance piece, because ACA coverage can be cheap when income's low," he says. "But a Roth conversion bumps that income up and can shrink the subsidy, so those two levers work against each other."

Make sure you have a re-entry strategy

If you take a sabbatical at 49 and return to the workforce at 50, you might not be nearly ready to retire. Houston says it's important to plan for a re-entry that could take more time than anticipated.

"What happens if it takes longer than you expect, and your sabbatical savings are gone? What's happening in your industry? How might you need to adjust your career plans?" Houston says.

Dunlop says that at your age, there's some risk of age discrimination.

"The over-50 job market is real, and I won't pretend otherwise," he says.

However, Dunlop insists you have one thing going for you: You don't necessarily need to replace your $200,000 salary if you only spend $100,000 a year and have a robust IRA to fall back on. Trying to find a job is less scary when you can accept a lower number.

"The next job really only has to cover what they actually spend," Dunlop insists. "When you don't need the paycheck, you can usually interview better and hold out for something you actually want."

Enjoy your time off

There you have it. Our three experts agree that you're in a great position to take a much-deserved sabbatical. Even if you get a lower-paying job upon your return, you've built up a large enough IRA balance that you can let that money sit and grow until retirement age and still have more than enough.

If you want to approach that career break with even more confidence, it could pay to consult a professional.

"This would be a great conversation to have with a financial planner will look at all aspects of your financial situation," Burnette says.

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

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Members of Generation X grew up navigating the challenges of such video games as Pac-Man, taking care of themselves after school and riding bikes without a helmet.

Today, as they approach retirement, one of their most profound challenges will be ensuring they have enough money to see them through their later years.

Born from 1965 to 1980, Gen X is now in its peak retirement-planning years.

With retirement on the horizon, many are confronting complex questions about financial security and how to make their savings last.

If the U.S. is to avoid a widening of the retirement savings gap beyond its current estimated size of $7 trillion, it's imperative that the next cohort of retirees is better positioned to achieve long-term financial security.

Unlike the baby boomer generation, most Gen X workers have spent their careers without access to traditional defined benefit-pension plans. Instead, they've relied primarily on 401(k) defined-contribution plans.

At the same time, many are also facing major financial headwinds, including rising housing and education costs, as well as dual caregiving responsibilities for both their children and aging parents.

As a result, many members of Generation X report either insufficient savings or low confidence in their ability to make their savings last.

An opportunity for financial pros

This shift presents a significant opportunity for financial professionals. While baby boomers have been much of the industry's focus, Generation X has now entered a pivotal stage of retirement preparation.

The need for help is undeniable. About 37% of Generation X have either postponed, or are contemplating postponing, their retirement due to financial concerns, compared to 19% of boomers.

Meanwhile, nearly 20% of Americans age 65 and older remain employed — up from 11% in 1987. As Gen X progresses toward traditional retirement age, financial pressures might further expand the proportion of older Americans remaining in the workforce.

Generation X faces tough decisions about how to manage asset decumulation. While defined-contribution and IRA plans serve as effective accumulation vehicles, they're limited in their ability to convert savings into guaranteed income streams.

Annuities address this challenge by turning a sum of money into predictable payments that one can't outlive.

In addition, anticipated intergenerational wealth transfers from boomer parents might increase demand for structured income solutions, if it fits the goals of the Gen X recipient.

The fragile decade is coming

Many Generation X individuals are still years from retirement and haven't planned for comprehensive income strategies. This presents both a challenge and an opportunity for the retirement and annuity industry.

Historically, annuities are most commonly purchased by individuals age 55 to 70. Today, the oldest members of Gen X are around 60, while the youngest are now 45.

As more enter the "fragile decade" — the five years before and after retirement, the period when market volatility can severely impact long-term financial security — the importance of downside protection and income certainty becomes more pronounced.

According to trade association LIMRA, 69% of surveyed Gen X respondents indicated they would prefer an annuity over investing a $100,000 inheritance in the stock market. And 37% said they would be "most interested" in purchasing an annuity, compared with 21% of boomers.

However, 64% of respondents find annuities the hardest product to understand. This suggests a clear need for improved education and transparent communication.

While annuities are one tool in the retirement toolkit, albeit a useful one, there are several areas that Gen Xers should understand before incorporating them into their plans.

Chief among these should be understanding how the contract value can grow — for example, is the return offered by an annuity set at a fixed rate or is it tied to the stock market?

Providers often present hypothetical back-tested scenarios to illustrate potential outcomes, but as with any investment, past performance is not a reliable indicator of future results.

Equally important is evaluating the provider. Given the longevity of an annuity, they must feel confident in the insurer's ability to meet its obligations:

• How long has the firm been in business?
• What is its financial rating?
• Are you confident in their ability to pay out when due?

Other considerations

Generation X investors should also assess how an annuity will fit within their broader financial planning. Guaranteed income products are most effective when they complement, not replace, other assets and align with liquidity needs, risk tolerance and long-term retirement goals.

By the same token, there are a variety of areas that the financial-services industry should consider to enhance education and adoption among Generation X. These include:

• Deepening collaboration with financial planners to address retirement savings gaps and clarify how annuities might contribute to sustainable income planning
• Expand access through employers, including integrating annuity options into 401(k) plans and other retirement programs
• Encourage comprehensive retirement-planning discussions that include guaranteed income solutions as part of decumulation strategies
• Help reduce debt burdens and increase savings, both within and outside of retirement plans
• Support multigenerational planning, helping Generation X households balance the financial decisions of baby boomer parents and dependent millennial children
• Reframe annuities beyond retirement, using them to help fund known future expenses such as education
• Incorporate anticipated wealth transfers into long-term income planning, helping Gen X clients prepare for how future inheritances might support their retirement income strategies

Generation X is digitally fluent and accustomed to mobile financial experiences. Although the annuity industry has historically lagged in this area, substantial progress has been made in recent years to serve financial professionals and consumers digitally.

Online platforms that simplify onboarding, allow for self-service, and provide real-time income illustrations will be critical to engaging with Generation X.

Without significant change, this "forgotten generation" faces a serious risk of entering retirement less secure than any generation before it.

The retirement industry has both an opportunity and a responsibility to engage Generation X proactively to help prevent a deepening of the retirement savings crisis across a new generation.

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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.

Keith Ward, 61, is proud of his son, who graduated from college in December of 2025 with a degree in information systems. His son was focused during his studies and worked hard to build skills he thought would lead to gainful employment.

Instead, Ward's son is living at home and struggling to find work.

"He's applied to more than 250 jobs, and I think has gotten seven interview requests," Ward lamented. "Five years ago, employers would've been having fist fights to hire him."

Ward's son's experience isn't unique. The rise of AI has made an already tight job market for new applicants even tighter.

As of March 2026, the unemployment rate among recent college graduates ages 22 to 27 was 5.6%, compared with a 3.1% unemployment rate across all college grads, according to the Federal Reserve Bank of New York.

Underemployment is an equally big issue. As of January 2026, 41.5% of recent graduates were underemployed.

The Federal Reserve also found that as of May 2026, 15% of adults ages 18 to 29 who weren't working said they couldn't find a job, while 10% were working part-time because they were unable to find full-time work.

Ward's son is trying to stay positive. For now, he's working part-time in a bookstore.

"It's been frustrating for him because now he's living with us," Ward says. "He wants to be independent. He wants to be working in this field that he trained for. When he started four years ago, there was no thought that AI was going to be taking jobs."

It's not just Ward's son who's been struggling.

"My wife and I have been planning for retirement. Now we have three of our grown children living with us," Ward says.

Ward's initial plan was to retire within five years.

"But I don't think it's going to happen," he says now. "We're going to continue working until circumstances force us to do something else because we want to have a place for our kids to be."

A troubling trend

Ward's experience isn't unique. A late 2025 AARP survey found that 75% of parents are providing financial support to a child 18 or older. That's apt to impact a lot of people's retirement plans.

Julianne Coleman is 62 and plans to retire abroad with her husband. Now, those plans are on hold indefinitely as her two 20-something children grapple with the reality of today's workforce.

Her 22-year-old, who's a recent college grad, is especially struggling.

"I just don't know how someone like him who's relatively new to the workforce and relatively green is going to find something fulfilling," Coleman says. "There's all this economic uncertainty created by the AI bubble."

Coleman's daughter, who's 26, is in the midst of a career pivot after landing a job out of college that was too AI-heavy.

"She doesn't want anything to do with AI, even though she's well-versed in it," Coleman says. "She wants to move another way because of how damaging she sees it being."

In the near term, Coleman is spending her own resources to feed her grown kids and provide a roof over their heads. Her dream of retiring abroad hinges on being able to sell her home, which she can't do with her children living in it.

"If my kids were fully independent, we would downsize," Coleman says. But since her kids only have roughly $10,000 in savings each and limited job prospects, Coleman feels stuck.

"The next 15 years are critical in terms of mobility," Coleman says. She's afraid she'll lose out on an opportunity she saved for because her kids can't leave the nest.

Mostly, however, she feels for her kids.

"I'm sad for them," Coleman says. "I feel like we had it so much better."

Data from the Federal Reserve Bank of New York points to the fact that remote work is sidelining young job applicants more so than AI right now. On the other hand, Challenger, Gray & Christmas found that U.S. employers implemented 45,849 job cuts in June, largely fueled by AI. While those cuts weren't necessarily specific to younger workers, they speak to a worrying trend.

Adam Spiegelman, founder and wealth adviser at Spiegelman Wealth, says he's seeing firsthand how much young adults are struggling.

"In my 25 years as a wealth adviser, I’ve never seen anything like this year," he says. "I’ve received about a dozen unsolicited emails from college juniors, seniors and recent grads … asking to shadow me or intern at my firm. That’s never happened before."

The trend is much broader, though.

"Many of my own clients are telling me their kids and grandkids are struggling to find work," Spiegelman says. "Whether it’s inflation, the broader economy, AI or some combination, this generation is having a genuinely hard time landing that first real job, and I’m seeing it push some parents to seriously reconsider their retirement timelines."

Should you delay retirement because your kids are struggling to find work?

AI might not be the only reason your 20-something children can't find work. But should you be altering your retirement plans because of it?

Spiegelman says that while it's natural to want to help your grown children, he thinks it's important to separate support from enabling.

"I have a client right now who’s buying a home for his adult child to live in rent-free — a full-time, able-bodied adult with only a part-time job. That’s a very different situation from a family giving a new grad six months to a year of breathing room while they find their footing," he says.

As Spiegelman explains, both are examples of support, but only one has an exit plan.

"Parents need to have that conversation with each other first, before their child even graduates, and agree on what their expectations are and where the line is," he says.

Steve Sexton, retirement planning expert at Sexton Advisory Group, agrees.

"It's natural for parents to want to help their children, especially when they’ve done everything right," he says. "But the biggest thing I would tell parents is support your adult children in a way that does not quietly derail your own retirement."

That's easier said than done when your child can't find a job and might be sitting on a pile of student loans. But like Spiegelman, Sexton feels parents should put a dollar amount and timeline around the help they'll provide.

Most important, Sexton says, parents should avoid tapping retirement accounts, pausing retirement contributions, or taking on new debt to support an adult child.

"Your child has time to recover financially. You may not. A 23-year-old can rebuild from a tough job market, but a 62-year-old who drains savings … may have a much harder time catching up," he says.

You're allowed to fulfill your own dreams

Ultimately, there are many such parents as Ward and Coleman who are in a position to help their kids without necessarily compromising their finances as much as their dreams. But that's also a problem, Spiegelman insists.

"People spend 20, 30, 40 years working and saving so they can retire in their sixties, and that window to actually enjoy retirement — travel, health, time — isn’t unlimited," he says. "Continually pushing that back to subsidize an adult child who could be working is usually not serving anyone well, including the child."

If parents feel they haven’t set their kids up with the right financial habits, Spiegelman says it’s not too late to have that conversation now.

"Start charging rent after a reasonable grace period, and scale support down deliberately rather than indefinitely," he says.

Spiegelman also recommends bringing in a financial adviser or CPA as the “bad guy.”

"It’s a lot easier for a parent to say, 'Our adviser says we can’t keep this up if we want to retire on schedule,' than to have that conversation alone," he says.

Some young adults are as fiscally responsible as can be, yet have fallen victim to circumstances. That's the situation Ward and Coleman are in. They're working to make their peace with a potential change of plans.

As Ward says, "We're fortunate enough to live on five acres in a great setting. It's a large house and a good place for grandkids."

He says, "I certainly do love having the kids around."

If he's ultimately forced to delay retirement, that's at least one consolation prize.

Read More

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Retirement is supposed to be the reward for decades of disciplined saving. But for many retirees, a hidden tax problem quietly erodes what they've worked so hard to build — not through fraud or negligence, but through a lack of coordination between their income sources and their tax exposure.

Most retirees don't realize they're overpaying until after the damage is done. In retirement, the biggest tax triggers aren't wages — they're the benefits and accounts you spent a lifetime accumulating.

Understanding how they interact is what separates a tax-efficient retirement from an expensive one.

How IRA withdrawals can make Social Security taxable and Medicare cost more

Your income in retirement flows from multiple sources: Social Security, IRA withdrawals, investment income, sometimes a pension.

Each is governed by its own rules. The problem is that these streams don't exist in isolation. They stack on top of one another, and the IRS adds them together when determining what you owe.

A retiree who pulls $40,000 from an IRA to cover living expenses may not realize that withdrawal just made more of their Social Security taxable, bumped their Medicare premiums, and pushed them into a higher tax bracket.

None of those outcomes required earning a dollar more. They were triggered purely by the order and size of withdrawals from accounts they'd already paid into for decades.

Social Security: How much of your benefit is taxable

Whether your Social Security benefit is taxed depends on your provisional income: Adjusted gross income, plus tax-exempt interest, plus half of your Social Security benefit.

For individuals, once provisional income exceeds $25,000, up to 50% of benefits become taxable. Above $34,000, that rises to 85%. For married couples filing jointly, those thresholds are $32,000 and $44,000, respectively.

These thresholds have not been adjusted for inflation since they were established in the 1980s and 1990s. That means a retiree in 2026 with a modest lifestyle can easily find that 85% of their Social Security is taxable, not because they're wealthy, but because the brackets never kept pace with rising benefit amounts and retirement account balances.

RMDs: The income you're forced to take whether you need it or not

Required minimum distributions begin at age 73 (under the SECURE 2.0 Act, the starting age for RMDs will increase to age 75 for individuals born in 1960 or later). The IRS requires a calculated percentage of your tax-deferred accounts to be withdrawn each year, regardless of whether you need the money.

On a $1 million IRA, the first RMD is roughly $36,000 to $40,000. That amount grows as a percentage of the account each year.

Because RMDs count as ordinary income, they don't just generate their own tax bill. They push provisional income higher, which makes more of your Social Security taxable.

They can move you from the 12% bracket to the 22% bracket. They can trigger IRMAA surcharges on Medicare premiums that won't show up until two years later.

For retirees who spent decades deferring taxes to build a larger account, the RMD is often when the full bill arrives, on the IRS's schedule, not yours.

IRMAA: The Medicare surcharge most retirees don't see coming

The standard Medicare Part B premium in 2026 is $202.90 a month. But that is only what lower-income beneficiaries pay. Once your modified adjusted gross income crosses certain thresholds, you pay significantly more through IRMAA surcharges, and the lookback period means the income that triggers those surcharges was reported two years earlier.

For a married couple filing jointly, crossing into the first IRMAA tier costs $2,297 a year. Moving from Tier 1 to Tier 2 adds another $3,475, bringing the couple's total annual surcharge to $5,772. At the top tier, the combined Part B and Part D surcharges reach $13,872 a year for a couple on Medicare together.

The cliff structure matters: Exceeding a threshold by even one dollar triggers the full surcharge for that tier. A retiree who crosses an IRMAA threshold owing to a one-time Roth conversion or asset sale will pay elevated premiums for the entire following year, regardless of whether income normalized.

What to do about it

This is where most retirement plans fall short. Knowing these rules exist is not the same as having a strategy around them. Here is what proactive planning looks like in practice.

1. Use the pre-RMD window for Roth conversions.

The years between retirement and age 73 are often the most underused planning opportunity retirees have. During this window, income is typically lower, brackets are more favorable and there are no required distributions yet.

Converting portions of a traditional IRA to a Roth account during this period means paying taxes at today's rates on a smaller balance, reducing the size of future RMDs, lowering provisional income in later years, and shrinking the Social Security tax exposure and IRMAA risk that come with large mandatory withdrawals.

The right conversion amount each year is the one that fills your current bracket without crossing into the next one or triggering an IRMAA tier.

2. Sequence withdrawals with the bracket in mind.

The order in which you draw down accounts determines your tax rate each year. A common approach is to spend from taxable brokerage accounts first, then tax-deferred IRAs, then Roth accounts last.

But the more useful framework is to think about filling your current bracket each year deliberately: Taking enough from tax-deferred accounts to use the lower brackets fully, while leaving Roth assets intact to avoid pushing income higher when you don't need to.

3. Map your IRMAA exposure two years out.

Because IRMAA is based on income from two years prior, you need to be thinking about Medicare premiums before you're on Medicare.

A retiree who does a large Roth conversion at 63 needs to understand the Medicare premium implications at 65. The specific IRMAA thresholds for 2026 for married couples filing jointly start at $218,000 in MAGI.

Staying below a threshold is worth real money, and in many cases a modest adjustment to a conversion amount or the timing of an asset sale is enough to avoid crossing a tier entirely.

4. Use qualified charitable distributions (QCDs) to satisfy RMDs tax-free.

Retirees who are 70½ or older and charitably inclined can distribute up to $111,000 a year directly from an IRA to a qualifying charity. That amount counts toward the RMD requirement but does not appear as taxable income.

For a retiree who gives regularly, routing those gifts through a QCD rather than writing a check from a bank account eliminates a dollar of ordinary income for every dollar donated, which reduces provisional income, protects Social Security taxation rates and can keep MAGI below an IRMAA threshold.

The bottom line

Overpaying taxes in retirement is rarely the result of one bad decision. It is the result of income sources that interact in ways most retirees never planned for, because no one mapped those interactions before distributions began.

The strategies above are not complicated, but they require lead time, comprehensive financial planning and strategic coordination. Roth conversions done at 67 change what your RMDs look like at 73. Income decisions made at 63 affect your Medicare premiums at 65.

The retirees who pay the least in taxes are not the ones who earned the least. They are the ones who planned specifically for the way retirement income actually works, before the compounding consequences had already arrived.

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

Every retirement plan is built around the same fear: Outliving your money. The industry has developed sophisticated tools to address it.

• Monte Carlo simulations model the probability that a portfolio will survive 30 years of withdrawals
• Safe withdrawal rates are debated to the decimal point
• Longevity risk is taken seriously

The research has identified a different risk, one that is statistically more common, demonstrably more devastating and absent from virtually every financial plan in circulation.

The risk is outliving your mind.

A 2025 systematic review in Health Psychology Review confirmed what longitudinal research has been building toward for a decade: Retirement is associated with measurable cognitive decline, not only because people age but because structured cognitive demand disappears.

Researchers gave the mechanism a name: The mental retirement hypothesis. When the brain is no longer required to perform at the level a career demanded, it follows the body's example and withdraws from challenge. The decline is not inevitable. It is, however, predictable — and far more preventable.

The professor

Margaret spent 41 years as a professor of developmental psychology at a major research university. She published extensively, advised doctoral students, taught graduate seminars and worked at the edge of her discipline for three decades. She retired at 68 with a comfortable pension and her health intact. Within 16 months, she quietly realized that something she had always taken for granted was beginning to slip.

She knew the research. She had assigned papers on neuroplasticity and cognitive aging to her students. She understood, at a scholarly level, exactly what was happening. She simply had not planned for it.

What work does for your brain

The workplace offers something most people never consciously notice until it is gone: A daily cognitive stimulus framework they did not have to design.

• Novel problems arrived uninvited
• Deadlines imposed urgency
• Colleagues challenged assumptions
• Students asked questions with no clean answers
• The environment kept the brain engaged

Margaret's career was among the most cognitively demanding. Her days required reading new research, evaluating evidence, constructing arguments, defending conclusions under peer scrutiny and translating complex ideas for audiences that expected precision. None of it was easy. All of it was, neurologically, exactly what the brain requires to sustain function.

This is where the research presents an inconvenient finding for high achievers: The steeper the cognitive demands of the career, the steeper the potential decline when those demands end. Retirees from high-complexity occupations, such as physicians, executives, lawyers and academics, face the greatest gap between career-level cognitive engagement and the engagement that retirement, by default, provides.

The person who built the most sophisticated mind is, in the absence of deliberate design, at the greatest risk of watching it diminish.

Margaret's retirement did not end her paycheck. It removed the daily stimulus her brain had organized itself around for four decades. The seminars ended. The doctoral students graduated. The editorial reviews stopped arriving. The conferences, the department meetings, the weekly urgency of a discipline that never stopped moving — all of it faded within a single academic year.

What replaced it was quiet and comfortable. And, by the standard the research now applies, cognitively insufficient.

The antidote isn't what you think

When people learn that cognitive engagement protects the aging brain, the response is predictable: Crossword puzzles, brain-training apps and sudoku. These feel like the right answer. They are not wrong, exactly. They are simply not enough.

The research draws a distinction most people miss. Practicing a skill you already possess is maintenance. The brain grows through novelty, not repetition. A crossword puzzle that takes 45 minutes is not the same as a problem with no known solution that requires you to build new mental frameworks to approach it. The first sustains what is already there. The second creates something new.

Researchers at Binghamton University have identified social engagement as, in their words, "simply the single most powerful factor for cognitive performance in old age," ranking it above brain games, supplements, and even formal education. The engagement they describe is social complexity: Relationships that require reading another person, managing disagreement, sustaining a connection through difficulty and being genuinely accountable to another person's expectations.

The research consistently identifies three protective conditions:

• Novel learning, meaning acquiring skills and knowledge you do not already possess
• Social engagement with real complexity and mutual accountability
• Purposeful challenge, meaning goals that require sustained effort and carry real consequences

Margaret's daily crossword does not meet the level of challenge her brain requires. A structured role mentoring junior faculty two mornings a week meets all three. She is learning how her discipline has evolved since she last taught it. She is accountable to people who need her. The outcomes matter. The cognitive demand is functional, not decorative.

The distinction is not about difficulty. It is about demand and whether that demand is connected to something with genuine stakes.

Designing the cognitive portfolio

The financial planning vocabulary that dominates retirement conversations offers, perhaps unintentionally, a useful frame.

A well-managed financial portfolio is diversified across asset classes, actively monitored and adjusted as conditions change. Left unmanaged, it is exposed to risks the owner has not accounted for.

The same logic applies to what might be called the cognitive portfolio: The collection of activities, relationships and challenges that keep the brain operating at a level commensurate with its capacity.

Most retirees do not deliberately manage their cognitive portfolio. They leave it to chance — and chance, without intention, follows the path of least resistance.

Three non-negotiables belong in a well-designed cognitive portfolio:

Novelty. Learning something genuinely new, not merely practicing what is already mastered. A retired professor of developmental psychology who is learning a new language, building furniture or navigating a community board where she holds no authority qualifies. A retired professor reviewing papers in her own specialty, while valuable, does not yield the same neurological return.

Social complexity. Relationships with real stakes, mutual accountability and the productive friction that keeps the mind alert.

Purposeful challenges. Goals that require sustained cognitive effort and carry consequences the retiree genuinely cares about.

For Margaret, this meant three commitments in her second year of retirement:

She joined a community mediation program, a field where her expertise did not transfer and her credentials carried no weight

She accepted an invitation to co-teach a public seminar with a colleague 30 years her junior, a role that required her to learn as much as she taught

And she began meeting weekly with two graduate students whose dissertation committees she had agreed to serve on as an external reader

None of it re-created her career. All of it replicated the conditions her career had provided: Novel inputs, social accountability and a goal that demanded her best thinking.

Intellectual stimulation is one of the five pillars of a fulfilling retirement. Among the five, it is the one most often treated as supplementary. Research on cognitive decline suggests it is anything but. It is load-bearing.

A different kind of risk management

Margaret knew the theory. She had spent four decades teaching it. The gap in her retirement plan was not ignorance; it was application. She understood, in the abstract, that the brain requires challenge to sustain function. She had simply not built that requirement into the concrete architecture of her daily life.

That gap is not unique to academics. It is the structural condition of traditional retirement applied to a brain that was never designed to stop working.

The paradox the research holds without resolving, the very qualities that made a career exceptional, such as the appetite for intellectual challenge, the drive toward mastery and the need for work that matters, are the same qualities that make retirement cognitively risky when they are not deliberately redirected. The high achiever's greatest professional asset becomes, without intentional design, the high achiever's greatest retirement vulnerability.

Financial planning has developed precise tools for managing money over a 30-year retirement. It has not yet developed equivalent tools for managing the mind over the same span. Both are depletable. Both respond to how they are managed. Both require a strategy.

Every retirement plan should answer two questions. The first is familiar: Will the money last?

The second has been absent from the planning conversation for too long.

Will the mind?

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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

The family vacation is taking up a much larger share of the budget in 2026.

The cost of airfare is up more than 26% compared to last year, according to research from NerdWallet, mostly because of the higher price of oil.

When you add inflation's impact on hotels and dining, you're looking at a pretty penny for the average family of four.

It would be fair to question how much one vacation can really impact a long-term retirement plan.

However, it's not the vacation causing trouble — it's how you pay for it that could have long-term ramifications. One in three travelers who put their summer vacation on a credit card in 2025 are still paying it off today, another NerdWallet report found.

That accumulation of long-term, high-interest debt is what makes plans veer off track.

As the cost of living continues to rise, managing spending may need to move higher up the priority list in your financial plan.

Whether you're considering vacations, home renovations or buying that boat you've been dreaming about, here are three questions you should ask yourself before making a major spending decision in 2026.

1. Will the purchase put me in debt?

High-interest debt is a wealth killer. If you take the cost of your proposed vacation and add 24%, are you happy with the figure that comes out? Not all debt is inherently bad, but rolling credit card balances for unnecessary purchases certainly can be.

You can always cut costs on the vacation plans. Maybe you scale back the timeline of your visit or choose a road trip instead of a flight overseas. The value of a vacation doesn't come from the dollar amount spent, but from the time spent with family or friends.

There are always expenses that can be removed or reduced to bring your spending in line with your long-term plan. Making your purchases outright is always better than letting thousands of dollars accumulate on your credit card. If that debt is going to linger beyond your return date, consider when and where you can save along the way.

2. Does this purchase align with my priorities?

The most frugal among us may call vacations frivolous spending. Others will say that vacations are essential to relaxing, refreshing and allowing us to return to work rested and ready.

Burnout is a real consequence of the work-driven mantra that America loves to push. If a vacation is essential to your wellbeing, then by all means, make it happen.

That said, any large purchase should be in line with your long-term priorities. Does this short-term expense build toward your goals, or does it hinder them?

That answer will look different for every individual, but if you find yourself agreeing with the latter, there are alternatives to travel that can be equally rewarding.

One example is a home renovation. There's more of an investment in your purchase, which will keep you in line with your long-term plan. For instance, the rise in remote and hybrid jobs has made expansive home offices an increasingly valuable feature.

Meanwhile, finishing and renovating your basement is shown to have a potential 70% return on your investment.

Renovating your home may not be as restful as a vacation, but it's the kind of mentality to consider as costs rise and you find your plan being stretched to the limits. Is there some way to put your hard-earned dollars toward a purchase that returns value in the long run, is more in line with your priorities and still gives you satisfaction?

3. Will this impact my long-term goals?

A singular major purchase rarely determines whether or not someone retires successfully. But repeatedly overspending or delaying retirement contributions can. Will this vacation dig into your emergency savings? Will the impact be temporary or become an ongoing financial burden?

Vacation spending can be a slippery slope. You're getting away to enjoy yourself, and it's not enjoyable to type every purchase into a budget while you walk along the beach. It is enjoyable to get a few extra cocktails or room service. The dollar amount spent could end up much higher than you intended.

Time to decide

More and more families are living paycheck-to-paycheck across the country. This year, you may benefit from skipping a major purchase.

If you do decide to go away, make sure the trip doesn't compromise your good money habits. That means keeping savings intact, staying out of debt and keeping your retirement contributions on track. The goal is that your long-term plan remains in place, regardless of where you choose to spend your money.

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

The financial professionals who contribute to Kiplinger's Adviser Intel are always here to share expert insights on wealth building and preservation.

They've recently written about the lessons in Belle Burden’s New York Times bestseller, Strangers: A Memoir of Marriage, and what can happen when a wife blindly trusts her spouse with the family finances.

This quiz is designed to test how much you know. (And don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.)

Please note that this quiz has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or financial advice.

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• I'm a Financial Planner and an Only Child: Here's How to Navigate Your Parents' Older Years Solo (and Why I'd Recommend a Postnup)

When you're building wealth for retirement, it's often advisable to go heavy on stocks so your money can grow. But as retirement nears, it's common to reduce your exposure to stocks and shift more of your assets into bonds for stability and predictable income.

There's no single "optimal" allocation between stocks and bonds to aim for in retirement. The famous 4% rule for retirement withdrawals assumes a fairly equal stock/bond split, but there's wiggle room in that formula.

That sort of split doesn't work for everyone, though. Recent findings from Fidelity show that 38% of retirement savers ages 65 to 69 may have a higher stock allocation than what's typically recommended. The same holds true for 50% of savers 70 and over.

On the flipside, T. Rowe Price, in collaboration with MIT Sloan and Stanford, found last year that 10% of retirement savers prefer to avoid stocks completely.

Of course, the reason why financial experts might advise against that is clear. Retirement can last for decades, during which time inflation can easily erode purchasing power. Stocks have historically beaten inflation over the long term. And dumping stocks completely could mean losing buying power through the years.

But that doesn't mean ditching stocks completely isn't reasonable for some retirees. There are certain scenarios where a stock-free portfolio can get the job done.

1. When you have enough guaranteed income to cover your costs

Getting rid of stocks in your portfolio may stunt its growth during retirement. But that's not necessarily a terrible thing if you don't need your portfolio to cover your expenses and would rather have the peace of mind.

"This strategy could be good for someone who is looking for very low risk," says Joel V. Russo, Founder and Principal at NJ Retirement Planning, LLC. "After years of owning and riding the highs and lows of the stock market, retirement sometimes sets the tone for leaving that risk of loss behind."

As Russo explains, if your fixed income, Social Security, and/or pension cover all of your overhead, then the risk of owning stocks may not be worth it. And if more income is needed, he says, products like annuities could help bridge the gap.

Scott Schuebel, CEO and Managing Partner at Statera Advisors, agrees.

"Ironically, the retirees who can often afford to take the most investment risk are often the ones whose essential expenses are already covered by predictable income," he says. "Because they aren't relying on their portfolio to pay next month's bills, they can be more patient during market downturns and give their investments time to recover."

That said, people whose expenses are covered do not need to take on the risk of holding stocks in retirement if they don't have the appetite for it.

"If market volatility causes someone to panic and make poor decisions, a more conservative portfolio may actually produce better real-world outcomes even if the expected return is lower," Schuebel insists.

2. When you have a giant pool of money to work with

In June, Fidelity reported that the average 401(k) balance was $258,800 among savers 65 to 69 and $264,000 among those 70 and over. (Keep in mind that average balances are inflated by the very wealthy.)

With a smaller nest egg, ditching stocks becomes harder. But Diana Richey, JD and CFP, says that with a large enough savings balance, avoiding stocks is less of a problem.

"For a couple in their 70s with, say, $8 million, $200,000 in annual spending, and health concerns, it can be perfectly reasonable to avoid stocks," Richey says. "At a 4% yield, the portfolio could generate about $320,000 a year before taxes — more than enough to cover their current spending and provide a cushion for inflation and potentially long-term care."

Richey insists that someone with a large asset base does not need to take stock market risk they can afford to avoid.

"A diversified portfolio of high-quality bonds and cash could protect principal, reduce stress, and preserve assets for heirs," she says. "If the goal is security rather than maximum return, skipping stocks can make sense."

3. When you have health issues

Russo points out that health concerns are another reason to consider dumping stocks completely.

"Maybe you're unhealthy or [expect] a shorter retirement than normal," he says. In that case, it pays to look at investments and vehicles that can provide income for a shorter period of time.

Schuebel agrees.

"If a retiree has a serious medical condition and their planning horizon is measured in just a few years rather than decades, preserving capital and ensuring liquidity often become more important than long-term growth. At that point, the purpose of the portfolio changes," he says.

Of course, just because you have health issues and are more focused on short-term needs doesn't mean you don't have a spouse to think about. But in that situation, rather than turn to the stock market, you could try locking in more guaranteed income.

Delaying a Social Security claim until age 70, for example, may result in a smaller lifetime benefit for you if you have health issues. But it could leave your spouse with a more robust survivor benefit.

Stocks may not be as "unsafe" as you think

There are clearly some use cases for ditching stocks entirely in retirement. But before you do, consider that with a well-diversified portfolio and cash cushion, keeping a portion of your portfolio in the stock market may not be the risky move you think it is. And by avoiding stocks, you take on a different type of risk—losing out on buying power over time.

As Russo says, "If a long retirement is in your future, keeping pace with inflation could be tough with just safe investments."

With a long horizon, keeping even a small amount of money in stocks could put you in a stronger financial position later in life.

"Retirement could last nearly 30 years," Russo says. "You could actually find you’ve lost out on opportunity costs by not participating in a long bull market run."

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The allure of retiring to Florida can be strong. Palm trees, sandy beaches, warm weather and zero income tax drive retirees in droves.

But for some, Florida isn't what they expected. Sure, they save money on income taxes, but the hefty homeowners' association fees and skyrocketing insurance premiums more than cancel that out. That doesn't include the hurricanes, persistent humidity, heavy traffic and overcrowding.

These retirees want what Florida promised, but on a more manageable scale. They can get that from what is known as "half-back" states, which offer tax-friendly policies, mild weather and a lower cost of living.

For Northeasterners, they sit perfectly between Florida and their old hometowns, keeping them within an easy day's drive of the grandkids. They might not check off every box that Florida offers, but what they lack, they make up for in their own unique charm and appeal.

If you're ready to say goodbye to Florida's heat and high HOA fees, here are four half-back states that might be right for you.

Why Georgia is a top pick for ex-Florida retirees

Georgia might tax your income, but it offers other advantages that make it appealing to disillusioned Florida residents, including no tax on Social Security benefits, no estate or inheritance tax and low property taxes.

There's also the Georgia homestead exemption, which lowers property taxes for homeowners through the reduction of some county and school taxes. It is offered at a set amount by the state of Georgia, but some counties offer higher amounts. People age 65 and older might be granted an additional exemption.

Beyond taxes, Georgia offers warm weather without the extremes of Florida. Winters are mild, with temperatures dropping to around 60 degrees. Summers are hot, with temperatures reaching into the 90s, but not as humid as Florida.

Homes are more affordable in the Peach State. A two-bedroom house costs about $335,358, while a one-bedroom rental is around $1,440 per month. That compares with $378,126 and $1,693, respectively, in Florida.

Georgia also gives retirees something that Florida can't: geographic diversity. Retirees can live near the historic streets of Savannah or in the peaceful Blue Ridge Mountains. In Georgia, you get it all: mountains, the coast and small, charming towns dotted all over the state.

North Carolina: Milder seasons without the humidity

You won't get the year-round summers that you do in Florida, but you also don't have to worry about oppressive humidity in the Tar Heel state. North Carolina offers retirees a four-season climate, but milder. Temperatures hover around 50 degrees in the winter and 90 degrees in the summer.

While North Carolina taxes your income, it exempts Social Security benefits and doesn't have an estate or inheritance tax. You can purchase a two-bedroom home for around $340,430 in North Carolina, which is cheaper than in Florida. Prefer to rent? A one-bedroom apartment is about $1,362 per month in the state.

Just as in Georgia, you get the best of both worlds in North Carolina — the Blue Ridge Mountains, which offer stunning views and great hiking trails, and the Atlantic coast. There's also city life, thanks to Charlotte, home of the Carolina Panthers professional football team and the Charlotte Hornets, its professional basketball team. It's even closer than Florida if you're visiting friends and family in the Northeast.

South Carolina: A taste of Florida closer to home

South Carolina gives you a taste of Florida with miles of sandy beaches, southern charm, plus a slice of the Blue Ridge Mountains. Home to historic coastal cities and pristine golf courses, South Carolina is a popular destination for half-back retirees because of the mild weather and low cost of living. Temperatures during the winter are around 60 degrees; In the summer, they hover around 90 degrees.

South Carolina taxes your income, but you don't pay taxes on your Social Security. You can also deduct up to $15,000 of your individual income or $30,000 for couples filing jointly. Your heirs won't have to worry about paying an inheritance tax. The average cost of a two-bedroom home is $309,323, while a one-bedroom apartment goes for $1,412 per month.

Tennessee: No income tax and mountain living beyond the coast

You won't find sandy beaches in Tennessee, but you will find a mix of rolling hills, mountain peaks and the birthplace of country music.

Home to Dolly Parton's theme park, Dollywood, Tennessee offers retirees a mild climate, a low cost of living and quick access to friends and family in the Northeast. In Tennessee, retirees can choose to live in the mountains of Gatlinburg or Pigeon Forge, or at the center of world-class music culture in the rolling hills of Nashville.

As with Florida, Tennessee doesn't have a state income tax, nor does it tax Social Security or withdrawals from retirement accounts, such as 401(k)s and IRAs. There is no inheritance tax, and property taxes are low. You can get a two-bedroom home for an average of $338,769. Monthly rent for a one-bedroom apartment is $1,365.

Is a half-back move right for your retirement?

Florida might have been your lifelong dream for retirement, but don't beat yourself up if it didn't work out. You aren't alone. The good news is there are plenty of half-back states you can call home. Some offer you the sandy beaches of Florida, warm summer months and a vibrant coastal lifestyle. Others offer geographic diversity, a lower cost of living and proximity to family and friends.

But before you move to one of these half-back states, do your homework, crunch the numbers and test drive before making it permanent.

Methodology: To select the best half-back states for retirees, we looked at the proximity to Florida, the average price of a two-bedroom home based on Zillow, and the average rental price for a one-bedroom apartment, according to Apartments.com. We also looked at the average temperatures in the winter and summer months, activities for retirees and the tax treatment in the state.

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Some of the most financially anxious retirees aren't the ones who failed to save. They're the ones who did almost everything right.

They built the portfolio, paid off the home, delayed gratification and made thoughtful decisions for decades. Then retirement arrives, and something surprising happens: The spreadsheet says they're secure, but they still don't feel free.

For affluent retirees, and many of the clients I help as a financial professional with three decades of experience, financial confidence doesn't automatically appear once a certain net worth is reached.

Uncertainty can grow alongside wealth. The stakes feel higher. The decisions feel more consequential. The definition of "enough" keeps changing.

Wealth solves many problems, but it doesn't automatically resolve the emotional questions that come with retirement:

• Can we afford to help our children?
• What happens if one of us needs care?
• What if the market falls early?
• How much can we spend without becoming reckless?

These aren't just investment questions. They're life questions with financial consequences.

Fear changes over time

Most people spend their working years focused on accumulation.

• Early in life, the fear is not earning enough
• During peak earning years, it becomes losing momentum
• In retirement, it shifts again — to running out, becoming dependent, watching healthcare costs rise, or leaving a spouse exposed

Data from the Employee Benefit Research Institute (EBRI) underscores the pressure. A couple retiring today at 65 might need up to $469,000 in savings just to cover healthcare and medical expenses throughout retirement, not counting long-term care — and someone turning 65 has a 70% chance of eventually needing some form of it.

Tax law adds complexity on top of uncertainty. Even with major provisions now permanent, planning details continue to shift. The SALT (state and local tax) deduction cap — currently $40,400 — is set to revert to $10,000 in 2030, a meaningful change for high-income retirees in certain states.

The point isn't to track every rule change. It's to build a plan flexible enough to adapt when they happen.

"Enough" isn't just a number

Many retirees assume confidence will follow once they reach a certain portfolio value. But "enough" isn't only mathematical. It's personal:

• Enough for lifestyle
• Enough for healthcare
• Enough for family support
• Enough for legacy
• Enough permission to enjoy the life that decades of discipline helped create

Without a clear definition, "more" becomes the default goal forever — more savings, more caution, more waiting, more postponement. That can leave even successful retirees living as if they are still behind.

The first step is defining the money's purpose.

• What lifestyle do you want to protect?
• What experiences matter while you are healthy enough to enjoy them?
• What do you want to leave behind — and for whom?
• Where are the limits around supporting family?

Until those questions are answered, no portfolio balance will provide lasting peace of mind.

Separate the money by purpose

One reason retirement feels emotionally difficult is that many investors treat every dollar the same. A dollar set aside for next year's income sits in the same mental bucket as one meant for legacy or long-term growth. When markets fall, every dollar feels threatened.

A better approach is to assign different jobs to different parts of the plan:

• One portion for near-term lifestyle and income
• One for protection needs such as healthcare or a surviving spouse
• One for growth and legacy

Think of it as building a permission structure — each pool has a purpose, and spending from the right pool at the right time stops feeling reckless and starts feeling intentional.

This does not eliminate volatility. But it changes how retirees experience it. A retiree who knows near-term income is covered can let long-term assets ride out a downturn — because they don't need to sell.

Confidence comes less from the "perfect" allocation and more from knowing why each piece of the plan exists.

Stress-test the plan, not just the portfolio

Most retirees focus heavily on investment performance. But the scenarios most likely to disrupt retirement confidence are often broader than returns alone:

• A long life
• A major market decline in the first decade
• A long-term care event
• The death of a spouse
• A shift in tax law

A retirement plan should be tested against the situations that are the most worrying, not just average conditions. That doesn't mean every risk can be eliminated. It means the retiree can see where the plan is strong, where it's vulnerable and what decisions might improve resilience.

For many people, confidence begins when vague fears become visible scenarios. Once a concern can be modeled and planned for, it stops being paralyzing.

Beware the psychology of scarcity

Some affluent retirees continue to operate emotionally from earlier-life financial insecurity. It shows up as oversaving, underspending, holding excessive cash or declining to help family even when the plan easily supports it.

This isn't irrational. It's conditioning.

A person who spent decades being careful with money doesn't automatically become comfortable using it. A retiree might keep $300,000 or $400,000 sitting in a savings account because it "feels safer," even when the rest of the plan is strong.

Another might postpone a long-awaited trip — not because they cannot afford it, but because spending still feels like a threat.

The goal isn't to shame that behavior. It's to name it — and show that a clear, tested plan can replace anxiety with intention.

A plan can create permission

Consider David and Carol, both 68. They had $4.2 million invested, a paid-off home and pension and Social Security income that covered most of their fixed expenses. By any traditional measure, their plan was strong.

But they still felt stuck. They had postponed a trip to Portugal for three years. After a rough stretch in the market, they moved $380,000 into a money market account "just to feel safer." They hesitated before picking up dinner with their adult children.

The breakthrough didn't come from a better return. It came from seeing their plan tested against the scenarios they feared most:

• A major market decline
• A long-term care event
• The death of one spouse
• Both living well into their 90s

Once they saw their lifestyle remained intact across each of those scenarios, the question changed. It was no longer, "Can we afford this?" It became, "What are we waiting for?"

Six weeks later, they booked a trip to Portugal.

That's the power of a permission plan.

Wealth should create clarity, not hesitation

The goal of financial planning isn't simply to accumulate more. At some point, the deeper work is helping people trust the life their discipline has already made possible.

Wealth should not become another source of hesitation. Properly planned, it becomes a source of clarity — the freedom to spend with purpose, give with intention and make decisions from confidence rather than fear.

True financial confidence isn't just knowing what you have.

It's knowing the purpose of your wealth.

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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.

In today's financial advice marketplace, consumers are bombarded with marketing messages from financial advisors, wealth managers, brokers, insurance agents and investment firms — many of whom describe themselves as "fiduciaries," "wealth advisors" or "financial planners."

For the average investor, the differences can be difficult to understand.

That confusion is exactly why the National Association of Personal Financial Advisors — better known as NAPFA — was established as a nonprofit trade and membership organization more than 40 years ago.

The organization's original purpose was not complicated. It was designed to help consumers find financial advisors who provide comprehensive financial planning without the conflicts created by commissions or the sale of financial products.

The clearest explanation of NAPFA's original mission can still be found in its Articles of Incorporation dated January 16, 1984.

The four founding purposes of NAPFA were:

• To foster the practice of comprehensive, fee-only financial planning.
• To provide opportunities for financial planners to increase their skills, knowledge, techniques, methods and tools of practicing financial planning.
• To promote public awareness of financial planning and the alternative of fee-only financial planning assistance.
• To establish and enforce criteria for its membership with regard to the sales of financial products.

Defining NAPFA's primary purpose

The first purpose statement may be the most important because it defines NAPFA's central mission: "To foster the practice of comprehensive, fee-only financial planning." This sentence deserves careful attention because the founders of the organization intentionally selected every word

"To foster"

"Foster" means to encourage, promote, develop and support.

NAPFA was not formed merely to observe the financial planning profession. It was created to actively encourage the growth and advancement of a particular type of financial planning model that the founders believed better served consumers.

The organization was intended to champion and strengthen this approach to comprehensive, fee-only financial planning advice.

"The practice"

"Practice" implies an ongoing professional discipline — similar to the practice of law, medicine, accounting or architecture.

This language reflected the founders' belief that financial planning should evolve into a true profession grounded in professional standards, continuing education, technical competency and ethical responsibility.

Importantly, the focus was on the professional delivery of financial advice — not simply the sale of investment or insurance products.

"Comprehensive"

"Comprehensive" means broad, integrated and complete.

Comprehensive financial planning considers the client's entire financial life rather than focusing on a single product or isolated transaction.

A comprehensive financial plan may include:

• Retirement planning
• Investment planning
• Tax planning
• Estate planning
• Insurance analysis
• Cash-flow and budgeting strategies
• Education planning
• Charitable planning
• Risk management
• Business succession planning

Think about financial planning advice that incorporates your personal net worth statement (with both your assets and liabilities), your income tax return and collaboration with your other professional advisors, such as your accountants, attorneys, bankers and insurance agents. The founders believed financial advice should be coordinated and holistic rather than fragmented or product driven.

"Fee-only"

The term "fee-only" refers to a compensation model in which the client pays the financial advisor directly . The advisor does not receive commissions or other compensation from the sale of financial products.

Under a fee-only model, compensation may include:

• Flat planning fees
• Hourly fees
• Retainer fees
• Asset-based investment management fees

But the advisor does not receive commissions for selling mutual funds, annuities, insurance products or other investment products.

The founders believed this compensation structure could reduce conflicts of interest and improve the objectivity of financial advice.

When NAPFA was founded, this distinction was especially important because most of the financial services industry operated under commission-based compensation systems tied to product sales.

"Financial planning"

Financial planning is the process of helping individuals and families make informed decisions about their financial lives.

True financial planning is typically relationship-based and long-term in nature. It involves analyzing goals, identifying risks, developing strategies and coordinating multiple areas of a client's financial life into a unified plan.

The emphasis is on advice, analysis and planning — not merely product distribution.

Why the entire phrase matters

"To foster the practice of comprehensive, fee-only financial planning" describes a very specific vision for the financial planning profession.

The founders envisioned a profession centered on:

• Objective advice
• Comprehensive planning
• Professional competency
• Consumer education
• Reduced conflicts of interest
• Compensation from clients rather than financial product manufacturers

This mission distinguished NAPFA from many traditional Wall Street brokerage and insurance industry business models that relied heavily on commissions and product sales incentives.

Many financial advisors (and financial advisory firms and standards-setting bodies) like to hold themselves out as "professional" for marketing purposes. But to me, those who are designated as NAPFA-registered financial advisors represent the very small fraction of elite financial advisors who can be called true financial planning professionals.

Why it still matters today

The delivery of financial advice has evolved significantly since 1984.

Technology has improved transparency. Investment management costs have fallen dramatically. Fiduciary standards have become more widely discussed. Consumers have more access to information than ever before.

Yet one issue remains remarkably consistent: Consumers still struggle to determine whether their financial advisor's compensation structure could influence the advice they receive.

That is why NAPFA's original purposes remain relevant. And it's why I like to write articles to explain the benefits of comprehensive, fee-only financial planning advice.

NAPFA was founded as a nonprofit membership organization with a specific mission: To promote comprehensive, fee-only financial planning and to help consumers find advisors who avoid financial product sales conflicts.

For consumers searching for objective financial advice, understanding those original purposes may provide an important starting point.

Because when selecting a financial advisor, compensation matters. Conflicts matter. And understanding the difference between financial planning and financial product sales may be one of the most important financial decisions an investor can make.

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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.

Kristie Opaleski was drowning in a sea of guilt.

In 2021, her mother and her father were diagnosed with devastating illnesses; her father with leukemia and her mother with Alzheimer’s.

For four years, Opaleski, 48, found herself driving what seemed like an endless loop from her home in Howell, N.J., to her parents’ house 45 minutes away in East Brunswick. This was in addition to working as a high school teacher and raising a teenager.

She tried hiring caregivers but her father kept firing them. She begged them to sell their five-bedroom house and move into assisted living but her father refused. The breaking point came when her father called her and shouted that her mother wasn’t making dinner for him. At the same time, her mother was calling to ask why the chicken wasn’t baking. It turned out she had mistakenly turned on a burner on the stove instead of the oven. Because her father couldn’t climb the stairs to get to the kitchen, Opaleski had to call a neighbor to turn off the stove.

After she collapsed on the floor "crying like a lunatic," her husband told her something had to change, She realized it was past time to set some boundaries.

She and her husband went to visit her parents that weekend, and she told them, "I can’t do this anymore. I can’t be everything to everyone." Now both are 83 and live in assisted care.

Everyone tells caregivers to be sure to care for themselves. But the question is — how?

"I get kind of impatient and a little irritated with 'go get a massage and have a bubble bath,'" says Deborah J. Cohan, a professor of sociology at the University of South Carolina Beaufort and author of Welcome to Wherever We Are: A Memoir of Family, Caregiving and Redemption. "Caregiving adds so many layers of stress to our lives, and then there's this added stress of all the other things you should do for yourself," says Cohan, 56, who spent most of her 30s caring for her terminally ill father.

"I know when I was in the throes of the caregiving process, there was a lot of that noise coming at me from well-meaning people," she adds.

The toll of caregiving

Almost one-quarter of adults — 63 million — in the U.S. provide ongoing care to adults or children with ongoing medical conditions or disabilities, according to Caregiving in the U.S. (PDF), a 2025 research report by the AARP and the National Alliance for Caregiving. That’s a 45% increase over a decade, the report states.

While it can be very rewarding, caregiving can also take a toll on those who do it, both on their finances and health. Caregivers may have to leave their employment, stop saving or go into debt to take care of a family member or friend. The American Psychiatric Association Foundation notes that studies show caregivers experience higher levels of stress than non-caregivers, and that women in particular (who make up the overwhelming majority of caregivers) are at risk for increased anxiety, depression and poor physical health.

Suzanne Horton, 48, a licensed mental health therapist from Tacoma, Wash., took care of her father, who suffered from cancer and kidney failure, from late 2019 until he passed away in early 2025.

"In five years, I can count on one hand how many times I truly stepped away to do something for myself," she says. "Part of that was lack of access to support, but a big part of it was fear about what would happen if I were not there." Her only break came when her father went to dialysis for four hours, six days a week, "and even though it was a break, there wasn’t a lot of space for me," she says. Her stress showed up physically and mentally. She was diagnosed with sciatica — both, she says, from the tension she was holding in her body and from transferring her father from his wheelchair to the bed or the car.

People often told Horton not to forget to take care of herself, "and in my head I would say, when?" she says. "My caregiving season has been over for a year now and I still have moments where focusing on me is hard. Taking care of me was one of the hardest parts."

Knowing you need help

Professionals hear stories like Horton’s all the time. Caregivers say they feel overwhelmed but don’t know who or how to ask for help. They’re afraid an emergency will occur just when they aren’t around and they’ll feel guilty for the rest of their lives.

Often caregivers may not even recognize they’re burning out. They become irritable and fatigued and snap at the person they’re caring for, which leads to guilt.

David LoPresti’s mother has a lifelong disability, and it was just the two of them living together, so, as he says, he "grew up inside the rhythm of caregiving."

"What I want non-caregivers to understand is that caregiver burnout doesn’t look like collapse — it looks like a competent person quietly making worse decisions for months," says LoPresti, 48. "The fix isn’t a vacation. It’s designing your life so the load is survivable." He now runs a company, ADA Compliance Professionals, which helps organizations make their websites, software applications and other digital properties accessible to people with disabilities and compliant with the law.

What does survivable look like? Everybody’s situation is different, but mental health professionals, researchers and caregivers themselves say there are strategies that have proven useful.

First of all, understand that what works for one person doesn’t work for everyone. Friends and family can offer plenty of suggestions about what you should do but often the advice is well-meaning but frustrating and repetitive. They tell you that you can’t drink from an empty cup, or remind you that you should put the oxygen mask on yourself before helping others.

"I never say those things, I find them completely ineffective, and you’re never going to be the first person to tell someone to take care of themselves — they've heard it a million times," says Barry Jacobs, a clinical psychologist who spent seven years caring for his mother with dementia. He also co-wrote the AARP Caregiver Answer Book.

"When I was my mom's caregiver, I would say 'not on my watch, nothing bad's going to happen on my watch.' It meant I was standing sentry all the time, and that wasn't very good," he says. Fundamentally, Jacobs says, people have to understand that taking care of themselves is going to help them meet the goal of taking care of their loved ones.

Often caregivers start by assuming their situation is going to be temporary, but the AARP caregiving report found that about 30% of caregivers provided care for five or more years. It’s when people realize this is not going to be a short-term situation that they understand they have to find ways to sustain themselves, Jacobs says.

"I talk about the caregiving marathon, especially caring for someone who has a progressive condition," he says. "You don't run a marathon by going all out full tilt from the moment the gun goes off and you don't run past the water station at mile five, and say 'no thank you, I’m not thirsty' to people waving water bottles. People get the idea that they have to pace and replenish themselves and if they want to meet the mission. The mission is not to run halfway and drop out."

In order to make caregiving sustainable, people also have to realize that they can’t do it flawlessly.

"I was so governed by the tyranny of perfection," says Cohan, the sociology professor who spent her 30s taking care of her father. "It was agonizing, worrying about always doing the right thing and making the right choices and second-guessing myself. I needed a way to let go."

For Jacobs, that’s where the concept of the good-enough caregiver comes in — allowing that you’ll make mistakes. And trusting your gut that you know your loved one best; while doctors and other professionals may offer helpful suggestions, don’t defer if you disagree.

Also, discard the idea that caregiving is your job alone.

"I felt that it was my family, my burden and my time to help them," says Opaleski, the New Jersey caregiver who eventually moved her parents into assisted living. But she found she had set herself an impossible mission.

She learned that she had to lean more on neighbors and extended family, which meant requesting specific tasks on a regular schedule, such as asking a neighbor to bring groceries to her parents once a week.

"I’ve had to abandon the martyr complex," she says.

A "systems failure"

For Donna Benton, an associate professor of gerontology at the University of Southern California and director of its Family Caregiver Resource Center, caregiving has been framed as a personal issue — if you can’t do it, it’s because you failed — "as opposed to a recognition it’s a systems failure. We haven’t supported caregivers as the structure of the family has changed."

Families are smaller, so there are fewer relatives to take care of aging relatives. People live longer with illnesses that once were fatal.

Benton and others have long worked to put in place policies and laws to more systemically assist the needs of caregivers. One example is the Caregiver Advise, Record, Enable Act (CARE), developed by the AARP and now enacted in most states.

It requires hospitals to record the name of family caregivers on the medical record of the patient, inform them when the patient is scheduled for discharge and provide education and instruction on the medical tasks they will need to perform for the patient at home.

On the federal level, in 2024, the Centers for Medicare and Medicaid Services took two important steps.

It put in place codes under Medicare Part B that allow healthcare providers to bill for training family caregivers of Medicare beneficiaries who have a mental or physical health diagnosis. Models developed by researchers and healthcare systems report reduced burnout from caregivers who participate in training, according to the Center for Health Care Strategies.

At the same time, the Centers for Medicare and Medicaid Services also introduced an ambitious eight-year pilot program to cover and provide coordinated care for those enrolled in Medicare who have dementia (with some exceptions) and their caregivers.

Named Guiding an Improved Dementia Experience (GUIDE), one of its goals is to address unpaid caregiver needs through improved access to education and training, support services and resources, including respite care. Explanations on how to apply to participate in the program are online.

Many people — caregivers and health care providers — don’t know about these options, Benton says, so education is key. But the fact they now exist demonstrates the growing recognition of the crucial role of caregiving and the importance of supporting it through government and other resources.

At the same time, the burden still falls on the individual to find outside resources.. That’s why a geriatric care manager, or life aging life care associate, as they’re now called, can be very helpful. Typically, such managers once worked as nurses, physical or occupational therapists, or social workers. They assess clients and help find and coordinate needed services.

The Aging Life Care Association offers a database to find such professionals locally. In addition, every state has an agency on aging with a family caregiver support program, which is often an underutilized resource, Benton says. Such agencies are listed in state government directories and the national Eldercare Locator.

Finding space

While systemwide action is needed to address the needs of caregivers, many have found that small changes can make a difference.

For LoPresti, whose mother has lifelong disabilities, it’s non-negotiable boundaries: a hard stop most evenings, one full day when he’s not reachable by the caregiving team and a standing rule that when he’s feeling depleted he doesn’t make major decisions.

Horton of Tacoma, Wash., decided to stop being the point person between her dad and other friends and relatives. Some were annoyed but it gave her peace, she says, and "if I could take a little off my plate that’s what mattered."

She also started taking care of the flowers she had transplanted from her father’s garden when he moved in with her and realized gardening gave her mind a break. Having her hands in the dirt "gave me a moment to breathe," she says.

Opaleski, the teacher from New Jersey, discovered that self-care is a combination of things — professional therapy and anxiety medication, the scheduled 20-minute venting call with a friend "who promises not to offer solutions, just a witness." It’s tea at 4:00 PM, "a small, hot anchor in a sea of medication logs and teenage angst."

And there’s humor. It doesn’t seem there would be much to laugh about in Gigi Marino’s situation — she’s been taking care of her 68-year-old husband for 15 years, when he was diagnosed with end-stage liver disease. There was hope of a transplant, but then it was complicated by pancreatic cancer, diabetes and a host of other ailments. He is now in hospice at their home in Orlando with Marino and her sister, who lives with them.

"We joke about 'death-card bingo,' trying to guess which disease will get him first," Marino, 65, says. "Strangely, our gallows sense of humor — and just being upfront and honest about the situation — is the best stress reliever, and I believe laughing our way through dozens of hospitalizations and a handful of near-death experiences has kept him alive and going."

Finding other people who understand your situation is also key, experts say, and for that many turn to support groups. There are in-person and online s groups that can be found through organizations for the aging or through those that address specific diseases such as Alzheimer’s.

Monique Frahm is a care educator who works with Trualta, a company that offers numerous free online sessions for caregivers facilitated by educators. They run for an hour and can range from 15 to more than 100 people, depending on the topic and format.

Frahm, a registered nurse, was a caregiver in her 20’s for both her parents. And she wishes she had the type of help then that she now offers. It’s a place for caregivers to find some answers, but even if the group doesn’t have a solution, "we can hear them, and we can validate them," she says. "There's going to be people in the group who say, 'Me too, I went through this six months ago.' Hearing 'I’m not alone' is so healing for people."

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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For decades, retirement planning has been seen through the lens of one question: How much do I need to save? But placing too much focus on a single number is leaving many Americans with planning gaps.

A recent study from Lincoln Financial found most Americans are unprepared for key retirement scenarios including generating income, managing healthcare costs, protecting loved ones and passing on assets. Most people aren't failing to save, but they are leaving key expenses in retirement unaddressed.

That's why investors need to start thinking about retirement differently. Not as a single number you need to reach to be comfortable, but as a "retirement stack" designed to meet your specific needs.

A retirement stack is simply financial planning built in layers. Investments are one layer. Additional layers can include plans for income, protection and flexibility, all working together to help manage real-world risks.

And those risks are getting harder to ignore.

Market swings, inflation and rising healthcare costs are prompting practical questions such as:

• What happens if the market drops right when I need income?
• How do I pay for care later in life?
• Will I have enough money if I live longer than expected?

Successful retirement planning shouldn't rely on one answer but multiple layers that prepare for several scenarios.

Here are four considerations when determining your own retirement stack.

1. Income you can rely on beyond systematic withdrawals

Most retirement plans focus on accumulating assets. But once retirement begins, the conversation shifts from growth to income.

Social Security and pensions (where available) provide a foundation, but they often don't cover all expenses. That leaves many retirees relying on withdrawals from investment accounts, which can be risky during market downturns.

This is where protected income sources, including certain types of annuities, can play a role. By creating a predictable income stream, they can help reduce the pressure to sell assets when markets are down.

2. A plan for healthcare and long-term care costs

Healthcare remains one of the largest — and most underestimated — expenses in retirement. Research from Fidelity suggests a 65-year-old retiring today could spend $165,000 on healthcare in retirement.

While many people plan for premiums and routine medical costs, fewer have a strategy to pay for long-term care. Without sufficient planning for these costs, fees are often paid out of pocket, which can quickly erode savings.

Solutions in this space, such as hybrid life insurance and long-term care coverage, can play a role in a well-rounded plan by helping you prepare for potential care needs while maintaining flexibility in how assets are used.

The sooner this type of plan is put in place, the more cost-effective it tends to be. Starting earlier typically means lower costs and less money required upfront, making it easier to build coverage over time.

3. Flexibility for a longer retirement

Retirement isn't a fixed period. People are living longer and expecting more from those years, so the challenge is planning to support a lifestyle that could last 20 to 30 years or more, making flexibility just as important as growth.

Investment portfolios are expected to serve a variety of needs, including generating growth, providing income and acting as a safety net during downturns. When markets are volatile, that can put pressure on the portfolio and create stress for investors.

A stronger approach is to define roles across different investment vehicles. Growth assets can stay focused on long-term performance, while other parts of the "stack" are positioned to provide stability or access to cash when needed.

Having the right mix of solutions in place can create peace of mind, especially during uncertain periods. It can also help investors stay committed to their strategy, rather than reacting to short-term market swings and making decisions at the wrong time.

Having at least one source of funds that isn't tied directly to market performance, such as guaranteed income or protection-focused solutions, can make it easier to stick with the plan when it matters most.

4. A clear approach to legacy and wealth transfer

Lastly, complete retirement planning looks beyond retirement itself.

Some people want to leave assets to family or other beneficiaries, so having a clear strategy for how that transfer will happen is an important part of a holistic retirement strategy.

Estate planning basics, such as creating a trust, beneficiary designations and keeping documents up-to-date, play an important role. In some cases, life insurance can also be part of the overall strategy, helping provide liquidity or ensure that assets are passed on in a predictable way.

Like the rest of the stack, this isn't a separate decision. It's part of how the pieces fit together.

Putting the stack together

The idea of a retirement stack isn't about making planning more complicated. It's about creating a strategy that more completely ties specific investment strategies to specific needs.

Market-driven investments remain an important part of any strategy, but on their own, they can leave important questions unanswered.

A well-built retirement stack brings together:

• Income for day-to-day needs
• Planning for healthcare and unexpected costs
• Flexibility to adapt over time
• Confidence to meet defined outcomes regardless of market conditions

It won't eliminate uncertainty, but it can help reduce the chances of having to make difficult financial decisions at the wrong time.

And for many investors, that's what retirement planning is about.

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

As retirement nears, it's important to reassess your investment strategy and make sure you're setting yourself up with enough income to cover your needs and meet your personal goals. And if you largely built your retirement savings by investing in the S&P 500 index, you may be inclined to stick to that strategy in retirement.

It's a strategy investing giant Warren Buffett is a fan of. In a 2013 Berkshire Hathaway shareholder letter, Buffett said that in his will, his advice to the trustee could not be simpler: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund."

But does Buffett's advice hold up today? Is going all-in on the S&P 500 a safe bet for retirement?

It's an incomplete income strategy for retirees

There's a reason financial experts often advise savers to lean on S&P 500 ETFs or index funds. They offer diversification, low costs, simplicity, and a strong record of returns over time.

As a refresher, the S&P 500 tracks the roughly 500 largest publicly traded U.S. companies by market capitalization. When you "buy the index," you get exposure to hundreds of established businesses with strong financials.

But while you may want to make an S&P 500 ETF part of your retirement income strategy,

Joseph Patrick Roop, President of Belmont Capital Advisors, says it's important to proceed with caution.

"The S&P 500 alone is not a complete retirement strategy," he insists. "The S&P 500's dividend yield is historically quite low, typically in the 1-2% range. For someone living off their portfolio in retirement, that's not nearly enough income to cover real expenses without regularly selling shares, which becomes a problem if those sales coincide with a downturn."

Of course, many financial planners today like to focus on total returns and not just yields. Retirees can, for example, harvest capital gains from their portfolios by selling shares systematically, which helps make up for the lower yield an S&P 500 ETF might produce. That total return approach, however, becomes dangerous and less viable during a market crash.

While an S&P 500 ETF may be a great tool for long-term growth, in retirement, Roop explains, it's important to focus on income. Dividend-focused ETFs, REITs, and bond ETFs may all do a better job of providing stable income when it's needed most.

As a single holding, it's inherently risky

Yields aside, another issue with going all-in on an S&P 500 ETF for retirement is volatility.

"From its March 2000 peak, the S&P 500 fell nearly 50% through the dot-com crash and didn't fully recover until 2007," Roop says. "Then, almost immediately, the global financial crisis hit, and the index fell more than 55% from its October 2007 peak to its March 2009 low. Put those two events together, and you get what's often called the lost decade."

As Roop explains, an investor who put money into the S&P 500 at the start of the 2000s may have essentially had nothing to show for it 10 years later, even though the index has historically trended upward over many decades.

"Let that sit with you for a minute," he says. "You retired in 2000, and by 2009 you would have seen your retirement life savings lose around 50% two times."

Of course, even during that lost decade, for some retirees, reinvested dividends may have kept total returns ahead of raw price returns. But given that stock valuations today are high, retirees who invest heavily in the S&P 500 could see their portfolios significantly underperform in the coming years.

Investing too heavily in the S&P 500 also exposes retirees to what's known as sequence-of-returns risk.

"It's the piece that gets lost when people say just buy the index and call it a day,'' Roop says. "A retiree who's forced to sell shares for income during a 50% drawdown locks in losses they may never fully recover from, even if the index itself eventually bounces back. The math of 'the market always recovers' works fine for someone still working and contributing. It works very differently for someone withdrawing."

Evan Mills, MBA, Associate Financial Adviser at Scholar Advising, says that while it's certainly okay to hold an S&P 500 ETF in retirement, you need assets that aren't subject to the same level of volatility.

"If you have a truly well-diversified portfolio, you can pull from bonds, you can pull from the cash you have separated from your invested assets for one to two years, and you don't have to sell into a down market," he says.

It's not as diverse an index as you might think

The S&P 500 is often touted for its diversity. But Roop cautions it isn't nearly as diversified right now as most savers assume.

"Because it's weighted by market capitalization, the largest companies dominate the index regardless of sector," Roop explains. "Today, the 10 largest companies, names like Nvidia, Apple, Microsoft, Amazon, and Alphabet, make up somewhere in the range of 35 to 40% of the entire index's weight. Technology alone accounts for roughly a third of the index by sector."

This means that if the tech sector stumbles and the bulk of your retirement portfolio is in an S&P 500 index fund, you could be looking at serious near-term losses.

Roop says that by comparison, in 1990, the 10 largest S&P 500 companies made up only about 19% of the index's weight and were spread across unrelated industries like oil, industrials, and consumer goods.

"That's not a minor shift," Roop cautions. "An investor who thinks they own 500 different companies is, in practice, making a heavily concentrated bet on a handful of mega-cap tech names."

Mills says that even though S&P 500 ETFs do lend to diversification, that's not enough.

"When you start looking at a well-diversified portfolio, it's not just equity diversification or company count diversification," he says. "You're looking at sector diversification, bond allocation, international exposure, small cap exposure. That's what people actually mean by diversification."

It's a piece of the puzzle, not the finished product

All told, there's nothing wrong with investing in the S&P 500 in retirement. But going all-in on an S&P 500 ETF isn't a wise move.

"The S&P 500 can be a reasonable building block, but treating it as a complete, stand-alone retirement strategy ignores the income problem, the very real risk that a bad few years at the wrong time can derail decades of saving, and the fact that the diversification it's sold on isn't nearly as broad as it used to be," Roop says.

Mills suggests using an S&P 500 ETF to fuel the growth portion of your portfolio but branching out to other assets that can provide more stability.

"It's really more meant to be the backbone of a portfolio than the whole body," he insists.

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Many people believe their tax bill will drop once they retire, and while that might be the case for some families, it's not a guarantee.

The thinking is logical. If you're no longer earning a paycheck, you should fall into a lower tax bracket, right? Not exactly.

Once they've left the workforce, retirees often start drawing income from multiple sources, such as Social Security, pensions and retirement accounts, all of which can be taxed.

A new set of tax considerations

For many retirees, a large portion of those retirement savings is also held in pretax accounts, which means withdrawals can be taxed as well. This can create a new set of tax considerations many retirees didn't need to deal with in their working years.

Without proper tax planning, or a clear understanding of how these income sources might be taxed, retirees could be surprised when the tax bill comes.

Although no one can predict future tax policy changes, taking time to plan ahead can give you a better understanding of how your income will be taxed under the current law. From there, you can make adjustments before retirement begins.

Estimating future income and understanding which tax bracket you'll likely fall into can help you evaluate strategies that might help reduce lifetime tax liability.

Where to start

Reviewing the balance between pretax, after-tax and tax-free accounts and determining whether certain tax strategies make sense for you is a great place to start.

If you find a majority of your retirement savings is in pretax accounts, future withdrawals might create a larger tax bill.

At the same time, converting everything into tax-free accounts isn't necessarily the right answer either.

The goal is to find the right balance between pretax, after-tax and tax-free assets so that income in retirement can be generated as tax-efficiently as possible.

A strategy that often comes up in retirement tax planning is a Roth conversion. This allows you to move money from a pretax retirement account into a Roth account by paying taxes at the time of the conversion.

Roth conversions aren't always the right decision for everyone. The more important question to consider is whether it makes sense based on your current income, expected retirement income and long-term tax strategy.

Retirement might be the end of your career, but that doesn't mean it's the end of financial planning.

Understanding how different sources of retirement income are taxed and taking time to develop a tax-efficient plan before you retire can help reduce tax burdens while giving you peace of mind and a sense of preparedness ahead of your next chapter.

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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 some people, the appeal of retiring abroad lies in the ability to live well for less than it would cost in the U.S. Others seek more affordable healthcare or a less divisive political climate. Still others, such as Karen Fifer Ferry, 68, and her husband, John, 74, are lured by love — not for each other (though the couple has that in abundance), but rather for the place they now call home.

For the Ferrys, that means Green Turtle Cay, a tiny island in the Bahamas boasting pristine beaches, crystal blue waters, picturesque clapboard houses and lush coral gardens.

The couple started vacationing there when their three children, now in their mid-thirties, were small. They kept going back, increasingly enamored of the island’s physical beauty and its warm, welcoming community of around 500 people — a place where, Cheers-style, everybody knows your name.

The couple bought a cottage there in 2012, gave up their U.S. home in Providence in 2014 and worked largely remotely. They decided to retire in the Bahamas permanently after Karen left her job as a consultant to healthcare companies in 2018 and John, a pediatrician and executive recruiter for the healthcare industry, followed suit a year later.

Since they already owned property in the country, the path to becoming permanent residents was straightforward, requiring only additional references to attest to their character, documentation of sufficient financial assets to show they wouldn’t become a burden to the government, and an application fee.

Since then, the Ferrys’ overseas retirement has had plenty of ups and a few downs. In 2019, Hurricane Dorian, a Category 5 storm, destroyed the couple’s island home; during the two years it took to rebuild, the Ferrys lived in a 17-foot trailer on their property.

Now they have a 1,400-square-foot cottage more than double the size of their old one on the narrow tip of the island, surrounded by water on three sides. Friends and family are constant visitors, and their days are full with dips in the ocean, long walks on the beach, volunteer work and plenty of porch time admiring the view. Their biggest expense is regular travel back to the States to visit their kids and four grandchildren.

It is an idyllic life, the couple say. "We were never really choosing to leave the United States," Karen says. "We just fell in love with this place."

A growing trend of retiring abroad

Like the Ferrys, more and more retirees are pursuing their version of a dream retirement in places that aren’t in the U.S. Although there are no hard data on their numbers, the trend is clear in the growing ranks of retired workers receiving Social Security benefits overseas: up 22% over the past 10 years.

Meanwhile, according to a 2025 Harris poll, more than one-third of Gen Xers and one-fourth of baby boomers have considered moving out of the U.S. Their top motivation was a lower cost of living abroad, followed by political dissatisfaction and a desire for a higher quality of life.

"It’s not that people who are considering retiring abroad don’t have the money to retire well in the United States, but more that they like the idea of being able to live better, to have an adventure and see their nest egg go further," says Jennifer Stevens, executive editor of International Living, which guides people to the best places to live and retire overseas.

Also fueling the trend: Many countries have made the route to retiring abroad easier in recent years, shifting from processes that required a large initial investment from foreigners looking to establish residency to pathways in which you can demonstrate that you have a certain minimum amount of guaranteed passive income — a stipulation often satisfied, depending on the country, by Social Security benefits alone.

Still, deciding whether to actually forge ahead and, if so, picking the right place and establishing a happy life there can be daunting.

Moving far from family and friends may feel lonely, especially if it’s to a place where you don’t speak the language. You may be hit with unanticipated costs or other snafus, and taxes and estate planning can be complicated.

For those who can make it work, though, retiring abroad really can be a dream come true, offering cultural adventure and a higher standard of living at a lower cost. Intrigued? Here’s what you need to know and, if you go, how to make the move a success.

Start with a wish list

Before Cynthia and Edd Staton made the leap to retire in a foreign country, they wrote down everything they hoped their ideal location would offer.

The year was 2010, and the couple was a casualty of the Great Recession. Both had been high earners living and working in Las Vegas — Edd in automotive services, Cynthia in luxury real estate. —and when those industries went bust, they lost their jobs and couldn’t find other work that paid enough to cover their bills. They were burning through savings and needed a big lifestyle change.

Retiring abroad felt like a viable Plan B. "We wanted to feel like we were moving toward something instead of moving away from something," says Cynthia, 73. "For the first time in our lives, we sat down and really talked about what we wanted going forward."

The place they chose, the midsize city of Cuenca in Ecuador, checked all the boxes on their wish list. The cost of living was low, and the climate was mild.

It was close enough to the eastern coast of the U.S. that they could easily travel back to see their adult children, and it was in the same time zone, which made calling and video chatting easy. The healthcare system was decent, and the amenities were modern.

Sixteen years later, the Statons are still in Cuenca, living in a penthouse apartment with a large terrace overlooking a river. They eat out when they want, enjoy gym and yoga memberships and other creature comforts, and are planning a monthlong vacation in Italy this fall. And it’s all affordable on their monthly Social Security benefits alone.

"Most months, we have enough money left to put up to 20% in savings," says Edd, 77, who along with Cynthia now offers advice to other people interested in retiring abroad via a blog, articles, books and courses on their website.

Figuring out where in the world you might like to retire starts with the kind of self-reflection the Statons engaged in, experts say. "Ask yourself, if money were no object and you could define the retirement you want, what would your days look like, what are your non-negotiables, and what would you love to have but may not be essential?" Stevens says.

Besides obvious considerations such as your budget and healthcare needs, think about whether you’d feel most comfortable someplace with a large expat community, whether you’re open to learning another language, and what you want your surroundings to be like.

Maybe you prefer an area rich with history or to live near, say, museums and concert venues, great markets if you love to cook, or plenty of golf courses if you like to play.

Then, armed with answers, consult some lists of best places to retire overseas, such as those published by International Living, Global Citizen Solutions, Live and Invest Overseas and other organizations. You can use ChatGPT, Gemini or other artificial intelligence tools to search, too, plugging in your key factors to see what pops up.

The goal is to create a personalized shortlist of countries that meet your criteria and are worthy of further investigation. Says Stevens, "Dream big first, and then let the technicalities eliminate some of the places you might be thinking about."

Go for a trial run

Once you’ve narrowed the field, take a scouting trip — or, better yet, a few — to check out places that interest you. Try living like a local while you’re there. Rent an Airbnb instead of staying at a hotel. Shop at the grocery store and cook, rather than always eating at restaurants. Hang out with expats at the local pub to hear what they say about the place.

"People often make the mistake of thinking they want to retire somewhere they love to go on vacation," says Edd Staton. "The problem is that you go on vacation to get away from your life, not for it to become your life."

Be sure to visit in the off-season. "If you go to Spain or Italy in July, the weather is great, there are festivals and great food, and everyone’s having fun," says Alex Ingrim, CEO of Liberty Atlantic Advisors, which specializes in financial advice for Americans living abroad.

"Seeing what a place is like in January, when three-quarters of the restaurants are shut down, is the real test. You need to make sure it’s the right place for you year-round."

What you want to learn from this exercise: "You can get to a place and your heart just says no, even though logically, on paper, it should be the perfect place for you," says Stevens. "Or you visit a place that you thought you should eliminate, but you go just in case and think, Well, this is fabulous. This is the one."

Understand the rules of entry

Many foreign governments make it surprisingly easy and affordable for Americans to retire in their country, shifting in recent years from requiring large lump-sum investments to establish residency to simply asking for documentation that you have a certain minimum amount of guaranteed passive income from sources such as Social Security and pensions.

In many places, those minimums are quite modest, often easily covered by Social Security benefits alone. Global Citizen Solutions, an advisory firm for people planning to move overseas, found that 61% of the 44 countries it analyzed in Europe, the Americas, Africa and Asia require a minimum monthly income of 2,000 euros or less (around $2,325, at recent exchange rates), including Portugal, Panama and France.

Typically the visas are good for a year, then must be renewed annually. But nearly half offer longer residencies (Portugal’s visa is good for two years, as is Uruguay’s), and a few countries, including Panama, offer permanent residency from the outset.

Other requirements typically include proof that you have health insurance and a place to stay once you enter the country.

Once you start the process, it commonly takes three to four months for a visa to be approved, but you should give yourself six months of leeway, said Adalberto Pucca, head of global mobility solutions at Global Citizen Solutions.

"It’s important to know the rules about obtaining residency, but the ease of the visa process shouldn’t be a high-ranking factor in your decision about where to move," Pucca says. "Go where you’ll be happiest."

Expect to live larger for less

No matter where you end up in the world, your living costs will likely be lower than what you’d pay to lead a similar lifestyle in the U.S., experts say. That’s typically true, they say, even in highly developed countries and with today’s weak dollar against the euro and other currencies.

How much lower, however, will differ dramatically depending on which country you choose and what town, city or region you settle in.

Retiring to Central or Latin America, for instance, will be substantially less expensive than retiring in Europe; within Europe, Greece will be easier on your budget than France, and within France, living in the countryside will be much cheaper than retiring in Paris.

You can compare living costs in various cities and countries at the website Numbeo. International Living also publishes typical budgets for retirees in the 22 countries it ranks. Your costs, though, may be very different from the "typical" budgets seen on best-places lists, depending on your preferred lifestyle.

"Maybe you will rent a house instead of an apartment. Maybe you like to eat out more often or go to higher-end restaurants. Maybe you prefer to take Ubers rather than use public transportation," says Pucca.

"It’s important to personalize your cost-of-living estimates, based on your own research and the prices you pay when you visit."

Line up healthcare in advance

Nearly four out of 10 Americans considering a move abroad cite the availability of better, more affordable healthcare as a top reason, the Harris poll found. The good news, experts say, is that healthcare is indeed less expensive in most other places in the world, though by how much differs sharply from country to country, as well as within countries among different cities, towns and regions — just as in the U.S.

The same is true for the quality of care. You’ll generally have access to first-rate treatment in most countries in Europe, with France, Portugal and Spain topping the list for best healthcare based on a combination of quality, access and affordability in International Living’s rankings. Panama also wins high marks, as does Costa Rica.

Though most countries have some form of government-subsidized health care, it can take time — typically from three months to two years — for newcomers to qualify.

So you’ll need private coverage from a national or international insurer to bridge the gap. International carriers include Cigna Global, Blue Cross Blue Shield Global Solutions and International Medical Group.

Even after qualifying for the public health system, many expat retirees retain private coverage for access to higher-quality medical facilities and shorter wait times.

One strategy to keep costs down is to opt for catastrophic coverage only and pay out of pocket for routine care, since the costs are typically low in many countries, says Hunter Schultz, a healthcare consultant for Expatsi, a company that helps Americans relocate abroad, and author of Expat Health Guide.

He notes, for example, that in Panama, where he lives as a U.S. expat, people pay about $30 for a primary care visit, and he recently paid $110 for an ultrasound of his shoulder — before the 20% senior discount he gets on medical expenses.

Schultz likens it to how Americans use auto insurance. "You wouldn’t put in a claim with your insurer for an oil change or new spark plugs. It’s just the big expenses, and that’s the way people often use health insurance in other countries," he says.

One additional expense you shouldn’t forgo: retaining Medicare coverage.

While your benefits won’t cover care in the country you move to, you’ll need them to help pay for any treatment you receive when you’re back in the U.S. for visits or if you need to seek treatment from a specialist here.

You’ll also need Medicare if you eventually come back to the States to live, as many retired expats end up doing. While you can re-enroll in Medicare after a lapse in coverage, you’ll be hit with a stiff lifetime penalty for doing so: 10% of the standard Part B premium for every 12 months when you could have had Part B but didn’t.

Manage taxes with care

International wealth managers routinely use two words to describe the tax situation that Americans who retire abroad face: It’s complicated.

That’s true no matter where in the world you choose to retire. The reason: The U.S. is one of only two countries in the world (Eritrea, in Africa, is the other) that tax people based on citizenship, not residency. "Uncle Sam is your most loyal travel companion," says Peter Sengelmann, director of Creative Planning International, an international wealth management firm. "He will follow you wherever you go."

In practice, that means you have to file tax returns and report income and follow the tax rules in both the U.S. and your place of residence abroad, although you won’t necessarily owe taxes in both countries.

The U.S. has treaties with more than 60 countries to prevent the same income from being taxed twice — or to at least lessen the sting.

Critically, the rules about what income is taxed and at what rate differ from country to country, with some places more friendly to retirees than others. Most countries in Europe, for instance, tax all of your income no matter where you earned it.

Others, including several in Latin America and Southeast Asia, only tax income earned in that country. Some, such as Costa Rica, Panama and Uruguay, typically exempt foreign pensions and annuities entirely, while others, such as Greece and some places in Italy, tax them at a low flat rate. Some countries treat distributions from Roth accounts (which are funded with post-tax money but provide tax-free withdrawals in the U.S.) as taxable income.

Some have much higher tax rates than in the U.S., and the higher rates start at lower income levels. In Italy, for instance, the top rate is 43% and kicks in at 50,000 euros (around $58,000 at recent exchange rates).

"It makes your head spin," says Sengelmann. That’s why experts urge U.S. retirees living abroad to work with a pro who is well versed in international tax law or, at a minimum, how U.S. rules work in tandem with those of the country you want to live in.

The nonprofit American Citizens Abroad has directories of international tax preparation and financial services providers; you can also tap expat networks on Facebook or other social media platforms for recommendations.

A pro can help you take steps proactively to limit negative tax consequences. For instance, if you’re moving to a country with a high tax rate, you might want to take some distributions from tax-advantaged retirement accounts before you leave so you’ll pay taxes on that income at lower U.S. rates.

Or you might avoid doing a Roth conversion if you’re thinking about moving to a country that taxes withdrawals from those accounts.

"Don’t let the tax tail wag the dog," Sengelmann says. "Go where you think you’ll be happy, and an adviser can help you figure out the rest."

Get your expat finances in order

As with taxes, managing the rest of your financial life when you retire abroad takes a lot more thought and at least a little bit more maneuvering than if you were dealing with the rules of one country only.

For instance, you’ll probably want to maintain bank accounts in the U.S. and in your country of residence to make it easier to pay for things in both places and maintain access to spending money that isn’t subject to currency fluctuations and conversion fees.

That’s especially true if you’ll be traveling back and forth to visit or access healthcare in the U.S. or if there’s a chance you might move back one day. (Hint: there’s always a chance.)

That means you’ll need to maintain a U.S. address, which you must also have to keep Medicare coverage. You can use a family member’s address or set up a virtual mailbox, which provides a physical address to receive mail.

Then the service scans the contents digitally and sends them to you or forwards packages. Providers include iPostal1 (plans start at $9.99 a month) and Virtual Post Mail ($20 a month).

If you’re collecting Social Security, you can continue to receive benefits through direct deposit at your U.S. bank or have benefits sent to your bank overseas. Either way, you’ll need to inform Social Security of your move, as well as fill out a questionnaire the agency will send to you every two years to confirm your address and status. The same U.S. tax rules apply.

The thorniest issue: estate planning. Some countries levy an inheritance tax, for instance, and exemptions are often much lower than the federal estate tax exemption in the U.S. Then, too, many countries, including most in Europe and some in Latin America and the Caribbean, follow so-called forced heirship rules governing the disposition of assets.

"You don’t necessarily get to choose who inherits what; it’s dictated by law and cannot be overwritten by a will," says Ingrim at Liberty Atlantic. "There are strategies you can use to bypass forced heirship laws, but it takes advance planning."

Even jointly held assets may be vulnerable to different rules of succession, and often the assets won’t automatically pass to a surviving spouse but rather will be tied up for a while — years, in some cases — as an estate goes through probate.

For that reason, Ingrim recommends that couples living abroad split some assets to hold in individual accounts so each spouse is assured access to funds as needed.

Find — and keep — your people

A study published last year in the journal Psychology and Aging found that people who retire abroad risk feeling lonelier than older retirees who stay in their native country.

Based on a survey of about 5,000 Dutch people aged 66 to 90 living in 40 countries, the researchers found that the expats reported higher levels of social isolation and, among those who lost touch with family and friends back home, greater emotional loneliness as well.

After 16 years living in Ecuador and seeing many expat retirees come and go, it’s a phenomenon the Statons are familiar with. "It can be hard to feel like you’re an outsider and always will be," says Edd. "Some people get tired of feeling they don’t fit in."

One workaround for the social isolation that many expat retirees experience: Move with or near people you know, so you have a small established community from the outset. And, experts recommend, aim to live like a local, not a tourist, interacting with residents and immersing yourself in the language, customs and culture of your new home.

That’s the approach that Marion Sharp and Noel Blyler took when they moved to Loches, in France’s Loire Valley, last year.

Sharp, 67, who had worked in nonprofit fund-raising, and Blyler, 66, a former high school college counselor, had visited close friends who had a second home in the area several times over the years. Sharp and Blyler loved it and had talked about maybe buying a second home themselves or even retiring there one day.

When the friends invited the couple to share their house and all retire there together, Sharp and Blyler took the leap.

"This is a dream more than 50 years in the making," says Sharp, who has loved France since she first traveled there when she was 16.

Obtaining a visa was easy, Blyler says, requiring only that they show they had a place to live, health insurance and a minimum level of guaranteed income, which was covered by their Social Security benefits.

Harder but fun, they say, has been learning to speak conversational French. They recently purchased a place of their own near their friends, and they are deeply engaged with the history, architecture, art and beauty of their adopted home.

"I think of it as un coin de paradis, a corner of paradise," Blyler says. Sharp, who says that friends from the U.S. are frequent visitors, adds, "There’s a different attitude toward enjoying life here. Experiencing another culture is part of the adventure."

Be ready for hassles and hiccups

Adjusting to that different culture is frequently cited by experts and expats alike as the most challenging part of retiring overseas. Learning a new language and adapting to a different pace and norms can be tough, but it’s often smaller irritants that stick out to people who have made the move.

Hunter Schultz recalls his chagrin when he first moved to Panama and couldn’t find his beloved Pepperidge Farm cookies on grocery shelves.

Karen Fifer Ferry says she often brings back cooking ingredients from her visits to the U.S. because they can’t be found in Bahamian stores, and she admits the laid-back pace can be frustrating — it took twice as long to rebuild their home after Hurricane Dorian as the initial estimate.

Ingrim says American clients are often surprised to find that many European homes don’t have dishwashers and that the furniture they shipped from their 2,500-square-foot house in the U.S. doesn’t fit in the 1,000-square-foot apartment they live in now.

Stevens of International Living recommends tapping into the expat community in your new home via social media and in-person gatherings to help solve common problems. "They can make your landing so much softer," she says. "They’ve already figured out a plumber that’s good, which vet speaks English and how you pay your utility bill."

Perhaps the most helpful thing you can do, says Stevens, is adjust your own attitude.

"When you retire abroad, there are inevitably going to be difficulties. The bureaucracy will be hard to navigate, and there will be confusion, especially if you don’t speak the language," she says. "To enjoy this new life, it really does help to think of it as a grand adventure, that it will be fun to try new foods, have new experiences and learn a new culture."

It has also helped, Ferry says, to remember that the decision to retire abroad is reversible. Circumstances change and so do people.

The Statons agree. "When people ask us if we’ll live in Ecuador forever, we say we have no idea how long forever is," says Cynthia. "What’s important is not to let worry over ‘forever’ stop you from making a move that could be perfect for you right now."

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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As a longtime financial adviser, I've learned that people often look forward to retirement with a mix of eagerness and angst.

While they're usually excited about the freedom they'll have to travel, enjoy new and old hobbies and spend time with family and friends, they also wonder if they'll have enough saved to afford a long and fulfilling retirement.

That's a valid concern. According to the CDC's National Vital Statistics Reports, based on data from 2023, the average American who makes it to age 65 can now expect to live about 20 more years.

Many will live well past that — into their 90s or even 100s. That's a long time to get by on the income you must create for yourself.

It's no wonder a recent Allianz Life study found that 65% of Americans are more worried about running out of money in retirement than they are about dying.

How can you help ensure your money lasts as long as you do? The first step for many soon-to-be-retirees is to stop fretting and start planning.

Whether you're DIYing your retirement or working with an experienced financial adviser, here are four things you should do to prioritize your nest egg's longevity:

Build a retirement paycheck from reliable income sources

One key way to extend the life of your savings is to create a retirement paycheck you can count on every month, so you won't feel forced to sell investments for income during a down market. If you can cover your basic expenses, you'll give yourself more flexibility.

Those reliable income streams will include your Social Security benefits and a pension, if you have one. A part-time job or rental income can also give your retirement paycheck a boost.

If you need a bit more to fill a gap between your earnings and expenses, you could also consider a fixed index annuity strategy that provides consistent cash flow regardless of market conditions.

For retirees who don't have an employer pension, annuities can be used to create a personal pension that works in much the same way.

Protect against major market losses

Historically, the market has eventually recovered from every drawdown, even steep and extended declines. But there's no predicting how long any given recovery might take, and unfortunately, when you're in retirement, time is not on your side.

If you're closing in on your planned retirement date, you may consider transitioning your portfolio to a "margin-of-safety" approach, including defined-outcome strategies that offer some growth but also limit downside risk.

Investing in buffer exchange-traded funds (ETFs) and similar vehicles can reduce the impact of large drawdowns, especially early in retirement, when sequence of returns risk is a concern.

Manage taxes on withdrawals

Thoughtful tax planning is as critical in retirement as it is at any other stage of your financial life; maybe more so. Without it, your retirement savings could be extremely vulnerable — especially if tax rates rise in the future.

Carefully selecting the accounts from which retirement income will be sourced (taxable, tax-deferred and tax-free), and the order in which you'll tap those accounts, can minimize your overall tax bite.

If you've stashed most of your savings in a 401(k) or similar tax-deferred plan, a Roth conversion might make sense. (No, it's not too late.) Note: A ROTH Conversion is a taxable event. Consult your tax advisor regarding your situation.

Proactively managing your tax bracket from year to year could also help you avoid the income-related monthly adjustment amount (IRMAA), a surcharge that could lead to a considerable increase in your Medicare premiums.

Adjust spending during market cycles

The cornerstone of a disciplined retirement plan is a sustainable withdrawal rate. For decades, the "4% rule" — which suggests withdrawing 4% of your nest egg in year one of retirement, then adjusting that baseline dollar amount for inflation each year — has served as a popular benchmark.

But these days, many planners, including yours truly, favor a more flexible withdrawal strategy that adjusts spending based on market performance, especially if you expect to have a long retirement.

This approach can help you extend your portfolio's longevity without significantly affecting your lifestyle.

Keeping a preservation mindset is a must

There are many unpredictable pressures that can impact your nest egg over time, from how long you might live to market performance, inflation, taxes and more. As a result, it's easy to understand how uncertainty can steal some of the joy from what should be an amazing time of life.

But with proactive planning that focuses on preservation, you can push back a little (or a lot) on those worries.

Don't hesitate to ask for guidance from a retirement specialist if you aren't sure where to start. A knowledgeable financial adviser can walk you through the many ways you can reduce your longevity risk and confidently face your financial future.

Kim Franke-Folstad 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.

I'm lucky to be close with my mom and dad and lucky they're both healthy and active in their 70s.

They've always taken great care of me (their only child), and I want to do the same for them as they get older. But I can only do that if I know, in advance, how they run their household and pay their bills, as well as what their concerns and wishes are.

If you're a "oneling" like me, you stand to inherit your parents’ homes and any wealth they've amassed. And your parents will want to ensure those things make it into your hands in the way they intended. That takes forethought, tact and a deft touch.

Say 'I love you' with a prenup

Some of my clients won't even consider a prenuptial agreement. I don't force the issue, but I do advise them to at least do this: Save your retirement account statement from the month of your marriage. That's in case you ever need to determine what your financial situation looked like pre-marriage vs post-marriage.I consider it an act of love to go into marriage being honest about everything, including finances. The idea that talking about money is impolite has disadvantaged women for a long time.

To see what can happen when couples don't have these discussions — or when one spouse (most often, the wife) blindly trusts the other with all the family finances — read Belle Burden's New York Times-bestselling book, Strangers: A Memoir of a Marriage. I'm telling every married woman I know about it and encouraging them to read it.

My husband and I have a prenup, and neither one of us has plans to divorce.

But what if you find yourself heading for divorce without one?

If you married without a prenup, get a postnup

Yes, it's really a thing.

Sometimes couples draft postnups when they are giving their marriage a second chance after infidelity or a trial separation. Other times, new business partners draft them to protect the venture they are building together.

Whatevever your reason, start by finding documentation of what your financial situation looked like before you got married. A family law attorney can draft a simple postnup, a legally binding contract that outlines the division of assets and debts in the event of a divorce.

It should also make it clear that each spouse waives the right to contest any inheritance their spouse should receive.

Inherited wealth: Keep it separate

If you have wealth to pass down to a child or children — or you stand to inherit your parents' wealth —congratulations. Only about 22% of Baby Boomers plan to leave an inheritance to their children, according to Northwestern Mutual’s Planning & Progress Study.

For the same reason I'm pro-prenup — because life is uncertain — I'm an advocate for keeping any assets you inherit in your own name. When an inheritance goes into a joint account, it's hard to undo.

Most parents who leave wealth to their child or children do so out of love and concern for their offspring. No matter how much they love their son- or daughter-in-law, their intent is to ensure their child is taken care of. They don't want that money to be commingled.

Have the 'money talk' with your mom and dad

I don't mean you should ask, "Hey, are you gonna leave me any money when you die?" Instead, you might ask, "Have you thought about what would happen if you fell and broke your hip?"

Using personal anecdotes or news stories can ease you into the conversation. If you ask, "Did you read about Prince/Aretha Franklin/Sonny Bono not having a will?," it's an easy segue to, "Do you have a will?"

Prepare for the unexpected

While you're on the subject, consider asking your parents, "Can you walk me through how you manage your household so that if something happened, I could do it the way you do it?"That's so much gentler than: "I think you're slowing down and becoming forgetful. I may need to take over paying your bills."

It should go without saying that you need a will, but I'm often surprised by the people who don't have any estate planning documents — a will, a power of attorney or healthcare power of attorney.

That's one of the first questions I ask a new client, and if they don't have any of those, that's our first order of business.

There's even a service that can serve as a third-party power of attorney for folks without close next of kin or who are estranged from their family.

To move or age in place?

It's an important conversation to have with your folks by the time they're in their mid-70s.

If they don't discuss it with you, you might start by saying: "Have you thought about the benefits of a continuing care retirement community (CCRC)? And, oh, by the way, we should tour some because they all have waiting lists. Once you put your name on a list, it could be years before there's an opening."

CCRCs offer the full continuum of care from independent living to skilled care. But they require a significant lump sum to enter, and you have to be healthy enough to walk in. You can't wait until you need skilled care to go.

Not everyone wants that. My own parents plan to age in place. So, if one of them falls and breaks their hip, they'll go to rehab and come right back home. And when they do, they'll need caregivers to come to them while they're recuperating. Who will find, manage and pay them?

For that matter, who's going to make sure their house is clean and stocked with the right foods? In my own family, that'll be me. And it's a privilege to do it.

Plan ahead

When you consider what could sink a financial plan, long-term care is at the top of the list.

Every financial plan should include estimated long-term care costs along with estimates of any additional dollars you might need to spend on health care — for at-home caregivers, for instance.

Only children are likely candidates to be executors of their parents' estate. As soon as you know you have that responsibility, you should begin to get organized. If you're not, you can expect to spend about 540 hours, or nearly 23 days, on that task.

Don't let that happen.

There's a wonderful tool called Nokbox, or "Next of Kin" box. It was born of necessity; a woman invented it after settling her brother's estate.

It's a file folder organizer with a place to put everything — literally everything — someone would need in the event you’re incapacitated: Your vehicle titles, account numbers for utilities, social media passwords… It's incredible.

You can, of course, outsource executor duties. But there's a lot you can do on the front end to make it manageable.

Remember: You don't have to do any of this alone.

Assemble your team

Just as you might assemble a team when going through a divorce, it's great to bring experts together to help you and your parents navigate their golden years.

Start with an aging life care professional.

They can tell older people what resources they need if they choose to age in place, estimate costs for moving to a retirement community and even come to your parents' home to assess how safe it is.

Build a deep bench

My parents have each other as their power of attorney. I'm the backup, should both of them become ill or injured at the same time.

As an only child, my worst fear is something happening to me, because that would leave my parents vulnerable. So, my childhood best friend is my backup as their healthcare power of attorney. She's known them since she was 3. Having her on our team has given all of us great confidence.

And that's really what all this advance planning is about — confidence for you, your parents, your spouse and kids. It all starts with initiating a conversation.

If your parents haven't had "the talk" with you yet, bring it up to them. I'll bet they'll thank you. And your future self will thank you, too.

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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.