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

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

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

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

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

Know what is driving the urge

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

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

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

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

Avoid two common mistakes

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

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

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

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

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

Run every change through five lenses

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

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

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

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

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

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

The case for working with a financial adviser

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Elementary and middle school: Save, spend, give

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

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

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

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

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

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

High school: Real costs, real stakes

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

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

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

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

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

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

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

The 20s: Building independence without a safety net

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

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

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

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

30s and beyond: From teaching to partnership

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

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

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

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

Four signs your children are ready for more

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

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

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

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

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

Related Content

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• Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who Knows
• Great Wealth Transfer: How Families Can Get on the Same Page
• Will Millennials' Attitude Toward Money Put the Family Wealth at Stake? A Wealth Adviser Explains How Families Can Find Common Ground

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

Required minimum distribution season sneaks up on many retirees.

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

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

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

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

• Taxes
• Medicare premiums
• Charitable giving
• Investment allocation

It can also affect the legacy you leave to heirs.

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

Get organized, then get clear on what you need

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

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

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

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

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

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

Let charitable intent drive a QCD and watch your AGI

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

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

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

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

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

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

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

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

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

Time your RMD deliberately

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

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

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

The real annual question becomes a combination of:

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

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

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

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

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

Think beyond this year

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

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

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

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

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

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

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

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

Related Content

• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
• Got $2.5 Million Saved for Retirement? Here Are the Huge RMDs You Must Take at 73, 75, 80 and 85
• 5 Costly RMD Mistakes That Will Put a Dent in Your Savings (and How Early Planning Can Help)
• Good Job on Cutting Costly Investment Fees, But These 8 Tax Traps Can Hurt Far More
• Five Keys to Retirement Happiness That Have Nothing to Do With Money

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

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

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

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

Why AI gets retirement numbers wrong

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

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

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

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

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

Step No. 1: Check the year on every number

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

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

Consider any figure with no year attached suspect.

Step No. 2: Ask which agency sets the rule

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

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

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

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

Pension rules sit with the Department of Labor.

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

Step No. 3: Verify at the source

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

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

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

Step No. 4: Feed it your own circumstances

A chatbot answers in generalities unless you provide specifics.

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

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

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

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

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

Step No. 5: Ask the same question twice

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

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

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

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

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

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

Step No. 6: Ask what it left out

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

Two prompts do most of the work here:

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

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

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

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

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

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

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

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

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

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

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

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

Related Content

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• 6 Ways to Use AI to Improve Your Financial Life
• How to Protect Your Privacy While Using AI
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• An Expert Guide to Your Financial Priorities Decade-by-Decade: What to Focus on in Your 30s, 40s, 50s and 60s

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.

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

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

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

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

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

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

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

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

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

A bounce back in cash rates

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

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

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

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

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

Good for guaranteed income

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

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

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

Time to de-leverage

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

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

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

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

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

Continued struggles in the broader housing market

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

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

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

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

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

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

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

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

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

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

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

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

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

Related Content

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• How to Help Your Children Buy a Home
• Think You Can Afford That House? Run These Numbers First
• A Financial Expert's Tips for Lending Money to Family and Friends
• Four Things to Consider Before Giving Your Kid a Down Payment

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

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

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

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

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

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

Why I see this differently

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

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

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

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

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

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

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

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

Ask the questions that actually matter

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

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

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

Use a framework to help guide your planning

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

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

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

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

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

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

Focus on the whole picture, not one component

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

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

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

Write yourself into the plan

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

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

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

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

What planning is really for

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

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

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

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

Related Content

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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)
• 6 Tips for Women Taking the Financial Lead in Retirement
• 3 Financial Hurdles Coming Up for Women: How to Overcome Them, From a Financial Planner
• Tips to Help Single Women Struggling to Save for Retirement

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

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

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

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

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

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

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

A longer timeline changes the withdrawal math

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

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

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

Build the floor before reaching for more return

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

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

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

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

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

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

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

Keep the conversation about income, not products

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

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

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

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

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

Make age 95 part of the next review

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

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

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

Related Content

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• How to Master the Retirement Income Trinity: Cash Flow, Longevity Risk and Tax Efficiency
• How to Manage Longevity Risk in Retirement: 10 Solutions
• The Longevity Blueprint: 4 Everyday Signs You’re Tracked for a Longer Life
• Income and Life Expectancy Not Adding Up? An Annuity Could Solve the Equation

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

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

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

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

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

The setup

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

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

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

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

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

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

The penalty that never goes away

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

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

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

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

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

The timing windows that matter

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

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

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

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

What to do

A few concrete steps make this entirely manageable.

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

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

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

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

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

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

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

The bigger lesson

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

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

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

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

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• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s

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

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

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

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

Estate planning feels uncomfortable for two reasons:

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

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

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

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

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

1. Your will: The foundation and the safety net

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

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

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

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

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

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

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

2. Revocable living trusts: Skipping probate

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

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

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

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

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

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

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

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

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

3. Power of attorney: Your trusted 'agent'

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

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

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

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

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

4. Healthcare directives: A message for your loved ones

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

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

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

5. Healthcare proxies: Naming your decision-maker

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

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

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

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

6. HIPAA authorization: The one people skip

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The traditional IRA drag: Ordinary income vs capital gains

Traditional IRAs deliver upfront deductions and tax-deferred growth, but every distribution is taxed as ordinary income — up to 37% federally, plus state taxes.

For rapidly appreciating equity, this dynamic creates a significant tax drag. Gains that would otherwise qualify for long-term capital gains rates (capped at 20% plus the 3.8% net investment income tax) lose their tax character entirely inside a traditional IRA. Decades of growth convert into ordinary income upon withdrawal.

The ordinary income vs capital gains tradeoff deepens for heirs. Under the SECURE Act, most nonspouse beneficiaries must fully distribute an inherited IRA within 10 years. A $20 million traditional IRA forced out over a decade can push beneficiaries into top tax brackets every year, surrendering nearly half the account to tax obligations.

The Roth trap: Income tax free, estate tax exposed

Roth accounts offer tax-free distributions and no lifetime required minimum distributions (RMDs), making them a natural candidate for high-upside equities. Yet, an often-overlooked exposure remains: The full Roth balance remains inside the owner's gross taxable estate at death.

Consider an entrepreneur seeding a Roth account with early-stage equity that grows to $50 million. While heirs receive an income tax-free windfall, they might face a substantial estate tax bill on the balance above the federal exemption limit ($15 million per person).

Another strategy is to withdraw from mega-Roth accounts after age 59½ and gift those funds — either directly or via trust structures. This approach can rapidly exhaust lifetime gift tax exemptions, restricting broader estate options.

Estate planning alternatives: Irrevocable trusts

To insulate high-growth assets from systemic tax drag and estate expansion, families expecting their wealth to trend above the federal estate tax exemption amount often look beyond retirement accounts toward irrevocable trust structures.

One has the choice of paying the trust's taxes over time by using a grantor trust. Because the grantor pays the annual income tax on behalf of the trust, the assets inside compound tax-free without diminishing the trust, principally providing a tax-free gift to beneficiaries each year.

To avoid paying the taxes of the irrevocable trust, the grantor might use a non-grantor trust in which the trust pays its own taxes. The grantor might "turn off" the grantor's trust status to convert the trust into a non-grantor trust.

Grantor trusts can be structured to allow indirect access to trust funds in more than one way. An independent trustee can be granted discretion to make distributions to beneficiaries based on health, education, maintenance or support needs, offering flexibility without giving the grantor direct control.

For married grantors, a spousal lifetime access trust (SLAT) provides a more direct route: It permits actual distributions to a spouse, who might then informally share that benefit with the grantor.

A non-grantor variation, the SLANT, can achieve similar goals, often for state income tax purposes. Because retaining a swap power would convert the trust back to grantor status, SLANT distributions rely more heavily on independent trustee discretion, which calls for more careful drafting.

While legislative discussions periodically evaluate changes to grantor trust rules, these vehicles remain primary pillars for intergenerational wealth transfer when executed with careful legal oversight.

Strategic asset placement across vehicles

Optimizing a complex wealth structure requires matching specific asset classes to the appropriate legal and tax wrappers. Note that these are general frameworks; the right approach for any given family will depend on their specific asset profile, complexity and risk tolerance.

• Traditional IRAs. Often best allocated to steady, yield-generating assets such as private credit or real estate investment trusts (REITs), where ordinary income tax rates match the income profile of the asset.
• Roth IRAs. Highly effective for strong growth equities, provided total household wealth remains within long-term estate tax exemption thresholds.
• Irrevocable grantor trusts. Ideal for high-upside, early-stage positions once family wealth exceeds federal estate tax thresholds, shielding future growth from federal estate tax.
• Taxable portfolios. Well-suited for core appreciated assets intended for transfer at death, leveraging the step-up in basis to eliminate unrealized capital gains. For concentrated, highly appreciated positions held prior to death, structured hedging and derivative strategies can help manage concentration risk, while other diversification tools such as direct indexing can allow for a more gradual transition out of the position.

Preserving generational wealth requires thoughtful vehicle selection, proactive risk management and staying ahead of changing tax frameworks. As balances grow, revisiting where assets sit, and why, can be one of the more overlooked ways to preserve wealth across generations.

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

Many investors see real estate as the ultimate asset class. Appreciation potential. Steady income. Tax breaks. Inflation hedging. What more could you ask for?

The reputation is well-earned. Real estate investments can offer all of those benefits while diversifying your portfolio and giving you a stake in something tangible.

But the same promises that have made real estate so attractive for so long will trip you up if you take them for granted. Appreciation, yield, depreciation and protection from inflation aren't guarantees. They're assumptions. And unless you gain a basic understanding of which factors influence each one, you're making an investment you don't understand.

Here's what you should know about the four traditional benefits of real estate and where they stand in 2026.

Appreciation

Appreciation tends to get all the attention. Whether you're riding a trending market or flipping properties to sell at a profit, it's the biggest upside real estate has to offer. But it's also the least certain to actually materialize.

For years, cheap debt and rising valuations made appreciation a pretty safe bet. Then interest rates rose overnight and the math changed. The market we find ourselves in today is fundamentally different from the market of five years ago.

This is the nature of appreciation. It rides the macroeconomic winds, and those are hard to predict. For substantial appreciation to return broadly in the current market, we need existing supply to be absorbed and interest rates to drop. That might happen over the next five years. It might not.

In a market like this, appreciation should be your upside, not the plan that your investment relies on.

Yield

A good real estate investment puts money in your pocket today. That's the foundation. Without dependable cash flow underneath a deal, there is no floor when valuations fall or the capital markets tighten. It's what services debt, keeps operations flowing and stops you from counting on appreciation to bail you out.

And in the saturated low-cap-rate markets most investors are looking at today, it's becoming hard to find. A property that generates only 4%-5% of its purchase price in yearly income leaves little margin once debt service is accounted for.

Finding real yield often means going where large institutional capital is not: Secondary markets — the smaller cities and overlooked metros that have real demand without the inflated prices, so that the income can cover the debt and still put money in your pocket.

The investment shouldn't need rent growth or a future refinance at a lower rate to work. If operational improvements can bump up the revenue, that's a bonus. But cash flow should be rock solid from day one.

Depreciation

Depreciation lets you take a paper loss against real income even if no cash leaves your pocket. All kinds of assets depreciate, but real estate is one of very few that can generate revenue and even appreciate in the real world while generating a tax loss on paper.

The IRS lets you deduct the gradual wear and tear of a property over time: 27.5 years for residential real estate or 39 for commercial. But by doing a cost segregation study, you can generally bonus-depreciate 30%-40% of a property's value in year one.

That wasn't always the case. The One Big Beautiful Bill Act (OBBBA) made 100% bonus depreciation permanent just last year, and it could change again in the future. The IRS has the final say.

Make sure your tax strategies line up with the tax code, not your assumptions.

Inflation hedging

The idea behind inflation hedging is simple. Inflation pushes prices higher, rents follow, and your real estate income grows as purchasing power falls. But the economics are never really that straightforward.

Rent is determined by supply and demand, not the Consumer Price Index (CPI). A landlord cannot raise rents 5% because inflation is 5% if competing properties are vacant and tenants have viable alternatives.

This is currently the case for many of the markets that saw heavy apartment construction over the past decade. When vacancy climbed sharply, inflation became irrelevant. Excess housing supply forced landlords to compete on price. Rents fell.

Stronger inflation hedging is found in markets where demand is durable and supply is genuinely constrained. Stable population, limited new construction. Those are the fundamentals that give a property actual pricing power.

The real question

Real estate isn't a magic wand. It's an asset class like any other, and it must be evaluated one investment at a time within the broader market and its ever-shifting trends.

Leaving it out of your portfolio means giving up on some of the most versatile investments you can make. But treating its potential benefits as intrinsic guarantees is a dangerous oversimplification.

Look at the tax code, the macroeconomic trends and the market conditions that underpin every real estate venture. If the fundamentals are there, the benefits take care of themselves.

Related Content

• What Home Equity Is and Why It's a Valuable Long-Term Investment
• How to Grow Your Wealth Like the Real Estate Moguls Do
• Should You Rent or Sell Your Home When You Relocate? How to Decide
• I'm a Real Estate Pro: This Is Why (and How) I'm Deferring My Taxes Until I Die
• The 60/40 Portfolio Had Its Run: Here's Where I Keep My Money Now (and It's Not Bonds)

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

With Americans racking up credit card debt at an alarming rate, there is a misconception that all debt is bad. That's not necessarily true.

Debt is a crucial financial tool, one commonly used by the wealthy to increase capital.

Think of the different types of debt most Americans have: Mortgages to buy homes, auto loans to buy cars and student loans to become more educated and increase their future earnings. These are investments that are essential and would be difficult to access without loans.

Debt is not always bad. It's something everyone can, and should, leverage in some way, as long as you do it responsibly. It's important to understand its place in your financial plan and the situations you can use it to improve your finances.

Understand good debt vs bad debt

To understand how you can leverage debt, you first need to understand the difference between good debt and bad debt. Generally speaking, good debt makes you money or adds value, while bad debt costs money.

Whether debt is good or bad depends on the specific situation. Good debt typically includes mortgages, student loans, investment debt for good value or business debt. Bad debt can include unsecured loans, high-interest credit card debt or payday loans.

A mortgage is typically categorized as good debt because real estate historically appreciates over time, but with current 30-year mortgage rates sitting near 7%, that might not be the best investment long-term.

Student loans, on the other hand, might be categorized as bad debt to some. However, the average worker with a bachelor's degree makes 86% more than one with only a high school degree. Being able to make these distinctions will allow you to not only manage your debt, but leverage your debt to increase capital long-term.

Prioritize controlling your bad debt

You need equity before you can utilize debt, and unfortunately, Americans collectively have more than $1.2 trillion in credit card debt, costing them money and limiting their financial ability. Credit card debt often comes with interest rates above 20%, which makes this very bad debt.

Not only is this costing you, but missing payments can lower your credit score, which could mean facing higher interest rates or being denied for loans, including mortgages and auto loans.

You should prioritize your budget accordingly to pay down your credit card debt.

However, if you have equity, such as a home that you've paid off or mostly paid off, you can leverage this equity to access good debt and improve your situation.

For example, a home equity line of credit (HELOC) loan, which has an average interest rate of 7.30% to 7.50%, can be taken out against your home to pay off your credit card debt. This allows you to exchange a bad debt for a lesser bad debt, cut your interest by more than half and make it easier to pay off.

Leveraging good debt

Once you have equity, you can begin to utilize your good debt. There are a variety of ways to do this depending on the circumstances.

Buying a car could be a good example. Let's say you walk into the dealership and have the money to buy a car outright, but when you begin the process of purchasing the car, a loan is offered to you at a low introductory rate. This is typically only an option if you have a high credit score.

If you take the loan, you'll have to make monthly payments, but you can deposit the money that you would've spent to buy the car in a high-yield savings account or a certificate of deposit (CD), which offer returns of around 3% to 4%.

If that's higher than the interest rate on the loan, the money grows faster long-term, and you can access it as needed for monthly payments.

Another way to leverage debt is if you own a business and want to expand. A business loan allows you to borrow to make improvements and add to your revenue.

These are just two examples, but you get the idea. Debt can be a tool to access an asset in the short term and ultimately improve your finances in the long run.

In conclusion

Debt isn't something you should be afraid of as long as you can afford it and are responsible. You need to make payments on time and be smart about what your budget allows.

This depends on your individual financial situation, which is different for everyone, but this strategy is not reserved for the wealthy. Many Americans can leverage their debt, but they either have too much bad debt or don't know where to begin.

If that's you, I recommend speaking with a financial professional who can help you understand your debt and determine how you can leverage it strategically.

Related Content

• How to Use Good Debt (While Identifying and Avoiding Bad Debt)
• 4 Ways to Make Debt Your Friend Instead of Your Frenemy
• I'm a Financial Professional: Here Are Four Ways You Can Use Debt to Build Wealth
• I'm an Investment Adviser: Why Playing Defense Can Win the Investing Game
• Worried Your Heirs Will Blow Their Inheritance? Make a Plan

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

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

Meet Alice – a hypothetical ESOP participant, but one whose situation reflects mistakes we see. She hired a financial advisor at age 55 to help with her ESOP. At 60, she had $1.8 million in her employee stock ownership plan (ESOP). Her financial adviser assured her he could handle the diversification planning.

But he missed the cumulative diversification limits between 55 and 59. When she finally took diversification at 60, she received a tax surprise. Her adviser elected a direct payout rather than an IRA rollover. And, he didn't coordinate her distribution with other income sources, pushing her into a higher tax bracket.

By the time she consulted an ESOP-specialized adviser to fix the mess, the mistakes had cost her roughly $310,000 in unnecessary taxes, lost growth opportunity and suboptimal distribution choices that couldn't be reversed.

This is a hypothetical example, but the risks it illustrates are real. Advisers without specific ESOP experience often don't know what they don't know – and that gap can turn straightforward diversification into costly, sometimes irreversible missteps.

What ESOP expertise actually looks like

Experience with ESOP planning involves more than being familiar with how these plans work in practice. An adviser working regularly with ESOP participants should understand how plan-specific rules can affect diversification, distributions, concentration risk, taxes, and retirement income. These rules affect when you get paid for your stock and how much you might pay in taxes.

For an overview, see How Does an Employee Stock Ownership Plan (ESOP) Work?

When interviewing a prospective adviser, consider asking:

• How often do you work with ESOP participants?
• What types of diversification and distribution decisions do you regularly help clients evaluate?
• How do you approach a large concentration in employer stock?
• What's your approach to coordinating ESOP distributions with Social Security timing and tax bracket management?
• How do you work with the participant's plan administrator when needed?

An adviser who truly knows ESOPs should be able to explain their process clearly, including how ESOP decisions fit within a broader retirement plan — things like cumulative diversification limits and how they've helped clients decide between lump sum versus installment distributions. These are exactly the kinds of questions Alice's adviser couldn't have answered well.

Ask for client references from people who've been through ESOP diversification with this adviser and can speak to how the process actually went. If an adviser hesitates or can't provide them, that's worth asking more about.

If you want to understand the diversification process before meeting with an adviser, our ESOP Diversification Masterclass provides additional background on the decisions participants may face.

You can also review the ESOP Diversification and Retirement Guide for information about selling company stock and planning for your retirement paycheck.

Look at relevant credentials — but also look at experience

Professional designations can provide information about an adviser's education and training, but credentials alone do not establish ESOP experience.

Two designations you may encounter include:

• CFA® (Chartered Financial Analyst) — a professional designation focused on areas such as investment analysis, wealth management, and risk management, including strategies that seek to reduce concentration risk.
• CFP® (Certified Financial Planner) — a professional designation focused on comprehensive financial-planning topics such as cash flow, retirement, insurance, taxes, and estate planning.

Professional involvement with organizations such as The ESOP Association or the National Center for Employee Ownership (NCEO) may also indicate ongoing engagement with employee-ownership issues, but membership itself does not establish a particular level of skill or experience.

Published work and speaking engagements can provide additional information. Has the adviser written about ESOP planning, diversification, retirement income, or concentration risk? Have they presented educational material to employee-owners or ESOP organizations?

The vetting process that protects your interests

Choosing an ESOP-specialized adviser isn't a decision you should make based on convenience or cost alone. Choosing based on cost alone can be a false economy – if critical planning opportunities are missed, the cheapest option isn't always the least expensive one.

Start by requesting a written proposal that clearly outlines fees, services and how the adviser will support your specific ESOP planning needs. Ask for the firm's ADV Part 2 brochure.

The proposal should address how the adviser will handle your diversification elections, coordinate with your plan administrator, manage tax implications across multiple income sources, and integrate your ESOP with broader retirement and estate planning goals. If the proposal is generic or doesn't specifically address ESOP complexities, that's a warning sign.

Ask about the adviser's process for collaborating with CPAs and estate planning attorneys. ESOP planning doesn't exist in a vacuum. It intersects with tax preparation, estate documents and sometimes Medicare planning. An experienced adviser should have established relationships with other professionals and a clear process for coordinating across disciplines.

Questions you must ask before you commit

Beyond evaluating an adviser's experience and credentials, a few additional questions round out your vetting process:

• Are you a fiduciary for investment management and how is your compensation structured?
• What's your process for staying current on ESOP regulations and tax law changes?
• What's your approach to managing concentration risk while maintaining growth potential?

The depth and specificity of the answers matter. You want substance, not sales pitch.

What real ESOP expertise costs — and what it's worth

Comprehensive ESOP planning typically involves an initial retainer ranging from $2,500 to $12,000 for a detailed financial plan. Ongoing investment management fees generally range from 0.25% to 2% annually, depending on account size and complexity.

Yes, that's real money.

But consider what proper planning can help you avoid:

• Unnecessary tax costs from mistimed decisions
• Missed diversification windows
• Distribution strategies triggering avoidable Medicare surcharges
• Estate planning gaps that complicate wealth transfer

The right adviser does more than manage your investments – they help you navigate timing decisions and coordinate across multiple financial dimensions, which can meaningfully affect your retirement.

Your ESOP represents years of hard work. Make sure the person helping you unlock that value has the specific experience your situation requires.

At Peak Wealth Planning, we've built our practice around helping ESOP participants convert concentrated holdings into diversified, tax-efficient retirement income. Schedule an ESOP Strategy Session with Peter to talk about what's ahead and whether Peak Wealth Planning may be a good fit.

Related Content

• Why Company Stock May Be Riskier Than Employees Realize
• I'm a Financial Pro: Why You Shouldn't Put All Your Eggs in the Company Stock Basket
• How Soon Can You Walk Away After Selling Your Business?
• Taxes in Retirement: What ESOP Participants Need to Know
• Concentrated Company Stock in Your ESOP? Waiting to Diversify Could Tank Your Retirement

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

Artificial intelligence (AI) has become the dominant driver of U.S. economic growth, but its massive capital expenditure requirements are reshaping debt markets.

While AI spending has kept the economy out of recession, the pivot toward debt financing is increasing the supply of long-duration bonds, putting upward pressure on U.S. Treasury yields.

This unintended consequence threatens to put pressure on government finances, echoing past episodes of "bond vigilantes" but with far greater debt burdens today.

Understanding the neutral rate

The "neutral rate" is the enigmatic overnight interest rate for an economy with stable inflation and full employment. The Federal Reserve sets the rate by committee. It is not a specific number.

In fact, it is so fanciful a concept that Wall Street analysts refer to this type of economic condition as Goldilocks — not too hot and not too cold.

Yields on the longer-dated U.S. bonds are a different story. They aren't set by committee. They are set by the bond market, which is now being impacted by the AI boom. That could ultimately mean higher rates, and that is not good news for the U.S. Treasury Department.

Bond vigilantes: Past vs present

Of course, the Treasury Department is no stranger to market forces driving up yields on its long-dated debt. When inflation spiked in the early 1980s, the so-called bond vigilantes rode into town and started selling government securities, driving up rates.

While the moniker is worthy of an Ennio Morricone soundtrack, it was coined by economist Ed Yardeni.

Who are they? The bond vigilantes are comprised of the large institutional investors who buy long-dated U.S. Treasury Bonds. These investors have long-term time horizons and, as a result, are more concerned with the levels of national debt and budget deficits in Washington than the average stock investor.

In 1981, selling by these bond vigilantes forced the U.S. long bond up to 15%. That would be catastrophic to the U.S. economy if something similar happened today.

This is where AI comes in, and not in a good way. AI is the driving force in the U.S. economy today. AI is the 800-gigawatt gorilla. The elephant in every room.

Yet, it is always a double-edged sword.

• Will AI cure cancer, or is it an existential threat to humanity?
• Will it solve the climate crisis, or use so much energy and water in the process that it tips the planet to the point of no return?

The AI-led tech sector's cozy relationship with Washington is starting to cut both ways, too. With overt support from the U.S. administration, AI spending has kept the U.S. economy afloat and driven the stock market higher and higher.

But it could soon do the same for yields on long-term Treasuries, which would have the opposite effect — it would hurt the stock market, slow the economy and cripple the U.S. government's ability to balance its budget.

AI spending and U.S. GDP

First, the good news: The $2 trillion of capex (capital expenditures) spent on the AI build-out since 2023. By most estimates, the AI build-out will soon account for 3% to 5% of U.S. GDP.

Up to this point, the spending has come exclusively from the free cash flow of the tech behemoths behind the AI build-out. It has not forced the cost of capital higher in the general economy.

Now, the bad news: These AI "hyperscalers" are now turning to the debt market to fund the estimated $5 trillion to be spent by 2030. That increases the supply of long-duration bonds on the market and puts additional upward pressure on long-term rates at the worst time possible.

While the U.S. economy was in a precarious position when the bond vigilantes appeared in 1981, the U.S. balance sheet was in much better shape.

In fact, the federal-debt-to-GDP ratio in 1981 was 32% compared with 126% at the close of 2025. To put that into dollars owed, the U.S. national debt crossed $1 trillion for the first time in 1981. This year, it crossed $40 trillion.

The U.S. needs lower rates to keep the carrying costs of the national debt from choking off all other spending. Today, the U.S. already spends more on net interest expense than it does on defense.

Treasury yields under pressure

This is what triggered Treasury Secretary Scott Bessent's recent $6 billion Treasury bond buyback to force down the yields of the long bond.

It didn't work. To be clear, the U.S. balance sheet and deficit spending already place huge upward pressure on the yields of U.S. Treasuries. The 30-year bond was at 4.61% the day before the war on Iran began. It has moved to over 5.3% in the six months since.

The U.S. 10-year bond has crossed the meaningful 5% level. But now, investors in long-dated bonds have more supply.

And it is happening fast. By the end of the 1980s, corporate bond maturities averaged eight to 10 years. That drifted up to an average maturity of over 12 years during the long, zero-interest stretch following the great financial crisis.

In 2026, despite higher interest rates, the average maturity of corporate debt is over 15 years, including a rare "century bond" issued by Alphabet.

In all, the five largest hyperscalers have already issued $500 billion in long-term debt over the past year to help finance the AI build-out. By most estimates, another trillion dollars will be financed over the next three years.

The average debt rating of the five largest hyperscalers is A to AA+. With current spreads between 60 and 100 basis points higher than equivalent U.S. government bonds, this makes the longer-issued AI-linked debt attractive to the same pension fund and insurance buyers of long-term government debt.

This puts upward pressure on the yields of U.S. government long-dated bonds.

Shifts in the investment-grade debt market

Meanwhile, this race to fund the AI build-out is changing the composition of the investment-grade debt market as well. In the first half of 2026, the largest hyperscalers issued $165 billion in investment-grade debt. They now account for 10% of the Bloomberg U.S. Corporate Index.

Although not as extreme as the concentration of this cohort in the S&P 500, growing concentration in fixed income indexes raises the risk for the overall economy. While AI-linked bonds still represent only a small part of the overall investment-grade and high-yield markets, so did telecom bonds in 1995.

By 1999, on the eve of the dot-com bust, telecom represented over 20% of the index.

It is happening in the high-yield debt market, too. While AI-linked credit comprises less than 2% of high-yield indexes today, it accounts for 41% of new issuances in the first half of 2026.

The AI infrastructure build-out is also dominating the private credit world. By some estimates, private credit will be financing over $1 trillion of the AI infrastructure build-out in the next three years.

In total, this represents a massive amount of counterparty risk throughout the financial system.

Systematic risk from AI debt

AI-related capital spending has kept the U.S. economy from getting cold enough to slide into recession, but not hot enough to force a rate hike for over three years.

AI spending also drove stock market returns higher.

But now AI could create a headwind by forcing bond yields higher. This would create a real headache for a cash-strapped U.S. government.

And the Fed, which is also contending with political pressure and inflation from tariffs and war, will have to thread a needle more than usual to find that Goldilocks neutral rate in a rapidly changing environment.

Related Content

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• Treasury Yields Are Rising. Here's What That Could Mean for Your Mortgage, Car Loan and Credit Cards
• When Will Bonds Be Loved? What the Longest Bond Bear Market in History Can Teach Investors
• Best Bond Funds to Buy
• What Investors Should Weigh as We Head Into the Fourth Quarter: An Investment Adviser’s Review of Q3

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.

Last year, in my article Should Your Brokerage Firm Become Your Bookie? I advised anyone seeking to make wagers on random events to do so carefully.

Stick to a predetermined, and limited, amount of money, I warned. And use a financial institution separate from the ones holding your savings and securities accounts.

This helps you to avoid the possibility of dipping into your financial assets to wager on, say, an election in Brazil. You can make those kinds of bets, known as "event contracts," on "prediction markets."

We've now had a year to watch prediction markets become ubiquitous in the media. And I've changed my recommendation, though my earlier advice stands if you still want to venture into prediction markets.

But to you, the average person, reading this on your phone, laptop or at your desk: You. Should. Not. Bet. On. Prediction. Markets.

As they say in the opening line of the movie Rounders, "Listen… If you can't spot the sucker in your first half hour at the table, then you are the sucker."

Why? Because in prediction markets, the odds are stacked against you, your opponents are professionals with tools you don't have, and inside information is virtually a feature.

People who do this for a living believe you are the sucker. The numbers say they're right.

Who are you betting against?

In May, the Wall Street Journal published Prediction Bets Are (Mostly) a Losing Game (paywall). The article studied trades at Polymarket and Kalshi, two of the largest prediction markets.

At Polymarket, the numbers are sobering. The most sobering of all: Out of 1.6 million accounts studied, fewer than 2,000 accounts made 67% of the profits. In other words, 0.1% of the accounts won more than two-thirds of the money wagered. A significant majority of participants were net losers.

Kalshi informed the Journal that there are 2.9 unprofitable users for each profitable one based on a recent month's data.

What makes the profitable traders hard to beat?

What do the winners have that you probably don't have? Access to artificial intelligence that can analyze a betting proposition, determine the factors that could alter the odds, place a wager without human interference, close out that wager when the odds change and do so 24/7.

AI also adds speed that you can't match in terms of access to that information. Simply getting information early and reacting to it can be critical to changing the odds of any event outcome.

The sooner you find out that a star college quarterback has a concussion, the sooner you can place a bet against his team.

An AI tool can tell you a particular tennis player has difficulty with left-handed opponents, then factor in that information and place a bet against that player a microsecond after a lefty wins a match that will place him against that player in the next round.

Solely on a hypothetical basis, let's say someone paid $100,000 a month to receive access to information about prospective government activity a few seconds before that information was released to the general public.

I'd venture to say that, coupled with AI, those few seconds would give someone a distinct advantage in predicting the outcome of certain future events.

In short, you are betting against the pros.

Any other reasons for steering clear of prediction markets?

In theory, insider trading is forbidden in prediction markets. When discovered, insiders who improperly use information have their wagers voided, are subject to financial penalties and may be barred from the sites and even indicted.

Examples are government personnel with access to military intelligence and speechwriters who wager on whether a certain speaker will use certain words.

But the discovery mechanism and the enforcement of the ban on insider activity are difficult to identify and prove.

Some state regulators have tried to enforce state gambling laws and regulations against prediction markets.

Polymarket and Kalshi have deftly avoided state control over their operations by claiming that the individual event contracts they offer are exclusively regulated by the federal Commodity Futures Trading Commission (CFTC) to the exclusion of state gambling laws. The CFTC has sided with the Polymarket and Kalshi positions.

It is my view that the CFTC doesn't have sufficient staff or expertise to credibly undertake the necessary regulatory review. Indeed, the CFTC has lost a significant percentage of its personnel in recent years.

Further, since Donald Trump Jr. is a paid strategic adviser to Kalshi and sits on Polymarket's advisory board, and his investment firm has invested in Polymarket, it is difficult for me to predict that CFTC regulatory review would go against any positions taken by these firms.

Lessons from Brazil

My previous article offhandedly mentioned that it might be unwise to bet on the outcome of an election in Brazil.

We now have evidence that Brazil is on the precipice of financial ruin, and the poorest Brazilians are trying to dig out of rising debt by using prediction markets, and other online wagering apps, to make a big score.

It is not going well. The New York Times reports that online gambling is a major issue in the upcoming presidential election. Brazilians have lost about $7 billion gambling online, and the poorest bettors are digging themselves into the deepest holes.

Sometimes wisdom comes from a goat, a pig, a mouse and a comic strip. So before you open a prediction market account, or make a bet on an account you already have, ask yourself: Is all of life now one big grift? The comic strip Pearls Before Swine might have the answer.

My advice, though? Make a $10 bet with your Dodger-fan neighbor instead. Who do you like in the World Series?

Related Content

• Why Prediction Markets and Sports Betting Aren't Investing
• Why Invest In Index Funds When Prediction Markets Pay Big?
• Gambling vs Investing: How to Tell the Difference
• Should Your Brokerage Firm Be Your Bookie? A Financial Professional Weighs In
• A Future Headline: Biff’s Investing Firm Cleans Up With AI

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.

After years of advising families through the transition into retirement, I've noticed that one question comes up more than any other, and it rarely has anything to do with how much money someone has saved.

It's a short question with a complicated answer. "Will I be okay?"

People want to know if they can retire, how they would draw income if they did and what risks might derail a plan they've spent decades building. The size of the number in an account doesn't make that question go away nearly as often as people expect it to.

Why the question doesn't disappear as wealth grows

It's easy to assume this worry is mostly about how much someone has saved. In my experience, it isn't, not entirely.

Until someone feels secure about their ability to retire, that concern tends to crowd out almost everything else. Tax efficiency, legacy planning, giving — none of it feels urgent until the core question is answered.

Once that sense of security is in place, a different worry often takes its spot: "Am I doing the right thing?" More accounts, more complexity, more moving parts can start to feel harder to manage, not easier.

The question evolves rather than getting answered once and staying answered. Having clarity of how much you need in order to retire is different from knowing your balance. One is a number on a statement. The other is a plan for turning that number into cash flow you can count on, year after year, market up or down.

Until that plan exists, the worry doesn't go away, no matter how large the balance is.

The adviser who helped you build wealth may not be the one who helps you spend it

One pattern shows up constantly among people exploring a new adviser relationship: The person they've worked with did a genuinely good job growing their money. That was never really in question. What's in question is what comes next.

Growing a portfolio and spending it down are two different problems with two different risk profiles.

While someone is accumulating, market swings are mostly noise — contributions keep going in regardless of what the market did last quarter.

Once withdrawals begin, the math changes. Pulling money out during a down market can do lasting damage to a portfolio in a way that contributing during a downturn never would. That's a real, well-documented risk, sometimes called sequence of returns risk, and it's one that a lot of accumulation-focused advisers simply aren't built to manage — not because they lack skill, but because it's a genuinely different discipline.

As I put it to a colleague recently: "Clients don't just want strategy. They don't just want solutions and answers or benefits. They want execution. The moment we stop doing that, we're out of business."

That's worth sitting with, because it applies just as much to the retiree managing their own plan as it does to any adviser. A strategy that sounds right on paper doesn't mean much if there's no mechanism to carry it out, rebalance around it and adjust it as circumstances change.

A framework for answering the question yourself

Feeling OK isn't something you talk yourself into. It's the result of having real answers to a specific set of questions. Anyone approaching retirement, whether working with an adviser or not, should be able to answer each of these with some confidence:

1. The number. How much do you need to retire, based on your own spending, not a generic rule of thumb like "25 times your expenses"?

2. The income plan. How will savings convert into a reliable paycheck? Which accounts get tapped in what order and why?

3. Social Security timing. When should you claim, and how does that decision interact with taxes, spousal benefits and the rest of the plan?

4. Tax sequencing. What are the tax implications of how and when you withdraw from taxable, tax-deferred and tax-free accounts?

5. Medicare and health care. How does the timeline for Medicare enrollment intersect with the income plan, particularly around IRMAA thresholds?

6. Estate alignment. Does your estate plan still reflect what you want, or is it a document that was drafted once and never revisited as circumstances changed?

Individually, each of these is manageable. Stacked together, they're exactly the kind of complexity that keeps people lying awake doing math in their head instead of enjoying the retirement they worked for.

Why the plan matters more than the portfolio

Most financial firms are built to manage investments. Far fewer are built to walk someone through this specific set of questions and turn the answers into a coordinated plan, one that comes before the investment strategy is finalized, not after, so the portfolio is built to support a real income plan rather than the other way around.

That distinction matters because a good plan that sits in a drawer doesn't make anyone feel OK. A plan holds up only if someone is checking in on it: Adjusting the withdrawal rate after a down year, revisiting the tax strategy when the rules change, updating beneficiary designations after a life event. The plan is not a one-time deliverable — it's an ongoing process.

What resolution looks like

People who work through this successfully rarely describe the outcome in technical terms. They describe it in plain language: The picture got simpler. The jargon went away. They stopped guessing and started deciding.

That's really the goal of good retirement income planning. Not to make the topic sound more sophisticated, but to take a pile of accounts, tax questions and what-ifs and turn them into something a person can hold in their head clearly: A number, a plan for drawing income and a sense of what happens if the market has a bad year right when retirement begins.

If you've built real wealth but still find yourself uncertain about what retirement looks like day to day, that uncertainty is common, and it's solvable.

It usually isn't a sign that something has gone wrong. It's a sign that no one has walked you through the whole picture at once, and that conversation is worth having before retirement begins, not after.

Please see important disclosure information at opalwealthadvisors.com/disclosure.

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

As a nurse and now the CEO of a health company that serves older adults, I've spent decades around serious illness, aging and death. I've watched families make extraordinary decisions under impossible circumstances.

I've also seen something that still surprises people: Choosing hospice or palliative care isn't about giving up. Often, it's about focusing on what matters most.

Too many Americans believe there are only two choices at the end of life. You either go to battle by taking on every available treatment, or you surrender. This is one of the most damaging myths in healthcare.

There is another clear path. It's choosing peace.

Over the years, I've noticed that people facing the end of life often fall into one of three mindsets.

Some simply shut down. They withdraw from the world, becoming disconnected from the people and life around them.

Others fight relentlessly. Every new procedure, every hospitalization, every intervention becomes another struggle to postpone what they know is coming.

Neither approach is inherently wrong. Every person's journey is deeply personal.

But the people who leave the greatest impression on me are those who arrive somewhere in the middle. They say something like: "I've had a good life. I don't want to die, but I know death is part of life. I want to spend whatever time I have left being myself."

That isn't surrender. It's acceptance, which provides the clarity that many families desperately need.

Hospice and palliative care myths

About 2 million Americans on Medicare opt for hospice and palliative care every year, according to a report from the National Alliance for Care At Home, but the choice remains shrouded in misconception.

One of the biggest myths is that doctors stop caring. The opposite is true. Curative care focuses on defeating disease. Palliative care focuses on relieving suffering.

For people nearing the end of life, hospice shifts the goal from extending every possible day to making every remaining day as meaningful and comfortable as possible.

The question isn't whether medicine can do something, because modern medicine almost always can.

The better question is whether it should.

I've cared for people in their 90s with advanced dementia who undergo major surgery after a broken hip. Technically, the operation is successful. The X-ray looks perfect. But has the person recovered? Or have we simply repaired one body part while losing sight of the whole human being?

Medicine is remarkably good at treating diseases, but it can struggle to treat people.

That distinction matters.

Conversations to have now

The hardest conversations rarely happen between doctors and patients. They happen around kitchen tables. Adult children want one more treatment because they're afraid of losing mom. A spouse can't imagine saying no to another procedure. Old family conflicts resurface. Guilt enters the room.

Suddenly, decisions that should be about the people's wishes become tangled in everyone else's emotions.

I've seen families spend months arguing over what their loved one would have wanted because no one asked while they still could.

That's why these conversations should happen years before anyone needs hospice.

Seniors, you should tell your family what quality of life means to you. Put your wishes in writing. Explain where you draw the line between living longer and living well. Don't assume your children will somehow know. In a crisis, uncertainty almost always leads to conflict.

When families understand and accept a loved one's wishes, something remarkable often happens. The anxiety begins to lift. People stop guessing. They stop wondering if they're making the wrong decision. They can focus on being daughters and sons instead of decision-makers, spouses instead of advocates, grandchildren instead of witnesses.

They can simply love each other.

I also believe we need to change how we talk about hospice itself.

Far too many people arrive there only in the last days of life. By waiting so long, they miss many of the services that make hospice so valuable, such as expert pain management, emotional support, spiritual care if desired, social workers who help families navigate difficult decisions, and bereavement resources that continue after a loved one dies.

Hospice isn't about hastening death. It's improving life when time is limited.

In my experience, families almost never tell me they started hospice too early. Much more often, they tell me they wish they'd accepted the support months sooner.

A good ending

None of this means curative care is the wrong choice. If treatment offers a realistic chance to restore meaningful health or aligns with a person's goals, pursuing it can be exactly the right decision. The goal isn't to replace curative medicine with palliative care — it's to recognize the moment when the purpose of care changes.

Every life reaches that moment differently.

What I hope families remember is this: The measure of a good ending isn't whether we exhausted every possible medical intervention. It's whether we honored the person's wishes, reduced unnecessary suffering and gave them the chance to remain themselves for as long as possible.

In healthcare, we often celebrate fighting.

I think we should also celebrate wisdom.

Sometimes the bravest decision a family can make isn't choosing one more treatment. It's choosing one more meaningful conversation. One more story. One more shared meal. One more peaceful afternoon holding hands instead of sitting in another waiting room.

Choosing hospice isn't choosing death.

Sometimes, it's choosing how to live until the very end.

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• Age Magnificently with the Help of a Geriatric Care Manager

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 year, self-employed homebuyers do exactly what their accountants advise, then sit across from a lender who treats them as if they barely earn a living.

The write-offs that shrink a tax bill also shrink the income a mortgage underwriter will count, and that gap can decide whether you get an approval on your mortgage application or a courteous no.

This touches a large and growing share of the country. Bureau of Labor Statistics data put roughly 16.8 million Americans, more than 10% of the workforce, in self-employment as of late 2025. Upwork's research counts about 64 million people, close to 38% of workers, doing some freelance work over the course of a year.

Plenty earn more than enough to carry a mortgage, yet a conventional lender's math can still say otherwise. There is a well-worn path around the problem, plus a few moves that measurably improve where you land.

How your deductions shrink your borrowing power on a conventional loan

When you apply for a conventional loan, the underwriter doesn't look at what your business earned. They begin with the net profit on your tax return, run it through a standardized cash-flow worksheet (Fannie Mae's Form 1084 is the common one), average it over about two years, and turn the result into a monthly figure that gets weighed against your debts.

A low monthly number means low borrowing power, even when far more cash moves through your accounts than the return shows.

Not every deduction counts against you equally, though, and that detail rarely surfaces before someone assumes conventional financing is out of reach. The Fannie Mae worksheet adds several noncash write-offs, among them depreciation, the home office deduction, depletion and amortization, so those don't lower your qualifying income even though they lowered your tax bill.

What does pull the number down are ordinary cash operating costs:

• Supplies
• Subcontractors
• Vehicle and mileage
• Insurance
• Fuel
• Travel

That difference tells you how wide your own gap really is. If your write-offs are mostly depreciation and a home office, you might qualify with figures much closer to your true earnings.

If you carry heavy equipment, labor and fuel costs, a large slice of your income vanishes before the lender ever counts it.

How a bank statement loan reads your real cash flow

A bank statement loan settles the income question with your deposits rather than your return. Instead of starting from net profit, the lender totals the money that landed in your accounts in the past 12 or 24 months, discounts it to reflect the cost of doing business and spreads what remains across those months to reach a qualifying income.

That discount is the expense factor. On business accounts, lenders commonly assume expenses consume about half of deposits and count roughly 50% as income. Personal accounts get treated differently, since money reaching them has usually already covered some costs. This is also a number you can influence.

An underwriter is not tallying every credit on the page. They want deposits that are steady and roughly consistent with the income you report, and they remove anything that is not recurring business revenue, such as a transfer, a loan or a tax refund.

Overdrafts and returned payments draw the wrong kind of attention. The aim is to reconstruct what your business dependably produces.

The trade-off is rate. As nonqualified mortgage products, these loans typically run about 0.5 to 1 percentage point above a comparable conventional loan, and some programs ask for a few months of reserves.

Set that against what qualifying the conventional way would cost you, which is the deductions that lower your tax bill every year.

For many self-employed borrowers, keeping those write-offs is worth a slightly higher rate, though a thin-margin business should still run the numbers.

What to do before you apply

Borrowers who keep business and personal banking separate start from a strong position: Clean, easy-to-total deposits that tie plainly to their work and give an underwriter little room to discount them.

If your accounts are commingled, though, that's no reason to wait. A mortgage broker specializing in bank statement loans can review your deposits now and tell you what already qualifies, including whether your business or personal account makes the stronger case.

Those deposits also need to read clearly. Cash is hard to trace and often excluded, so deposit it promptly and keep records linking it to invoices.

When a large or irregular deposit lands, be ready to explain it, because anything resembling a transfer or a loan gets stripped from the calculation.

If your real costs run well below what the lender assumes, a CPA-prepared expense statement can increase the income on which your loan is based. This is where the expense factor stops being a flat 50%.

Say you deposit $20,000 a month and the lender counts half, or $10,000. If a CPA documents that your true costs are closer to 25%, the lender might count $15,000 instead, raising your qualifying income by half with nothing changed about how you operate.

It's not required, and it helps low-overhead businesses most. Ask your loan officer first, since lenders typically want the letter prepared in a specific way.

Where the program lets you choose, match the window to your trajectory. A business whose income has climbed usually looks stronger over 12 months, since a 24-month pull averages that recent year against a leaner one behind it.

A seasonal or uneven business tends to do better over 24, where the slow stretches sit next to the busy ones. Run it both ways and go with the window that best reflects your current earning power.

Line up the real costs before you fall for a house, including a down payment, several months of reserves and a rate above conventional.

Whatever you're preapproved for, make sure your cash flow comfortably covers the monthly payment and carrying costs in an ordinary month, not just a busy one.

Ask your CPA about timing, too, since the deduction strategy that saves the most at tax time is not always the one that serves you in a year when you also want to buy.

Lenders don't all read your file the same way, so gather a few quotes and select a loan officer who lays out both paths instead of selling one.

The right loan depends on what you need most: Conventional often wins on rate when your deductions are mostly the paper kind that get added back, while a bank statement loan can win on loan size or speed.

That call is yours to make. Assemble your file early either way:

• 12 to 24 months of statements
• About two years of proof of self-employment
• Your CPA's expense letter
• A year-to-date profit and loss statement

The bottom line

A conventional turndown usually says more about the measuring stick than about you. Underwriting built for a W-2 world reads a healthy business as a low earner, and the very deductions that make you a savvy taxpayer are the ones that make you look small on paper.

As the workforce keeps shifting toward independent income, the financing has quietly caught up.

Your task is to know which door fits and to arrive prepared: Clean deposits, a documented expense ratio, reserves set aside and a lender who writes these loans routinely. Do that, and self-employment stops being the reason you can't buy.

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• 7 Overlooked Tax Deductions for the Self-Employed
• A Practical Guide to Credit and Loans

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 Great Wealth Transfer is already underway, with trillions of dollars expected to pass from one generation to the next over the coming decades.

But most Americans spend more time planning a family vacation than working on their personal finances, and the amount of time they spend on their wealth transfer is even less.

In my experience, this oversight can have lasting consequences. Here are the biggest estate planning mistakes I try to help my clients avoid.

Not preparing your heirs

Wealth is a powerful tool for creating a legacy. But if you're assuming it will be a wonderful windfall that sets your family up for success after you die, you may be unpleasantly surprised. According to research from the Williams Group, 70% of wealthy families lose their wealth by the second generation, and 90% lose it by the third.

I've found that heirs are often better prepared for wealth when they develop accomplishments and confidence that are independent of family wealth. The goal isn't to make life difficult for your children, but to help them build the skills and judgment they'll need to manage opportunities responsibly.

Unfortunately, more than half of parents ages 55 and older surveyed by Morning Consult for Kiplinger say they rarely or never discuss money with their children.

That's why I encourage families to hold regular conversations about the purpose of their wealth. This doesn't have to mean disclosing every dollar. It's about helping the next generation understand how wealth was created, what responsibilities come with it and what role it should play in their lives.

The biggest gift you can leave for the next generation is clarity and financial confidence, and you can't do that if you don't talk to them.

You shouldn't be the only one talking to your children about money, however. It's hard to be a prophet in your own land, and one lesson I've learned as an adviser and parent is that children don't always take advice from those closest to them.

Sometimes they'll hear the exact same message from a trusted mentor, adviser or family friend and view it completely differently. Create opportunities for younger generations to learn from people who have good judgment and strong values.

Failing to formalize your plan

Legal processes need to be followed to ensure assets are transferred the way you want. It's always shocking to me how so few people have a will or trust. A Guardian study found that about half of high-net-worth individuals don't currently have a will.

I've seen estate disputes strain family relationships for years. In some cases, siblings stop speaking to one another because expectations were never clearly documented or communicated. If you've spent a lifetime building wealth, take the time to preserve family harmony by ensuring everyone understands your intentions before difficult questions arise.

Not protecting your wealth

A will or trust determines where assets go. Asset protection helps ensure they're still there when the time comes to transfer them. In this litigious world, asset protection is essential to protect people from lawsuit creditors and anyone else trying to separate you from your money.

Unexpected legal claims or liabilities could reduce the wealth you're hoping to pass on. I often tell clients they need a moat around their castle. I've seen many people's life's work wiped out by a judgment, regulatory issue or divorce.

Irrevocable trusts are a way to protect your assets. These types of trusts can shield your assets from lawsuits. Depending on your circumstances, they may also be able to lower your estate and income taxes.

Waiting until you're gone to make an impact

Many people assume wealth transfer is something that happens after they die. In reality, some of the most meaningful transfers happen while you're still alive to experience the benefits firsthand.

I've seen such joy in parents and grandparents when they get to see how their money benefits their offspring. It's also incredible to be so fortunate that you can give your money to places and causes you believe in and be able to see its impact while you're alive. This is why I encourage some of my clients to not wait until they're gone to give.

People are living longer these days. If you're 99 when you pass, your kids may be in their 70s and already retired. But in their 30s, 40s and 50s, your kids may be starting families, buying houses, building businesses and putting their kids through school. Transferring money at this point can provide far greater value.

Focusing on the "how" before the "who"

Everybody asks "how?" I think the better question is "who?"

• Who are the advisers helping you make estate planning decisions?
• Who is educating the next generation?
• Who is collaborating to help ensure every piece of your plan works together?

Transferring wealth requires a team, and the quality of your team determines the quality of your outcomes. I like to call this your "kitchen cabinet," meaning the group of people you trust enough to give you the right advice when you need it most.

You don't want five great professionals working independently. You want the right professionals working together. The families who navigate these transitions most successfully tend to have financial advisers, attorneys and tax professionals operating as a coordinated team.

Wealth transfer is about far more than passing down assets. It's about passing down opportunities, values and a vision for the future. With thoughtful planning, open communication and the right team of professionals guiding the process, your wealth can become a lasting legacy that benefits generations to come.

In my experience, the families that transfer wealth most successfully treat inheritance as a conversation, not an event.

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• Pass the Turkey, and Then Let's Talk About Estate Plans

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

For retirees and pre-retirees, the question has shifted, from "How do I grow my wealth?" to "How do I sustain, protect and distribute it tax-efficiently?"

Over the past few years, technological advancements in the investment world have ushered in a new era of flexibility and control.

As a financial planner and owner of Alpha Planning, I find that direct indexing and tax-loss harvesting have become strategies that I'm discussing regularly — often with clients who have brokerage accounts over $250,000 and are keen on managing their retirement tax outcomes.

What is direct indexing — and why is it different?

Most investors have grown comfortable with index funds: Buy an S&P 500 ETF, and you get hundreds of companies with one click. But direct indexing lets us go one step further.

Instead of holding shares of a fund, we own the individual stocks that make up an index, opening up far more opportunities for customization and tax optimization.

To illustrate: Imagine your portfolio is like a chef's kitchen. Index funds are the meal kit — pre-packaged, efficient and predictable.

But direct indexing is the custom kitchen, stocked with individual ingredients that let you adjust every dish to your taste. You can swap one item for another, season to your preferences or craft a meal that's uniquely yours.

This flexibility is invaluable when managing taxes and making strategic choices.

And it's not just theoretical. Our team consistently averages 1% to 1.5% of tax alpha each year in nonqualified accounts simply by trading stocks strategically — that's above and beyond any market performance.

"Tax alpha" is a measure of how much additional money you keep by lowering your tax bill, and this alpha accumulates year after year, resulting in thousands of dollars in additional value for our clients over time.

The capital gains budget: A smarter, more strategic tax plan

One concept that has become the backbone of many retirement conversations is the capital gains budget. Think of it as an annual spending plan for your realized gains: How much can you afford to distribute before tipping into higher tax brackets or triggering additional Medicare IRMAA premiums?

Intentionally setting a capital gains budget creates room to coordinate other income strategies — like Roth conversions — without crossing those crucial thresholds.

Direct indexing allows for precise control of:

Tax-loss harvesting. By tracking individual positions, we can harvest losses throughout the year, offsetting gains and smoothing out your tax bill.

Roth conversions. Loss harvesting frees up "space" in your tax bracket so you can convert more IRA assets to Roth at preferable rates and accelerate tax-free growth without impacting IRMAA.

IRMAA management. Staying under IRMAA cutoffs means keeping your Medicare premiums as low as possible.

Flexible withdrawals. Harvested losses don't just help in a single year — they often carry forward, providing valuable flexibility for withdrawals in later retirement years. This can help ensure you're less likely to trigger excessive taxes when accessing your investment accounts for future needs, often when long-term care comes into view.

A case from my desk: Linda and Bob's retirement tax playbook

Earlier this year, I met with Linda and Bob, a couple who'd recently retired with $3 million in investable assets. Their challenge: To maximize after-tax retirement income, minimize surprises and plan for their family's future.

With direct indexing in their taxable account, we harvested $75,000 in losses over the first two years of the strategy.

This loss harvesting became essential to keeping their capital gains budget on track — allowing us to convert IRA dollars to Roth while staying under Medicare IRMAA thresholds and AGI limits.

It also provided the flexibility to help fund a second home purchase without affecting their IRMAA and Roth conversion strategy thanks to the carry-over losses we had helped accrue.

The payoff? Linda and Bob enjoyed predictable Medicare premiums, more tax-free growth, more flexibility for future withdrawals and an estate strategy ready for the next generation.

Their story is a perfect example of how intentional planning — not just reacting to market swings — translates into tangible, lasting benefits.

Who benefits most?

Direct indexing and a capital gains budget aren't only for ultra-high-net-worth investors. If you have a brokerage account over $250,000 and want to take control of your retirement tax plan, these strategies could be your missing link.

They offer proactive ways to personalize your financial plan, prepare for future legislative changes and put more money to work for you.

Key takeaways

• Direct indexing brings customized flexibility — think of it like a custom-made mutual fund — you have control over when to buy and sell, not the mutual fund or ETF
• Tax-loss harvesting is more powerful when you own individual stocks
• Setting a capital gains budget helps coordinate Roth conversions and manage Medicare costs
• Strategic trading generates tax alpha — on average 1% to 1.5% per year — which compounds into substantial long-term benefits
• Harvested losses create flexibility for withdrawals in future years, helping minimize taxes as retirement unfolds — especially when future needs like long-term care arise

Final thoughts

Retirement is about more than investment returns — it's about controlling what you can and planning with intention.

If you haven't reviewed your capital gains budget or explored direct indexing, now's a good time to sit down with your adviser and ask the tough questions.

In my experience, the confidence that comes from a well-structured, tax-smart retirement plan is the most valuable asset you can own.

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

The most dangerous word in American estate planning is "permanent."

Congress used it last summer when it enacted the One Big Beautiful Bill Act (OBBBA), and every planning practice in the country quietly lost its sense of urgency in the days that followed.

The relief was understandable. For much of the preceding three years, the profession had operated under a deadline: The doubled estate exemption in the Tax Cuts and Jobs Act (TCJA) was scheduled to sunset at the end of 2025, and families with substantial wealth were counseled — correctly, under the law at the time — to compress years of transfer planning into a matter of months.

Then the deadline evaporated — and with it, for many families, the last practical motivation to reopen the estate binder.

The deadline that never came

On July 4, 2025, President Donald Trump signed the OBBBA into effect, setting the estate, gift and generation-skipping transfer tax exemption at $15 million per individual for 2026, or $30 million for married couples — up from $13.99 million and $27.98 million, respectively, in 2025.

It also provides for inflation adjustments beginning in 2027 using 2025 as the base year. The top federal rate remains 40%.

The 2026 annual gift exclusion for 2026 is $19,000.

Since the OBBBA took effect, for the great majority of Americans with substantial wealth — households with net worth between roughly $5 million and $30 million — the federal estate tax has effectively receded as a planning concern.

Why 'permanent' is a dangerous word

"Permanent," in tax legislation, is a term of art. It signals that Congress has chosen not to include a scheduled expiration in the statute — nothing more.

A future Congress remains free to revise the number at any time, and the historical record suggests it does so with regularity.

In 2001, the federal estate tax exemption stood at $675,000. By 2002, it had risen to $1 million. In 2009, it reached $3.5 million. In 2010, the estate tax was briefly repealed altogether, then reinstated at $5 million in 2011.

The TCJA doubled that figure to $11.18 million in 2018, and it drifted upward with inflation being lifted it to its current level.

Against that record, "permanent" is a description of legislative posture, not of statutory reality.

The behavioral response most families adopt on hearing the word — read the news, exhale, close the binder — is precisely the wrong one.

Four questions your documents need to address now

1. Does your existing plan still function when the exemption rises rather than falls?

Many trusts drafted during the preceding decade contain formula clauses — provisions that automatically allocate assets between a credit-shelter share and a marital share based on the exemption in effect at the first spouse's death.

A formula written to divide an estate at a $5 million or $7 million threshold behaves very differently at $15 million.

In some drafting patterns, the credit-shelter share now consumes nearly the entire estate and starves the surviving spouse's marital share. In others, the reverse occurs.

Neither outcome may reflect what the family intended when the documents were signed.

The remedy is unglamorous: Read the formula language, model the outcome under current law and amend or restate where the mechanics no longer serve the intent.

2. How should appreciated assets in your estate be handled?

This question inverts a decade of planning orthodoxy. Under the pre-OBBBA regime, the arithmetic favored removing appreciated assets from the estate — through gifts, sales to intentionally defective grantor trusts or grantor retained annuity trusts — to avoid a 40% estate tax that would otherwise apply.

That calculus was often correct. Under a permanent $30 million exemption, it frequently is not.

For families comfortably beneath the threshold, retaining appreciated assets in the estate captures the basis step-up permitted at death, which eliminates embedded capital gain from a lifetime of appreciation.

A 23.8% federal capital gains rate applied to decades of unrealized growth can now exceed the estate tax cost of holding the asset — often by a substantial margin.

The old default of "give it away" deserves a fresh calculation.

3. What impact will state estate or inheritance taxes have?

Several states levy their own estate tax at thresholds far below the federal exemptions, and additional jurisdictions impose inheritance tax on the recipient rather than the estate.

• Oregon begins taxation at $1 million
• Massachusetts at $2 million
• Washington at approximately $3 million
• New York at $7.35 million, with a distinctive cliff at 105% of exemption above which the entire estate becomes taxable from the first dollar

Our practice, Palmer Wealth Group, (I am the CEO), is based in Texas, which imposes no state estate tax, a genuine planning advantage for its residents.

But the analysis rarely stays clean. Property held in another state, family members domiciled elsewhere or a beneficiary residing in an inheritance tax jurisdiction can each trigger exposure the federal calculation misses entirely.

State thresholds change more frequently than federal, and several states index their exemptions annually. What was safe last year may not be safe this year.

4. Which trust strategies are the most tax-efficient?

This one addresses what existing trusts have quietly become. When federal estate tax was the binding constraint, the goal of an irrevocable trust was often to remove assets from the grantor's estate as efficiently as possible. Income taxation was a secondary concern. It is no longer.

Now, a trust reaches the top 37% federal income tax bracket at $16,000 of undistributed income in 2026 — a threshold a single individual does not encounter until $640,600 of taxable income.

For a trust with meaningful investment assets, the compression is severe.

Distributable net income planning, grantor-trust elections, situs selection and the choice between distributing and accumulating income each become materially more important once the estate tax rationale no longer overwhelms every other consideration.

What this review actually looks like

Taken together, these four questions form the shape of an estate plan review that has these components:

• Documentary. Retrieve the current trust and will documents and read the formula clauses aloud. The exercise is more revealing than most families expect.
• Arithmetic. Re-inventory the estate against the new estate tax threshold, separating what remains a candidate for lifetime transfer from what has quietly become a candidate for basis step-up.
• Geographic. identify every state in which the family owns real property, maintains a domicile or has significant beneficiaries and map the exposure against current state statutes.

The fourth component is coordinative — and, in some respects, it's the most difficult because estate planning, tax planning and investment management sit on three separate professional desks, plus a personal one:

• The attorney drafts the documents
• The accountant computes the return
• The adviser manages the assets
• The family too often serves as the unpaid coordinator among them

In our practice, the review typically begins with the attorney reading the formula clauses in the family's presence and ends with the accountant and the investment adviser at the same table, working from the same current inventory.

The mechanics are ordinary; the coordination is not. Its absence — not the tax code — is what most often causes an updated plan to remain uncompleted after the review begins.

Nothing in the current law prevents a future Congress from changing the exemption again. The 40% rate, the state estate tax landscape and the compressed income tax brackets that apply to trusts all remain what they were before OBBBA.

What has changed is the immediacy of the pressure to act. That change is welcome, but it should not be mistaken for a change in the underlying discipline.

Estate planning is not the practice of racing deadlines. It is the practice of building a plan that survives whatever the rules become next.

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.

Apparently, artificial intelligence is going to take our jobs.

All of them.

We'll be sitting home in our pajamas while bots do our work, answer our emails, manage our money and, presumably, complain to each other about the boss at the virtual watercooler.

I'm not buying it.

We've seen this movie before

Every technological revolution arrives carrying the same warning: This time, the machines are coming for us.

The loom was going to replace the weaver. The automobile was going to destroy jobs tied to the horse. ATMs were supposed to eliminate bank tellers. The internet was going to make entire industries — and plenty of workers — obsolete.

Now it is AI's turn.

The headlines are certainly frightening enough. AI can write reports, analyze financial statements, create advertising, answer customer questions, write computer code and increasingly perform tasks that once required highly trained professionals.

So, should we start cleaning out our desks?

Not so fast

With every new technology, some jobs have disappeared. Others have changed. And entirely new industries — and millions of jobs — have been created that nobody could have imagined.

So maybe we're asking the wrong question.

Here's an even more provocative question: What if AI doesn't make people less valuable? What if it makes the right people much more valuable?

That is where this gets interesting.

AI can analyze a mountain of data before I finish my coffee. It can draft a memo, summarize a meeting, write computer code and probably compose a perfectly respectable thank-you note.

But can it know when the numbers are technically right and the decision is dead wrong? Can it read a room? Can it recognize that a frightened employee doesn't need another spreadsheet — they need someone to tell them what happens next? Can it take responsibility?

Can it have an original idea that comes from 40 years of experience, mistakes, relationships, intuition and occasionally falling flat on its face?

Not yet. And maybe that's the point.

The future may not belong to AI

The future may belong to people who figure out how to use AI.

My good friend and AI expert Priyanka Rao co-authored a Newsweek article (paywall), "The Empty Office: What Happens When AI Runs the Company." I asked her the obvious question: "If AI can do entry-level work, where do future experts come from?"

Rao answered candidly. "This is the one I actually worry about. The risk isn't the people who get things wrong. It's the people who get things wrong and are certain they're right, because they've stopped doing the thinking that would tell them otherwise.

"That's what happens when someone learns a skill by reviewing AI's output instead of producing their own first draft under pressure and getting it corrected. Juniors used to learn by doing something badly and having someone senior take it apart.

"If AI does the first draft, that correction loop disappears quietly, and nobody notices for a few years, until someone gets promoted into a senior seat having never actually done the work unsupervised."

What could AI do?

• AI could produce a similar transformation across white-collar America
• An accountant may spend less time assembling numbers and more time interpreting them
• A financial adviser may spend less time generating reports and more time understanding a family's goals
• A doctor may spend less time documenting a visit and more time talking with a patient
• A lawyer may spend less time searching thousands of documents and more time developing strategy
• A small-business owner may suddenly have access to analytical and administrative capabilities that previously required an entire staff

Productivity can create jobs, too

We tend to think about AI productivity backward.

If 10 employees can accomplish the work of 20, we immediately see 10 jobs disappearing. But what if those 10 people can now serve twice as many customers? What if a company that previously couldn't afford a marketing department can suddenly market nationally?

What if an entrepreneur can use AI to handle accounting, research, scheduling and customer service — and therefore finally afford to hire salespeople, designers, technicians or other specialists?

Technology doesn't simply reduce the number of people required to produce something. By lowering the cost of producing it, technology can increase demand. That can create entirely new businesses — and entirely new categories of jobs.

Few parents in 1990 were encouraging their children to become app developers, social-media managers, cybersecurity specialists or cloud architects. Those jobs didn't exist.

We should assume the AI economy will invent occupations we can't yet name.

That doesn't mean we should ignore the casualties. Not everyone is going to win. Technological transitions can be brutal for the people caught on the wrong side of them.

Early-career workers may be particularly vulnerable because many of the traditional entry-level assignments — research, basic analysis, drafting and administrative work — are exactly the tasks AI can perform well.

Don't compete with AI — learn to manage it

What do you advise your young colleagues to do? I think the financial lesson is surprisingly simple. Advise them not to build their career around doing something AI can do faster and cheaper. Build it around what AI allows them to do better.

Learn how to question it. Direct it. Check it. Correct it. Combine its capabilities with expertise it doesn't possess. And cultivate the stubbornly human skills that become more valuable as machines become more capable: Judgment, empathy, creativity, leadership, negotiation, ethics, curiosity and trust.

The person who knows how to use AI may replace the person who doesn't. But I suspect there is another possibility that receives far less attention. AI may allow one human being to accomplish things that previously required 10.

And when millions of people suddenly become capable of doing more, building more and creating more, history suggests they don't simply go home.

They invent something else. The office of the future may indeed contain fewer people doing yesterday's work. But that doesn't necessarily mean there will be fewer people working. It may simply mean we'll need them somewhere else.

Five ways to make yourself and your kids harder to replace

1. Stop hiding from AI.

If your reaction to AI is, "I don't understand it, and I don't want to," you may have just volunteered to become obsolete. You don't have to become a computer scientist. You do have to learn how AI can make you better at the job you already have.

Start using it. Ask it questions. Let it summarize something. Have it analyze information, critique your work or give you 10 suggestions for solving a problem. Then — and this is important — use your brain to decide whether it's right.

2. Figure out which parts of your job a machine can do.

Make a list of what you do all day. If half of it consists of moving information from one place to another, producing routine reports, scheduling, summarizing or creating first drafts, assume AI is eventually going to do some of that.

Don't defend those tasks. Give them away. Then ask the much more important question: What can I do with the time I just got back?

That's where your future job may be hiding.

3. Double down on being human.

AI has information. You have judgment.

You can negotiate with a difficult client, recognize that your boss is about to make a terrible decision, calm an angry customer, motivate a team, sell an idea and take responsibility when something goes wrong.

Those aren't "soft skills." In an AI economy, they may become some of our hardest assets to replace.

4. Become the person who knows how to use AI — not the person waiting to be taught.

Don't wait for Human Resources to send you to AI Training 101. Experiment. Take a course outside of work. Ask your employer what AI tools the company is adopting and volunteer to test them.

And put those skills on your résumé. Don't just say, "Experienced in AI." Say what you actually accomplished: Used AI to reduce research time by 30%. Automated weekly reporting. Cut proposal preparation from three hours to one.

The World Economic Forum estimates that nearly 40% of the skills required on the job will change by 2030. That sounds frightening until you realize something important: Skills can be learned.

5. Don't make your job your financial life raft.

This is the part nobody wants to talk about.

Even if AI ultimately creates more jobs than it eliminates, that doesn't mean your job can't disappear.

• Build an emergency fund
• Pay down expensive debt
• Keep your résumé and network alive
• Don't automatically increase your lifestyle every time your salary increases
• Keep investing for retirement

Career resilience and financial resilience are becoming the same conversation. You don't need to predict exactly what AI will do to the workforce. You need to make sure you're financially prepared if it does something to yours.

Don't compete with the machine

The winners of the AI revolution probably won't be the people who know everything about artificial intelligence.

They'll be the people who know something AI doesn't: Their customers, their businesses, their colleagues, their industries — and themselves.

AI may be able to do 30% of your job.

Great.

Give it the 30%.

Then become indispensable at the other 70%.

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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 team is measured by the scoreboard, but after the game, good coaches look beyond the numbers in their constant quest for improvement.

They study video to discern strengths and weaknesses in their team and the upcoming opponent. They identify opportunities, assess risks and make adjustments before the next game.

Retirement planning deserves the same approach.

Most people know how much they have saved for retirement. They may know their investment returns, their 401(k) balance or the value of their IRA. But those numbers alone don't answer the most important question: Are you actually prepared for the retirement you want?

A strong retirement plan should be evaluated from several different angles. A retirement scorecard can help identify where a plan is strong, where it may have vulnerabilities and where adjustments could make a meaningful difference.

Here are five areas worth keeping score on.

1. Secure income: How much of your retirement income can you count on?

One of the first questions retirees should ask is not how much money they have, but how much reliable income they will have.

Social Security may provide an important foundation. Pensions can provide another source of dependable income. Some retirees may also use annuities or other strategies designed to create guaranteed income.

The next step is to compare that dependable income with the expenses that must be paid regardless of what the financial markets are doing.

Consider:

• Essential living expenses
• Healthcare costs
• Mortgage or housing expenses
• Other recurring obligations

The objective isn't necessarily to have every dollar of expenses covered by guaranteed income. Rather, it's important to understand how much of your essential lifestyle depends on your investment portfolio's performance.

A retiree with $2 million invested and $100,000 of dependable annual income may have a very different retirement outlook than someone with the same $2 million portfolio but only $40,000 of dependable income. The account balances are identical; the retirement plans are not.

2. Retirement confidence: How well does your plan hold up when things change?

Retirement rarely unfolds exactly as expected. Markets rise and fall. Inflation changes. Tax laws evolve. Healthcare expenses can be unpredictable. And people may live longer than they anticipated.

That's why a retirement plan should be tested against more than one possible future.

One way to do that is through Monte Carlo analysis, which can test a retirement plan across thousands of potential market and economic environments.

A retirement plan can be tested against periods of strong markets, declining markets, sideways markets, different inflation rates and changing tax environments.

The purpose isn't to predict exactly what the future will look like. It's to determine how resilient the plan is when the future doesn't cooperate.

A plan that works only when investment returns are strong may look successful on paper but provide less confidence in the real world. A stronger plan is one that has enough flexibility to withstand adversity without requiring the retiree to completely change course.

3. Retirement taxes: How much of your money will you get to keep?

A retirement account balance isn't necessarily the same thing as retirement wealth.

Taxes matter. A retiree may have money in traditional IRAs, 401(k)s, Roth accounts, taxable investment accounts and other sources. Each account can have different tax consequences when money is withdrawn.

That means retirement planning shouldn't simply ask, "How much can I withdraw?" It should also ask, "Which account should the money come from, and when?"

For example, a retiree might consider whether to:

• Convert some traditional IRA assets to a Roth IRA
• Realize capital gains in a lower tax year
• Coordinate IRA withdrawals with Social Security
• Manage income to avoid unnecessarily higher tax brackets
• Consider the effect of additional income on Medicare premiums
• Determine which investments should be sold to fund retirement expenses

These decisions can look relatively small when viewed individually. Over a 20- or 30-year retirement, though, the cumulative tax impact can be significant. That's why a retirement scorecard shouldn't measure only investment performance; it should also measure how efficiently the plan converts wealth into after-tax retirement income.

4. Retirement risk: What could knock the plan off course?

Risk in retirement is about much more than whether the stock market goes down.

A comprehensive risk assessment should consider several factors, including:

• Expected investment return
• Retirement time horizon
• Target portfolio withdrawals
• Market volatility
• Inflation
• Longevity
• Healthcare costs
• Liquidity needs
• Personal comfort with investment risk

One retiree may be comfortable with a portfolio that another would find difficult to stick to during a market downturn. A theoretically optimal portfolio isn't necessarily a successful portfolio if the investor can't remain committed to it during a difficult market.

The goal isn't to eliminate risk. That's impossible. The goal is to understand the risks you're taking and determine whether they're appropriate for the retirement you're trying to create.

5. Estate efficiency: What happens to the money you don't spend?

Retirement planning doesn't end when you determine that you have enough money to live comfortably. There is another question: What happens to the money that remains?

For many retirees, leaving assets to children, grandchildren or charitable organizations is an important part of the overall plan. That means estate planning should be considered alongside retirement planning rather than treated as a separate exercise.

The type of account, beneficiary designations, potential taxes, fees and the way assets are transferred can all influence how much reaches the intended beneficiaries.

The goal is about more than accumulating wealth; it's also about determining how efficiently that wealth can accomplish what you want it to accomplish — during your lifetime and afterward.

Keep evaluating your scorecard throughout retirement

A scorecard isn't valuable because it produces a number, but because it starts a conversation. A retirement plan might have excellent investment performance but a weak tax strategy.

It might have substantial assets but insufficient guaranteed income.

It might have a strong probability of success but too little liquidity for the retiree's comfort. Or it might provide plenty of income today while creating unnecessary tax or estate planning problems later. That's why the numbers need to be viewed together.

The purpose of a retirement scorecard is to identify what needs attention now. Great coaches evaluate throughout the season. They recognize what is working, identify what isn't and make adjustments when circumstances change. Retirement is a long season and deserves the same discipline.

The goal isn't to achieve a perfect score and put the plan on a shelf; it's to understand where you stand today and identify what may need to change as your circumstances, markets and priorities evolve. A strong retirement plan is evaluated, adjusted and improved throughout the retirement journey.

Great coaches don't wait until the final game of the season to make adjustments; they keep evaluating the scoreboard along the way. Retirement is a long season and deserves the same discipline.

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.

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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 of us, retirement planning starts with an age. For some people, that may be 62 or 65. Others may work until 70 to maximize Social Security benefits. Whatever the reason, our planned retirement age is a goal. But what happens if your career ends earlier than expected?

It's a problem playing out in real time. While the August jobs report revealed a more resilient labor market and a steady unemployment rate (4.1%) overall, the information industry lost 23,000 jobs.

The ADP National Employment Report showed private payrolls rose by only 38,000 in August, less than the 46,000 added in July and below the 47,000 economists expected.

When you're in your 50s or 60s, an unexpected job loss combined with a prolonged job search can dramatically disrupt years of retirement planning. Losing income during those final high-earning years can put additional pressure on savings or force you to make significant financial decisions earlier than planned.

The smart move is to build flexibility into your retirement plan in case the worst happens. This can help prevent emotional decision-making — such as choosing to drain retirement accounts or claiming benefits earlier than expected — which can have long-term consequences.

1. Get your financial life in order — and don't forget healthcare

Understanding what your finances would look like if you suddenly lost your paycheck is the first step in preparing for the unexpected.

Start by reviewing fixed and discretionary expenses, available savings and any other sources of income to determine how long you could realistically maintain your lifestyle without working.

While many financial professionals suggest three to six months' worth of emergency savings set aside, returning to work may take longer than that because of the slower job market. Aiming to save more will keep you better protected, especially if you become ill or no longer able to work.

Knowing how much money you need each month can also help you identify expenses that can be cut before you begin withdrawing from long-term savings.

A sudden loss of employment may also mean losing health coverage. If that happens before you're eligible for Medicare, options such as COBRA may come with substantially higher premiums that could drain savings.

Factoring healthcare coverage into any scenario involving unexpected job loss can help buy you more time to consider your options and protect savings.

Having funds outside of retirement accounts can offer another layer of protection. This reduces the need to sell investments or begin taking retirement distributions to cover expenses.

This becomes especially important if sudden unemployment coincides with market volatility — when selling investments may lock in losses or reduce the amount invested for a potential recovery.

2. Stress-test your retirement plan now

Understanding what would happen to your retirement plan in the event of a sudden job loss is also part of the preparation. Stress-testing your plan by running it through different scenarios can help you understand how your finances would be impacted if your current situation changed.

For example, you could model what would happen if you stopped working now, retired several years earlier than your target age, or began withdrawing from savings prematurely.

If you lose your job unexpectedly, retirement doesn't have to be the next step. Before claiming benefits or making withdrawals, consider how that could impact your retirement.

Working through different scenarios can help determine whether relying on those sources of income now makes sense, or whether continuing to work would leave you better off in the long run.

3. Stay connected

In addition to financial preparation, keeping your professional skills and network up to date can give you more options if you find yourself looking for work. This includes maintaining required licenses or designations as well as staying connected with people in your industry.

Keeping up with changes in your field later in life can make it easier to pursue another position if you lose your job, rather than feeling forced into retirement.

For many of us, the age at which we hope to stop working is the first step in retirement planning. But that timeline is subject to change at any time.

Preparing for the possibility of a sudden job loss, building flexibility into your retirement plan and stress-testing it under different scenarios will help you understand how to move forward without minimizing benefits or sacrificing years' worth of savings.

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

If you are considering purchasing a home warranty, you might want to wait until after you've read this. Today's story offers information that can help you avoid getting ripped off.

First, let's clear up a common source of confusion: A home warranty is a service contract, not an insurance policy like your homeowners insurance. It is supposed to help pay to repair or replace major home systems and appliances that break down from normal wear and tear.

That's what the ads of home warranty firms say, and there are 114 such firms in the U.S. The largest is American Home Shield. Check out this NBC News video to get an idea of what many consumers are dealing with.

One of the ways companies that offer these contracts make oodles of money is by promising to be there for you, collecting your monthly coverage payments and then coming up with one reason after another to deny claims when you need to actually use the services they've sold you.

They operate very much like after-market extended auto warranties, an industry whose motto should be, "Oh, so you drove your car after paying for our extended warranty? Who said you could do that?"

You have to give AHS credit for creative advertising — the fortune-teller ads with Saturday Night Live alum Rachel Dratch are fun. Those ads clearly state, "If AHS can't fix your covered item, they'll replace it, no matter its age." You can watch one of the ads here, which is featured on AHS' YouTube channel.

Vonda and Rick's experience: Delay after delay plus incompetence

In our office, we didn't need to look at a calendar to know this summer — the hottest ever recorded in the U.S. — was over. Something, or, to be more precise, the lack of something, was the clue: Not as many complaints from frustrated people calling about their home warranty companies refusing to repair or replace their AC units.

The home warranty is the very definition of a bait-and-switch, with advertising campaigns making the promise that, with various wording and for a monthly fee, the company is your safety net should something happen to a major appliance or your heating and air conditioning system.

A safety net is what longtime Southern California readers Vonda and Rick Perales expected from American Home Shield. "We had been subscribers for over 20 years," Vonda said. "As the company promptly repaired little things, like a dishwasher, we felt certain they would quickly remedy our AC system that had failed. Mr. Beaver, we were so disappointed."

Their discovery of just how much AHS cared about their customers was set out in this summary of a chronology that is the very definition of gross incompetence — at the very least:

• June 18. AC stopped working. Rick contacts AHS.
• June 22. Contractor arrives but says he can't access the unit because it is on a two-story roof with Spanish tile. Later that day, a different contractor arrives and offers the same reason for not accessing the unit on the roof.
• June 23. A third contractor says the AC is too old to fix and makes a request to AHS to replace the entire unit. Only a replacement compressor and fan motor are authorized.

Just a reminder that the ads we mentioned earlier say, "If AHS can't fix your covered item, they'll replace it, no matter its age."

Rick said, "Because our unit was 33 years old, the replacement parts drew too much current, leading to burned wires and the AC failing repeatedly — burning wires is a true fire risk.

"AHS sent out the same contractors, who again could not access the roof, then told us to find our own contractor. They refused to accept responsibility for the delays."

Fed up with the largest home warranty company in the U.S. refusing to honor its contractual commitments — and the statement in its ads — the couple contacted me.

I emailed an AHS media contact, asking her to help my readers. There was no response to my first email, so I sent a second, and this one prompted action, which eventually resulted in a $4,600 buyout of the Peraleses' contract.

Collateral damage

Rick reported that as of July 29, he had made 52 calls to AHS, beginning in June, trying to get contractors to repair or replace their AC. AHS required them to pay an $800 bill for Freon, as it was not covered in their policy. That would have been reasonable had AHS actually repaired their AC. Instead, it was money down the drain.

Vonda wrote to me, "We had to purchase an AC window unit at a cost of $599 and have spent $1,205 on hotel rooms due to the excessive heat. We have paid for this policy for the last 20-plus years. I do not know where we would have wound up without your help. Thank you, Mr. Beaver."

My advice

If you are seriously considering signing up for a home warranty, search the Better Business Bureau (BBB) website for reviews and complaints.

I am not only pointing out AHS, which has a BBB rating of 1.28 out of 5 stars (based on nearly 6,000 customer reviews), but the complaints about many of these companies should make you run the other way!

I have looked for a home warranty company to recommend, but I have not found one.

What can you do instead of buying a home warranty? (Again, I'm not talking about homeowners insurance — that is legit). Instead of a home warranty, consider opening a home maintenance savings account so you can budget for the repairs that every home will require at some point.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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

Every market cycle produces a handful of IPOs that seem impossible to ignore. The company dominates headlines, investors rush to gain access, and financial media debate whether the stock could become the next great growth story.

But before joining the excitement, investors should ask a more important question: Is the opportunity still attractive at today's price?

Why IPOs are different now

A generation ago, an IPO often marked the beginning of a company's growth story as a public company, following a relatively brief period as a private startup. Today, it more often marks the end of a long private‑market journey.

Many of the most successful businesses stay private for years, raising multiple rounds of capital that can amount to billions of dollars in funding and building scale before they ever list their shares.

That matters because a substantial share of value creation can happen before the IPO. By the time shares begin trading publicly, the company may already be mature and profitable.

Investors buying at the offering price are often not purchasing a ground‑floor opportunity; they are buying after much of the early growth has already been priced in. That's why investors should be careful about assuming that "initial" equals "early."

The valuation problem

When a company is widely discussed and covered positively by the media, demand can quickly overtake discipline. That can push the initial valuation quite high.

Think of it this way: Strong fundamentals do not automatically create strong investment outcomes.

For example, consider two investors who are looking at the same company. One buys during a hot IPO when enthusiasm is high, while the other waits, watches the stock trade for a period of time and buys only after the price resets to something closer to reality.

Even if they own the same company, their outcomes may be very different. Entry valuation can often determine the investor outcome as much as business fundamentals.

Are IPOs a liquidity event?

When a company goes public, the founders, early employees and private investors may already have captured years of growth. The IPO helps those stakeholders realize value, but for public-market investors, that can change the timeline. They often enter after years of private ownership, at a stage when the business is a well-known entity and the valuation can incorporate many years of extensive forward growth assumptions.

That shift means the investor's advantage is often smaller than many assume. If the company is strong, its future may still be bright. But the IPO valuation may already reflect a lot of that optimism.

You may already own it

Another reason to reconsider investing in an IPO is that many large IPOs eventually become part of broad market indexes or are quickly held by actively managed funds.

To put it another way, if you own diversified stock funds, you may gain exposure to a newly public company without ever placing an IPO order.

A series of mega-listings has also prompted several major indexes to adjust their methodology to allow for incorporation sooner than in the past.

Before buying an IPO directly, you should ask whether your existing portfolio already provides exposure through a total market fund, large-cap growth fund, sector fund or another diversified strategy. If the answer is yes, the case for adding a concentrated position weakens.

If the new company is in an industry you already are heavily invested in, you may be doubling down on the same risk without realizing it. Diversification does not eliminate risk, but it can keep a single headline-grabbing stock from dominating your outcome.

A simple IPO checklist

Before reaching out to your adviser to participate in an IPO, consider five questions:

1. Has the company already gone through most of its high-growth phase in private markets?

2. Does the offering price leave room for upside, or does it assume perfection?

3. Would I still want to own this stock if the media attention disappeared?

4. Do I already own similar exposure through diversified funds?

5. If I buy, can I size the position modestly enough that a bad outcome will not derail my plan?

If you're doubting the answers to these questions, it may be worthwhile to show patience.

A better time to decide on an IPO is often before the hype begins, when the price, the business and the role it may play in your portfolio can be evaluated objectively.

A strategy for disciplined investors

For many individuals, a smart way to approach IPOs is to wait, watch and focus on process. Let the stock trade, let the business prove itself as a public company and let the valuation settle.

Sometimes that means missing the first wave of excitement. However, that is often a small price to pay for avoiding a poorly timed purchase.

In some cases, investors may have an opportunity to buy the same company later at a similar or even better valuation, with more information and less emotion, although future valuations are uncertain.

If you do want exposure to innovation, a diversified portfolio may be a better option. Professionally managed strategies can provide exposure to companies as they enter the public markets, often without the need to chase a day-one price.

Where the value is being created

Another important shift for investors to consider revolves around a growing share of value creation that occurs in private markets rather than public markets.

Decades ago, many companies went public relatively early in their development, allowing public-market investors to participate in years of rapid growth. Today, abundant private capital from venture capital firms, private equity sponsors, sovereign wealth funds and other institutional investors enables companies to remain private much longer.

As a result, some of the most dramatic growth in revenue, users and enterprise value may occur before a company ever reaches the public markets.

For qualified investors seeking exposure to earlier-stage innovation and growth, participating through professionally managed private-market strategies may represent a more direct way to access this part of the corporate life cycle, though private investments come with their own risks, higher investment minimums, reduced liquidity and longer holding periods.

The bottom line

IPOs can be compelling, especially when they may involve well-known companies poised to disrupt markets in a positive way. But investors should remember that an exciting story is not the same thing as a successful investment.

A disciplined IPO strategy is about recognizing where value is created, who captured it first and whether the public offering still offers a reasonable purchase price.

For most investors, the recommendation is for patience and diversification. Introducing private markets exposure may also be a way to gain access to a portion of where the value creation has shifted.

The next time a company with a great deal of hype goes public, work with your adviser to review the price, your existing exposure and the role the stock would play in your portfolio. If the answer is not clear, waiting is often the most disciplined move of all.

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

Editor's note: This is the second article in a two-part series on investing via Delaware statutory trusts (DSTs) investing. The first is Why a "Fee-Based" DST Investing Sales Pitch is a Red Flag for Investors.

Delaware statutory trust (DST) investors sometimes ask, "Why am I paying taxes on more income than I actually received in cash?"

At first glance, it may seem confusing. However, this is not unique to DST investing — it is the same concept that has applied to direct real estate ownership for decades.

This is how we explain it at Kay Properties and Investments, which has been helping thousands of DST investors for nearly 20 years, and where I'm the CEO.

A simple example

For decades — indeed, for generations — real estate owners and landlords have followed the same basic financial principle: Not every dollar of rental income should be distributed immediately. A prudent owner plans ahead by setting aside reserves for future expenses that potentially protect and preserve the property's value.

Imagine you personally own a commercial building that generates $200,000 in annual rental income. During the year, you discover the roof has reached the end of its useful life and will need to be replaced in the near future. Rather than distributing every dollar of rental income to yourself, you wisely retain a portion of the cash flow each month to build a reserve fund for the future roof replacement.

At year-end, you may have only withdrawn $150,000 in cash, with the remaining $50,000 held in the property's bank account as reserves.

Even though you didn't receive that $50,000 personally, it is still income generated by your property. Under IRS tax rules, you generally report the property's taxable income — not simply the cash you chose to distribute to yourself.

At first, this may result in you paying tax on income that remained in the property's reserve account.

However, when those reserve dollars are ultimately used to replace the roof (or any other type of repair or investment in the property, such as resurfacing the parking lot, renovating space for a new tenant or completing other improvements), those expenditures become investments back into the property.

As those costs are recognized for tax purposes over time — major improvements are generally depreciated over their recovery periods rather than deducted all at once — they generally provide write-offs, expenses and future tax benefits to the property's owners, making the earlier timing difference largely a matter of when the expense and tax benefit is realized rather than whether it is realized.

This has been standard practice among real estate owners for decades and is simply part of responsible property ownership and long-term asset management.

How rental income is reported in a DST

Just as with direct real estate ownership, a DST property receives rental income from its tenants throughout the year.

Business tenants that pay rent in the course of their trade or business generally report the rent paid to the property on IRS Form 1099. The DST asset manager receives these forms on behalf of the investors and typically prepares a Nominee 1099 allocating each investor's proportional share of the property's gross rental income.

The Nominee 1099 is primarily an informational reporting document that helps reconcile the rental income reported to the IRS. It is not the document used to calculate an investor's taxable income. Instead, it serves as a record-keeping tool that ties together the gross rents reported by tenants with each investor's ownership interest in the DST.

In addition, DST investors receive a calendar-year balance sheet and income statement for the property. These financial statements reflect the full year of property operations and are prepared by the DST sponsor.

This financial information breaks down the entire DST property's financial information as well as further details of each individual investor's percentage ownership of the DST and their corresponding pro rata numbers. Typical DST financial information at year-end will include the property's gross rental income, operating expenses, net income and balance sheet.

The net income based on your pro rata percentage interest in the DST is an important starting point, but your CPA or tax preparer will adjust it — most notably for depreciation — when preparing your tax return, generally relying on the tax reporting package (often a grantor letter) provided by the sponsor rather than the operating statement alone. (Read on for why cash-basis net income and taxable income are not the same figure.)

Why cash distributions and taxable income may be different

DST investors may have questions if the amount of cash distributions they receive during the year is less than the taxable income reported by the DST property.

This difference is completely normal in commercial real estate whether the investor owns the property outright or a percentage of a DST.

One of the primary reasons is that prudent property management often requires retaining cash to build reserves for future property needs rather than distributing every available dollar to investors.

Those reserves may be accumulated for:

• Tenant improvements for lease renewals or new tenants
• Leasing commissions to secure a new tenant
• Roof replacements
• Parking lot resurfacing
• HVAC replacements
• Landscaping and exterior improvements
• Other major capital expenditures that preserve and improve the property

Although these reserve dollars may temporarily reduce current cash distributions, they remain assets of the property and continue to belong to the DST investors collectively based on their proportional ownership interests.

The reserves are not owned by the DST sponsor or asset manager — they are investor-owned funds being held at the property level for future capital needs. If reserve funds ultimately are not needed for their intended purpose, those funds remain property assets and will be distributed back to investors on a pro rata basis upon the sale or disposition of the property, consistent with the governing DST documents.

Two other reasons taxable income can differ from cash distributions received

Depreciation. One of the most significant tax features of real estate is depreciation. Each year the tax law allows the property's owners to deduct a portion of the building's cost, even though no cash is actually spent.

In the early years of a DST hold, depreciation often shelters a substantial portion of the property's net income — which is why many investors initially report taxable income that is lower than the cash they receive.

As those depreciation deductions decline over the hold period, taxable income tends to rise relative to cash flow.

Mortgage principal. In a leveraged DST, repaying mortgage principal uses the property's cash but is not tax-deductible. As depreciation deductions decline and a growing share of each mortgage payment is applied to principal, an investor may report taxable income that exceeds the cash actually distributed.

This effect — sometimes called "phantom income" — is a normal feature of leveraged real estate, whether owned directly or through a DST, and works alongside the reserve timing difference described in the main article.

The real estate ownership timing difference: Taxes today, tax benefits tomorrow

One point that is often overlooked is that reserve building generally creates a timing difference, not necessarily a permanent tax cost.

During the period reserves are being accumulated, an investor may report more taxable income than the amount of cash actually distributed because some of the property's cash flow has been retained for future capital needs.

However, when those reserve dollars are eventually used — to replace a roof, resurface a parking lot, install HVAC systems and so on — the property incurs those expenditures on behalf of its owners. Because each DST investor owns a beneficial interest in the property, each investor will receive their proportional share of the expenses and write offs associated with those capital expenditures.

As those reserve dollars are invested back into the property, the related expenses and write-offs are passed through to investors based on their ownership interests, helping offset taxable income over time. Because most of these items are capital in nature, the related deductions are generally realized gradually through depreciation and amortization rather than entirely in the year the reserves are spent.

In other words, while a DST investor may have paid tax earlier because reserves were accumulated instead of distributed (the same way as when they directly owned real estate and built reserves), those future expenses will help offset taxable income in later years.

What initially appears to be paying tax on "income you didn't receive" is often simply a matter of tax timing rather than an additional permanent tax burden. This is the case whether you own an interest in a DST or own a property outright.

Example timeline: How a reserve timing difference works

Imagine you own a 1% interest in a DST.

Year 1

• Rental income allocated to you: $100,000
• Cash distributed to you: $95,000
• Reserved by the property for future capital improvements: $5,000

Although you received only $95,000 in cash, the property earned $100,000, so you may report taxable income based on the property's operations rather than simply the cash distributed. (This illustration is simplified; your actual taxable income would reflect operating expenses, mortgage interest (if it were a leveraged DST but not if it was a debt free DST) and depreciation.)

The $5,000 was not paid to the sponsor — it remained your money as part of the property's reserve account, along with the reserves attributable to the other DST investors.

Year 2

The property uses the reserve funds to:

• Replace the roof
• Resurface the parking lot
• Complete tenant improvements for a new lease
• Pay leasing commissions to secure a new tenant

Because you are a beneficial owner of the DST property, your proportional share of those capital expenditures is reflected in the property's tax reporting. Those expenditures generally create future tax benefits that help offset taxable income in later years, generally realized through depreciation and amortization over the assets' recovery periods.

The result: Although you may have paid tax on the additional $5,000 in Year 1 because it remained in reserves, those reserve dollars were ultimately invested back into the property for your benefit.

The associated future expenses help offset taxable income over time, making the difference between taxable income and cash distributions a matter of timing rather than a permanent additional tax burden.

The bottom line

The difference between DST cash distributions and taxable income is often misunderstood, but it is simply a reflection of how commercial real estate ownership has worked for decades regardless of if it is owned outright by the investor or by a DST.

Think back to the example of the landlord who owned a building and prudently retained a portion of rental income to build reserves for a future roof replacement. Although that owner received less cash in hand during the year, the reserve funds still belonged to the owner, remained invested in the property, and were ultimately used to preserve and enhance the value of the real estate.

Those expenditures ultimately generated expenses associated with those improvements, helping offset taxable income over time.

A DST simply follows that same long-established and widely accepted real estate ownership practice through a professionally managed ownership structure.

As always, because every investor's tax situation is unique, investors should consult their CPA or qualified tax adviser regarding the tax treatment of their individual DST investment.

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• How to Use DSTs and 1031 Exchanges for Diversification
• How Do You Step Away From Your Real Estate Empire Without Facing a Giant Tax Bill?

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 public school teachers and other K-12 employees, retirement planning involves more than a pension and a single workplace savings account.

Depending on the employer, educators might have access to both a 403(b) plan and a governmental 457(b) plan, each offering tax-advantaged savings and features that can become particularly useful at different stages of a career.

Because the plans are often presented separately during benefits enrollment, employees might assume they need to choose one or the other.

In many cases, eligible workers can contribute to both, creating additional savings capacity along with more flexibility in determining when and how retirement assets are eventually used.

Why having both plans can matter

A 403(b) is available to employees of public schools and certain nonprofit organizations and functions in many ways like the 401(k) plans commonly offered in the private sector.

A governmental 457(b) is available to many state and local government employees.

Both generally allow employees to save through payroll on a tax-deferred basis, with Roth contributions also available under some plans.

For 2026, the standard employee contribution limit is $24,500 for each plan. Eligible workers age 50 and older might also qualify for catch-up contributions, while participants ages 60 through 63 might be able to make larger catch-up contributions if their plans allow it.

A 403(b) might also provide an additional catch-up opportunity for certain employees with at least 15 years of service.

The separate contribution limits can be especially valuable for educators who are able to save beyond the maximum permitted in one account. An employee with access to both plans could potentially contribute $24,500 to a 403(b) and another $24,500 to a governmental 457(b) in 2026 before applicable catch-up contributions.

Few households will be in a position to contribute the maximum to both accounts every year, but the additional room can become valuable later in a career when earnings are higher, major expenses have declined, or an employee is trying to accelerate retirement savings.

A 457(b) can offer added flexibility

The differences between the two plans become more important as retirement approaches.

Governmental 457(b) plans can provide added flexibility for employees who leave their employer before age 59½ because distributions after separation from service generally are not subject to the 10% additional tax that can apply to early withdrawals from other retirement accounts.

Different rules and exceptions apply to 403(b) plans, making the expected timing of retirement an important consideration when deciding how to allocate savings between the two accounts.

Consider a teacher who began working in her early 20s and expects to retire after more than 30 years of service. If she leaves her school system before she expects to draw heavily from her other retirement accounts, assets accumulated in a 457(b) could provide another source of income during the transition.

An educator planning to remain employed longer might place more emphasis on features of the 403(b), including the additional catch-up provision that might be available to long-tenured employees.

How the plans can work together

The value of having access to both accounts can change over the course of a career. A teacher in the middle of a career might contribute primarily to a 403(b) while balancing housing costs, college expenses or other financial priorities.

As those expenses decline, adding contributions to a 457(b) can provide another way to increase tax-advantaged retirement savings.

Retirement timing should also factor into the decision. An educator considering an earlier retirement might value the withdrawal flexibility of a governmental 457(b), while a long-tenured employee trying to increase savings late in a career might want to determine whether the 403(b) plan's additional catch-up provision applies.

Employees with sufficient income to contribute to both can also build separate pools of retirement assets that could provide additional flexibility when they begin drawing income.

Investment choices, fees and plan features should be part of the comparison, as well. Two plans offered by the same employer can have different investment menus, administrative costs, Roth options and loan provisions.

Understanding those differences can help employees decide where additional retirement dollars can be best directed.

Review your options before retirement

Educators approaching retirement should review the rules governing each account well before they expect to leave the workforce. The tax treatment of withdrawals can depend on the type of plan, the employee's age, when employment ends and other circumstances.

Reviewing those provisions several years ahead of retirement can provide more opportunity to coordinate workplace accounts with pension income, Social Security and other savings.

Benefits enrollment can also be a useful time for employees who have spent years automatically contributing to the same plan to revisit what their employer offers.

Asking whether both a 403(b) and governmental 457(b) are available, reviewing contribution and catch-up provisions, comparing investment choices and understanding withdrawal rules may uncover options that received little attention earlier in a career.

Teachers spend much of their professional lives planning around school years, grade levels and milestones that can be seen well in advance. Retirement benefits deserve the same periodic review.

Understanding how a 403(b) and 457(b) can work together might give educators more room to save during peak earning years and greater flexibility when the time comes to turn those savings into retirement income.

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• What to Do If You Plan to Make Catch-Up Contributions in 2026
• Pros and Cons of 403(b) Plans

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.

By spring 1961, NASA was already launching rockets. Alan Shepard had just ridden one into space and back, a 15-minute flight.

Twenty days later, President John F. Kennedy raised the stakes in one sentence: "I believe that this nation should commit itself to achieving the goal … of landing a man on the moon and returning him safely to the Earth."

A quarter of a million miles, and back. Getting home wasn't an afterthought. It was in the mission from day one.

Nobody responded by shopping for a bunch of equipment. This was unknown territory. The mission plan came first, followed by years of engineering and training.

Once they had the mission mapped out, and engineering had their strategies in place, then they gathered the materials and tools needed for the job ahead.

How retirement planning is like that

Retirement planning is no different. While you are working and the paychecks keep coming in, you're flying short missions. Mistakes get refueled by the next contribution.

Retirement raises the stakes the way the moon did: The trip is longer, refueling stops, and the whole point is coming home safely (not running out of money).

The retirement planning mission is defined by your lifestyle and legacy goals. The engineering comes second, and its job is to get more out of your money while it carries out that mission.

Some retirees want more legacy or more flexibility and will accept a bumpier ride to get it. That's not wrong — it's your preference.

Others give up some upside for a smoother, more predictable ride, trading what matters less for more of what matters more.

There is no right or wrong answer. You decide the mission. Everything else is engineered around it.

The problem today is that too many soon-to-be retirees start buying tools and materials before the mission is defined: An annuity here, a REIT there, a CD because the rate looked attractive.

After the equipment is bought, they look to see what they can build. That's backward, and it's what often gets in the way of a good retirement plan.

Here's how to build a more comprehensive retirement plan, step by step.

Projections: The mission comes first

Your plan is your mission statement:

• What kind of retirement experience do you want?
• How much of your wealth is for lifestyle and income?
• How much is for legacy?

On the income side:

• Do you want more flexibility with a wilder ride?
• More predictability with less thrill?
• A happy middle built just for you?

Remember Kennedy's second clause: The mission was the safe return. Growing your money to become the richest person in the graveyard was never the mission either. Living on it, for decades, is.

Notice what we're doing here: We're defining the path forward, guided by the mission expectations. Not one product has been mentioned.

Strategies: Engineering comes second

Apollo crews logged thousands of simulator hours, and the engineers running the simulations rarely allowed a clean flight. They fed the crews the broken versions: Failed engines, dead radios, alarms mid-descent.

The crews knew the conditions ahead better than anyone alive and still trained for the ones no one could foresee.

This is your strategy session. If these dollars are going on this journey, how do they travel efficiently? This is where tax strategy and withdrawal sequencing come into play, where income, taxes, healthcare and legacy get coordinated. Mini missions, all serving the big one.

During Apollo 11's landing on the moon, computer alarms flashed, and then they discovered the landing zone was full of massive boulders. Neil Armstrong didn't panic or wing it. He flew past them to smoother ground and landed.

The crew never predicted that moment. However, they were prepared to react, and a prepared reaction is better than a risky prediction.

Investments and products: Equipment comes third

Only after the mission was set did the equipment get its assignments, and every piece was a specialist. The Saturn V was the rocket itself, 36 stories tall and nearly all of it fuel. It had one job: Throw the crew toward the moon. It burned itself out in minutes and fell away into the ocean, stage by stage.

The lunar module was the spindly, foil-wrapped lander riding up top, so specialized it could fly only in the vacuum of space. It carried two men down to the surface, lifted them back off and was left behind.

And the heat shield did absolutely nothing for eight days. Dead weight, riding in silence, until the capsule hit the atmosphere at 25,000 miles per hour, and the shield burned away, layer by layer, so the three men inside wouldn't.

No component was chosen on a vendor's pitch. Each was recruited because the mission required it.

Your investments and products deserve the same discipline. Diversify your assets by strategy, not investment ambiguity or hope that growth solves everything. Each investment or product should do a specific thing, at a specific time, in a specific way.

Some fund income in the early years. Some chase growth you won't touch for a decade. Some sit quietly until the markets crash and then get tapped for income while your other accounts recover. (For more on this strategy, check out my book, How to Retire on Time.)

Follow systems, not sentiment

Mission Control ran on flight rules, checklists and go/no-go polls written before launch. When an oxygen tank exploded on Apollo 13, nobody improvised from the gut. They worked the procedures and brought the crew home. They followed systems, not sentiment.

Write your processes down while you're calm so that when the markets crash, taxes go up, or something else unexpected happens, you'll know what to do. A process invented mid-crash is not a process. It's a fear-based reaction.

Run your retirement in this order:

• Plan (mission) first
• Strategies (engineering) second
• Investments and product (equipment) third

That way, the product pitch loses its power. Buy this annuity. Lock in this rate. Try this tool. Those lines don't work on someone with a mission. When the plan comes first and the strategies second, the right tools naturally select themselves.

So, before anyone shows you another product, ask the questions NASA asked before anything left the ground: What's the mission?

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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 starts at the very beginning. You hold your baby in your arms and feel a deep, primal desire to give them everything they need. At some point, though, it's time to tighten the purse strings and help them make responsible decisions.

Giving your kids everything they want can cause more problems than it solves, not only during their formative years, but also when they're well into adulthood. There can be a fine line between financially helping adult children and putting them into a situation in which they're financially reliant upon you.

The 'too-nice neighborhood' problem

According to a recent survey from mortgage lender Veterans United Home Loans, more than half of parents of adult children are willing to help their kids purchase a home. Sometimes that's helping with a down payment or closing costs. Other times, it's cosigning a loan.

Problems quickly arise when parents help kids buy houses they can't afford to maintain on their own. Whether it's a monthly payment that burdens the budget or homeowners association (HOA) fees that feel excessive, helping your kids buy a house that they can't afford can be more of a curse than a blessing.

Instead, help them buy within their means or match their down payment to ensure they have some financial skin in the game.

Avoid lifestyle inflation by proxy

If you paid for a somewhat luxurious life for your kids or took extravagant vacations when they were younger (and continue to do so into their adult years), your kids might feel that a certain lifestyle is the norm and come to expect it.

Trying to keep up with a lifestyle once provided by financially established parents can rapidly become problematic.

Covering rent, vacations or luxury expenses tells your kids that their current lifestyle is normal even when it's not sustainable. Once support stops, the adjustment can be brutal, and the kids might try to scramble to afford the same niceties to which they've become accustomed.

This isn't to say that you can't occasionally splurge on a fun family vacation or other luxury, but rather to suggest that boundaries are clear that such a splurge isn't to be expected.

You've probably learned how to deal with lifestyle inflation, as many successful people have. Don't allow it to become your kids' problem by proxy.

Gifts should build habits, not dependence

You can be generous with your adult kids without risking bigger problems. Offer to pay for tools that can create momentum so they can stand on their own, such as professional certifications, seed money for a business or contributions to a retirement account.

The goal is empowerment, not entitlement. If you can help set them up for success, do it with clear expectations that you thoroughly discuss.

Ensure the "help" you provide is actually helpful — a certification in a career your child has no interest in will likely be a waste of money, as would seed money for a business your child wouldn't be able to keep afloat.

Talk openly about the trade-offs

If you gift something to adult kids, explain what the gift does and doesn't cover. If you buy a home, clarify who handles taxes and maintenance. If you pay their tuition, make clear it's a one-time payment. Clarity today prevents conflict tomorrow.

Examine the complications and relational strain that can come with changing your role with your child from "parent" to "lender" and decide if it's worth it. If you expect your child to pay you back, have a clear agreement on the terms so there's no ambiguity in the payback of the funds.

Protect your own financial health

Parents often dip into retirement savings to help adult children, but that kindness can jeopardize long-term stability. It can be a bad idea to earmark money to fund your adult child's lifestyle when you might need that money for your retirement.

Remember: Your kids can borrow money for a house or an education, but you can't borrow your way through retirement. Being financially ill-prepared for retirement because you're helping your kids can backfire on everyone involved if they have to then step in to help you survive.

Helping your adult kids in a productive way can be beneficial, but putting your own finances at risk can damage your financial health. Instead, choose when you want to help, and be clear in your intentions of wanting to help your kids thrive in adulthood on their own.

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

Do I need a will, a trust or both? It's one of the most common questions we hear, and the answer is rarely simple. It depends on your family, your assets, your priorities and how much work you're willing to do now to make things easier for the people you leave behind.

Here's how we typically walk clients through the decision.

The core difference

A will is an ancient tool, which traces back to English common law and the Middle Ages. In many ways, it still operates on a system that's hundreds of years old.

When you die with a will as your primary estate planning vehicle, your estate goes through probate, which is a court-supervised process of settling what you owned. In most places, probate is slow, expensive and public.

Some states are less slow, less expensive or less public, but in general, probate is a complex and costly legal process.

A trust does much of the same work as a will, but it's a far more modern structure. A revocable living trust functions as a will-replacement vehicle. It helps you arrive at the same destination — your assets go to the people you choose. However, while a will typically goes through the probate court process, a trust can bypass it.

Some people need both

If your plan is built around a revocable trust, you still need a will. It will just play a different role. This fact tends to surprise a lot of people.

Think of it this way. A "will-only" plan uses the will to say who gets what and when. But once you have a revocable trust, the trust holds those details, and the will becomes a safety net beneath it.

For a trust to work, assets must be inside it or have a way to get in. If you pass away before you've retitled an account or updated a beneficiary designation, your will acts as a catch-all.

Instead of spelling out your whole family story, this will just says one thing: Sweep whatever is left in your probate estate into the trust to be administered under its terms.

The myths that hold people back

The biggest misconception we hear is that trusts are wildly expensive and only for the wealthy. Most people simply don't know what a trust is or how it works.

About 95% of the time, when someone says "trust," they mean a revocable living trust (also called a living trust). There are many other kinds of trusts, including spousal lifetime access trusts, life insurance trusts and more. These trusts typically don't enter the picture until you've built significant wealth.

Myths exist on the will side as well. Many people believe a will avoids probate. It doesn't. Others assume that being named executor (or personal representative) automatically puts them in charge. It doesn't either.

Until a will goes through the probate process and a court appoints someone as the executor or personal representative, the person named in the will has no legal power or authority.

Three key questions to ask yourself

If you're trying to decide between a will and a trust, ask yourself the following:

1. How would your family get by in the weeks after you're gone?

Probate can slow down access to money. Ask how important it is that your loved ones, especially a surviving spouse, can pay bills and keep living their lives. If immediate access matters, avoiding probate through a revocable trust deserves a serious look.

2. Who do you want doing the work?

Setting up a trust takes effort during your lifetime. Some families place a high value on making things efficient for their kids and grandkids while others don't. The question is whether you'd rather put in the work now or leave the next generation to handle it later.

3. How much do you care about privacy?

Probate usually produces an inventory of what you owned. In most states, that inventory is a public document.

Some people do nothing but go through probate records looking for houses to purchase at a discount, and few families enjoy getting a "sorry for your loss, want to sell the house?" call. A trust keeps those details private.

Overall, the choice between a will and a trust isn't about which is fancier or who's wealthy enough to need one. It comes down to how much you value privacy, how quickly your family needs access to your assets, and whether you'd rather do the work now or leave it to the next generation.

Once you understand what each document does and what it doesn't, the right answer will come into focus.

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

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

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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.

One of the biggest misconceptions I encounter is that inherited investments should simply be sold.

Stocks are not cash. Many portfolios are built around long-term goals, whether that's preserving family wealth, generating future income or supporting future generations. Selling everything may often seem like the easiest option, but it doesn't always align with the investor's wishes.

This happens all too often. Investors spend years building wealth through brokerage accounts. They follow the markets, make strategic decisions and carefully build portfolios designed to achieve long-term financial goals.

Then, when it's time to put an estate plan in place, those same accounts are often left out of the conversation.

When stock portfolios aren't properly addressed in an estate plan, loved ones can be left trying to answer questions they were never prepared for.

• Should certain investments be kept or sold?
• Was the portfolio intended to support future generations?
• Were there specific goals behind the investment strategy that beneficiaries should understand before making big decisions?

If there are no clear instructions, even the most well-intentioned estate plans can become a headache for beneficiaries and cause confusion or worse — costly mistakes.

Most Americans haven't planned for their assets

Estate planning remains widely neglected. More than half (56%) of Americans don't have a will or trust, according to Caring.com's 2025 Wills Survey. People still view estate planning as something that can wait until later or is only for wealthy individuals.

This myth leads to countless assets being left without clear instructions for the people who will eventually inherit them.

Investing has also become more accessible than ever. More than 145 million people globally used stock trading apps in 2024, according to the Business of Apps Fintech App Report 2025. These apps give individuals easy, user-friendly access to building and managing their own portfolios.

The challenge is that while investing has become easier, planning for what happens to those investments after death often doesn't take place. Countless investment accounts exist without any clear estate planning instructions attached to them.

This problem isn't limited to people who have no estate plan at all. I often see it among people who have already taken the important step of creating one.

They may have a will. They may have discussed their wishes with family members. They may even have worked with attorneys or financial professionals. Yet their stock portfolio remains largely undocumented.

Family members may know the accounts exist but have little understanding of the intentions behind them. They may recognize certain holdings but don't understand why they were purchased in the first place.

• Was a particular investment intended to be held for another decade?
• Was the portfolio built to generate income for a surviving spouse?
• Was preserving the account more important than distributing it immediately?
• Who was the investor's financial adviser?

Those answers, along with important details about the investor's risk tolerance, are rarely documented, and beneficiaries are often left making important financial decisions without the context that guided the investor's strategy in the first place.

Stock liquidation isn't always the best plan

I've seen beneficiaries inherit a portfolio and begin liquidating positions simply because they don't know what else to do. That tactic is understandable. When there are no instructions, people are forced to make decisions based on limited information.

Some investors may have wanted heirs to retain certain long-term investments. Others may have wanted the portfolio to support goals such as education, home purchases or broader family support.

There may also be important tax implications beneficiaries should understand before taking action. Without guidance, those intentions can easily be lost.

The situation becomes even more complicated when there is no transfer on death (TOD) designation, no beneficiary designation or no trust directing the asset.

In those cases, the stock portfolio will typically become part of the probate estate, creating additional delays and expenses, and leaving the management of the portfolio to the administrator or executor rather than the ultimate beneficiary.

Before assuming a portfolio should simply be liquidated upon their death, investors — whether self-managed or accredited — should decide how they want those assets handled.

• Should certain investments be retained?
• Should others be sold and distributed?
• Have those wishes been documented clearly enough for beneficiaries and executors to carry them out?

The goal here is to leave enough context behind so beneficiaries aren't forced to guess. That starts with:

• Maintaining an inventory of brokerage accounts
• Keeping beneficiary information current
• Documenting the purpose of the portfolio
• Clarifying which holdings should be kept or sold
• Leaving contact information for any financial professionals involved

These details will make a significant difference when beneficiaries are trying to make informed decisions during a difficult time.

What happens when no instructions exist

When no instructions exist, families are often left piecing together information on their own. In many cases, the first challenge is simply identifying what accounts exist. A family may know a loved one invested throughout their lifetime, but have no idea where those accounts are held.

Locating records, accessing accounts and understanding how they fit into the broader estate can take significant time, creating unnecessary administrative burdens for executors.

Then comes the decision-making. I've seen beneficiaries inherit portfolios and immediately begin selling assets because they believe that is what they're supposed to do. I've also seen families disagree because each person has a different understanding of what the investor intended.

Nobody is acting with bad intentions. The problem is that they're trying to make important decisions without enough information. What should have been a relatively straightforward transfer of wealth becomes a far more complicated process than it needs to be.

What investors owe their beneficiaries

A few clear instructions go a long way and can help loved ones understand the purpose behind a portfolio, preserve wealth where appropriate, avoid unnecessary confusion and make more informed decisions.

Estate planning is not simply about transferring assets. It's about transferring clarity. You have to remember that the more guidance investors leave behind today, the easier it will become for beneficiaries to make thoughtful decisions when they don't have someone to guide them.

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

If you're already contributing enough to capture your full 401(k) match, you've got the basics covered. The bigger opportunities — and the ones I see even diligent savers miss — are found a level up from there.

After more than a decade of helping people build their retirement plans as a CFP® professional, I've found that most people stop optimizing right after the match.

Other savings accounts and strategies that could work in their favor go unused for years, not because they're complicated, but because nobody ever walked through them step by step.

Here are five that can make a meaningful difference for people who are already saving well and want to do more.

1. Take advantage of an HSA's triple tax benefits

If you're eligible to contribute to a health savings account (HSA), it may be the most underused account you have.

HSAs offer a rare triple tax advantage: Contributions can be made pretax or may be deductible, earnings grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

For 2026, you can contribute up to $4,400 for self-only coverage or $8,750 for family coverage, plus another $1,000 if you're 55 or older.

Most people treat their HSA like a checking account for copays and prescriptions. You don't have to. You can pay medical costs out of pocket now, let the HSA grow untouched for decades and reimburse yourself years later, as long as the expenses were incurred after you established the HSA, weren't previously reimbursed or deducted and you kept adequate records.

I've worked with people in their 50s who'd been quietly saving old medical receipts for this exact reason, without ever calling it a strategy. Used that way, an HSA functions like one of the most tax-advantaged retirement accounts you have access to, not just a place to park money for copays.

2. Choose pretax or Roth in your 401(k) on purpose

Most people never actively decide between pretax and Roth contributions. Their 401(k) defaults to whatever the plan set up on day one, and they never revisit it. I've reviewed plans for people who hadn't looked at this choice in over a decade, even though their income, and the right answer for them, had changed completely in that time.

The difference matters. Pretax contributions generally reduce your taxable income now, while withdrawals are generally taxed as ordinary income later. Meanwhile, Roth contributions don't provide a current deduction, but qualified withdrawals are tax-free.

A useful starting point is to compare your marginal tax rate today with the rate you reasonably expect when the money is withdrawn. Keep in mind future required minimum distributions (RMDs), tax-law uncertainty, and the value of having both taxable and tax-free income sources in retirement.

For 2026, the 401(k) employee deferral limit is $24,500, with an additional $8,000 available if you're 50 or older.

One change worth flagging for this year: If your 2025 FICA wages from the employer sponsoring the plan exceeded $150,000, your 2026 catch-up contributions generally must be made as Roth contributions. It's a rule that's easy to miss.

There's no universal right answer here, only the one that fits your specific tax situation. Modeling your expected income and tax bracket in retirement with a retirement planning tool can help you make that call instead of guessing. (Note: I'm head of support and a financial planning educator at Boldin.) Make it a real decision, not a default.

3. Look into a mega backdoor Roth if you still have room to save

This one is for higher earners who've maxed out the accounts above and still have money left over to put away.

If your 401(k) plan allows after-tax contributions, separate from Roth contributions, you may be able to save well beyond the standard deferral limit. For 2026, the combined 401(k) employee-and-employer contribution limit is $72,000, or 100% of your compensation if less.

Catch-up contributions generally sit on top of that limit, potentially bringing the total to $80,000 if you're 50 or older, or $83,250 if you qualify for the higher age-60-to-63 "super" catch-up.

Once you've maxed your regular deferral and accounted for any employer contributions, the remaining room can sometimes be filled with after-tax dollars, then converted to Roth, either through an in-plan conversion or an in-service rollover to a Roth IRA.

This only works if your plan specifically permits both after-tax contributions and one of those conversion paths, so call your HR department or plan administrator before assuming it's available. Not every plan offers it, but for the people it fits, it's one of the more overlooked ways to build tax-free savings.

4. Stack a backdoor Roth IRA on top of your mega backdoor Roth

If you've just read about the mega backdoor Roth and assumed you've now used up your Roth options for the year, you haven't.

A backdoor Roth IRA lets high earners get money into a Roth IRA even after they've been phased out of contributing directly. You contribute to a traditional IRA on a non-deductible basis, then convert it to Roth shortly after. For 2026, the IRA contribution limit is $7,500, plus $1,100 more if you're 50 or older.

Here's the part I get asked about constantly: Your IRA contribution limit is separate from the limits that apply to your workplace plan. If you're otherwise eligible for each strategy, you can fund a backdoor Roth IRA and execute a mega backdoor Roth in the same year.

The one thing that can complicate a backdoor Roth IRA is the IRS's pro-rata rule, which requires you to consider all of your traditional, SEP and SIMPLE IRA balances together when calculating the tax on a conversion.

The calculation looks at the year-end value of all of those IRAs, not just the account holding your nondeductible contribution.

A mega backdoor Roth, whether converted inside your workplace plan or rolled directly to a Roth IRA, generally doesn't count toward those IRA balances.

If you don't have pretax traditional, SEP or SIMPLE IRA money sitting around, the backdoor Roth IRA stays clean from a tax standpoint. Either strategy can have tax consequences, so confirm the details with your CPA before you move any money.

5. Don't underestimate a plain taxable brokerage account

After three accounts built around tax breaks and rules, a taxable brokerage account can feel almost boring by comparison. But it doesn't get nearly enough credit.

There's no statutory contribution limit, no income cap and no early withdrawal penalty. You can invest as much as you want and sell investments or withdraw cash whenever you want, although selling appreciated investments can create a taxable gain.

That flexibility is rare among the accounts on this list, especially if you're hoping to retire before 59½ and need a bridge to cover expenses before your retirement accounts are penalty-free.

The tax treatment isn't as generous as a Roth or an HSA, but it's still better than most people assume. Long-term capital gains and qualified dividends get preferential rates, not your ordinary income rate.

For 2026, the 0% federal long-term capital gains bracket for married couples filing jointly extends through $98,900 of taxable income. Ordinary taxable income uses that bracket first, so only gains that fall within the remaining space qualify for the 0% rate.

There's also tax-loss harvesting: Selling an investment at a loss to offset capital gains and potentially up to $3,000 of ordinary income, subject to rules such as the wash-sale rule, something you simply can't do inside a 401(k) or IRA.

I've worked with many who treat their brokerage account as an afterthought, something they'll "get to eventually" once the tax-advantaged accounts are maxed. Fund it on purpose instead, particularly if flexibility and access before retirement age matter to your plan.

These add up faster than you'd think

Some of these moves require additional savings, while others change the tax treatment or destination of money you're already saving. The goal is to direct each additional dollar toward the account that best supports your plan.

That distinction compounds. A few percentage points redirected toward a Roth or an HSA in your 50s can mean a different tax bill in your 70s and 80s.

I've watched people run these strategies side by side and see for themselves how much of a difference the right combination makes over 20 or 30 years.

You don't need to implement all five at once. Start by identifying which strategies are available to you, then prioritize the one that best fits your tax situation, savings capacity and need for flexibility.

Before you know it, you will be on your way to a confident retirement knowing that you have optimized your savings.

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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.

From meal planning and research to fact-checking, copy editing and document summarization, artificial intelligence (AI) is rapidly altering the contours of daily life, becoming as indispensable as a basic internet connection.

But AI is not a magic wand. It's a tool that, when used responsibly, can improve efficiency and fill in specific knowledge gaps.

Within financial services, AI is becoming a bigger factor, both at the adviser level and among consumers, who have more access than ever to educational tools to support planning and investing.

In some ways, this access can be beneficial to consumers and participants, giving them unprecedented access to resources that help them be more involved and invested in their financial planning.

1. Everyday efficiency

I'm probably not the only person who uses ChatGPT to help with shopping and meal planning. With a single prompt, I have a ready-made grocery list and budget-friendly dinner plan built around my specific tastes and dietary guidelines.

Could I achieve the same thing by flipping through cookbooks or doing a Google search? Probably. But it would take a lot longer to sift through all the recipes that don't meet my criteria.

In finance, AI can serve a similar purpose, helping potential investors to get the lay of the land. Someone can use it to compare two investment options or learn about complementary opportunities.

It's a low-stakes way to familiarize yourself with the dizzying array of investment options.

2. Learning and definitions

AI is a great learning tool. At a basic level, you can use Claude or ChatGPT to provide definitions for common terminology: What is a stock? What is a bond?

Of course, Google does the same thing, but AI does it more efficiently and effectively.

3. Fact-checking professionals

Though AI can't replace a professional, it is effective for fact-checking, much in the way that patients can consult with another doctor to get a second opinion.

Humans are fallible (though they're less prone to errors than their robotic cohorts), so it's always healthy to do some quick fact-checking

However, when it comes to your finances, AI is not, and can't be, a substitute for professional expertise. It can't replace the empathy and connection that another human can provide.

4. Bad prompts produce errors

Ever heard of "garbage in, garbage out"? If you give AI a confusing prompt, you're likely to get a muddled answer.

I experienced this firsthand during planning for a group bike trip. As an avid cyclist, I turned to my trusty AI assistant to help plan a multiday bike route for me and some of my colleagues.

Apparently, something in my prompt was confusing, and on the last day, instead of setting out on a 30-mile ride, we discovered that it was, in fact, an 80-mile route.

I learned a hard lesson: Clarity is everything, and even small errors can lead to mistakes that you might not catch until it's too late.

5. Easily confused

AI is not great at juggling multiple thoughts at once. Specifically, it can conflate similar-sounding but different concepts such as a separately managed account vs an adviser-managed account, or a retirement-plan brokerage window vs a retail-brokerage account.

While these distinctions might seem small to the layperson, they're important because they involve different fee structures, governance and access rules. AI can slip up when multiple concepts converge, even if it gets them right individually.

6. Bias and data limitations

Studies have shown that large language models (LLMs) have consistently demonstrated bias across categories such as gender, race and age. While this is a discrimination problem, it also contributes to functional errors as diversity of thought leads to better, more accurate outputs.

Even in a perfect world, Claude or ChatGPT could never replace your doctor, lawyer or financial adviser. People want to look across the table at someone they trust when discussing critical issues such as their health and finances.

They also want accountability. A couple of years ago, I started working with a running coach. If you're not an avid runner, the idea of a coach might seem ridiculous. Running is just putting one foot in front of the other, right?

Well, in addition to helping with training, sleep and diet, my coach keeps me accountable. I pay for a coach not because I don't know how to run, but because someone showing up to my house in the morning keeps me accountable. I won't skip a run if I know Jeremy is going to be there. AI is not going to solve that issue.

Likewise, the value of the adviser-client relationship is accountability, trust and follow-through. As an investor, AI can be a useful tool to help you become more efficient and better informed, but it will never be a substitute for your financial adviser. Supplement, don't supplant.

You're likely not the only one using AI. Your financial adviser might use it, too, which is OK, even smart, but you're entitled to know how they're using it and make that part of the decision-making process.

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