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

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

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

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

Here's my attempt to do that.

Age 50: The catch-up window opens

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

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

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

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

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

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

Two useful planning tools arrive at age 55.

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

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

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

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

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

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

Age 59½: Penalty-free withdrawals begin

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

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

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

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

Age 60: A different door for surviving spouses

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

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

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

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

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

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

Ages 60 to 63: The super catch-up

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

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

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

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

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

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

Age 62: Early Social Security

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

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

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

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

Age 63: Watch your income for Medicare's sake

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

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

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

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

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

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

Age 64 and 9 months: Start your Medicare clock

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

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

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

Age 65: Medicare begins, HSA contributions end

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

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

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

Age 70½: Qualified charitable distributions

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

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

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

Ages 73 to 75: RMDs

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

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

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

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

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

These milestones don't exist in isolation

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

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

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

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

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

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

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

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

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

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

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

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

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

The conversation that gets skipped

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

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

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

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

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

Money didn't break that family. Silence did.

What I ask families to do instead

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

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

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

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

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

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

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

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

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

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

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

Where to start

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

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

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

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

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• Think You're Too Busy to Do an Estate Plan? In 3 Hours (Seriously), You Could Save Your Heirs Months (or Years) of Stress and Heartache

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

You faithfully pay your recurring bills (such as utilities and insurance) with automatic payments set up from your credit card to simplify your life. Shouldn't you take advantage of that card usage beyond convenience?

Credit cards can make life easier and, when properly managed, can certainly provide some impressive perks. From purchase protection to rental car coverage, the right credit card can save you money when used responsibly.

With the right strategy and a rewards program, credit card spending can be turned into free travel in the form of flights, hotel rooms and more. This is how to do it — and how I've done it, as a wealth adviser and financial planner with more than two decades of experience.

Get to know your credit card rewards

If you already have a rewards card, you might not fully understand the rewards program and potential benefits. Start by auditing your rewards program to better understand how you earn rewards and how you can redeem them.

Whether it's free travel, travel upgrades or cash back, rewards can often outweigh the cost of the annual fee that most rewards cards have.

For example, my wife and I used our Delta Air Lines points to cover the cost of our plane tickets for a vacation in Aruba, then used our Platinum Medallion status to get us a better baggage allowance, Comfort Plus seating on the aircraft and a hot breakfast at the airport.

Had we not understood how to use our points effectively, we would have paid for these expenses out of our own pockets.

Understanding the rewards program is half the battle, as we were able to strategize to further utilize points on our trip using our American Express card, which we used to cover our hotel stay, breakfast each morning, a spa visit, discounted beach hut rental and an additional $50 credit on our American Express bill.

Choosing the right rewards card

If you don't have a rewards card, shop around for one from which you'll get the most benefit. Start with cards offering perks you know you'll use.

For example, if you take frequent trips to visit family and typically use the same airline, you might want to start with a rewards card that is specific to that airline or at least to travel.

Likewise, if you have a cause that's near and dear to your heart, you might want to investigate a card that gives rewards in the form of charitable donations.

Even if you're getting fantastic rewards, you should still consider the card's terms and conditions. Will you earn enough rewards to justify the annual fee? If the fee exceeds the perks you'll receive, or if the interest rate is significantly higher than what other cards offer, it might not be worth it overall.

If you already have credit cards with rewards, examine how you might combine or transfer your rewards as I did for my family's trip to Aruba to get all available benefits.

According to the Consumer Financial Protection Bureau, billions of dollars of credit card rewards go unused annually, demonstrating how important it is to understand and utilize your rewards instead of allowing them to expire.

Rewards are a perk, not a purpose

Research suggests that people tend to spend more when using credit cards but adding reward points to the mix makes some people spend more to earn more.

A Bankrate survey revealed that around 70% of credit cardholders carrying a balance continue to use the card in an effort to earn more rewards. Even though they're paying interest charges, they continue to add to the balance, because they're trying to rack up more points or cash back.

Notably, that same survey revealed that more than half of credit cardholders carrying a balance say that it's become harder to pay off credit card debt in the last year.

Functional magnetic resonance (fMRI) studies conducted by MIT Sloan further revealed that credit cards exploit the reward networks in the brain, providing a signal of pleasure when purchases are made using a card.

Combine that with the gamification of cards through earning or unlocking rewards, and it's easy to see how reward programs might encourage people to spend more than they should.

To be clear, when I talk about using credit card rewards to earn perks such as free travel, I'm not talking to cardholders who struggle to make their monthly payments.

I suggest taking advantage of credit card rewards if you successfully manage your cards and would like to get something extra out of your usage.

Use credit card reward programs as a tool to earn the perks you want, not as a justification to spend more.

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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.

Financial conversations can be difficult and uncomfortable, leading many Americans to neglect them altogether.

Whether it's debt, retirement, investing or estate planning, more than 80% of people intentionally avoid discussing financial topics with family and friends, according to a report from the Consumer Financial Protection Bureau.

While skipping these conversations may seem harmless, the silence isn't neutral. Delaying these discussions often means delaying important financial decisions, too. As time passes, those missed opportunities can compound, sometimes creating more financial stress than if they had been addressed from the beginning.

We all procrastinate from time to time, especially when confronting something that takes us out of our comfort zone. But avoiding it doesn't make it go away.

The same is true when it comes to your finances. Telling yourself you'll make a plan to pay off debt next month or wait until you're making "enough" money to start investing may bring you peace in the moment, but those decisions carry consequences that continue to grow the longer you wait to deal with them.

Interest continues to accumulate on debt, investment opportunities get missed, and conversations can feel more uncomfortable the longer you put them off. That's because financial decisions tend to build on one another.

Delaying one conversation or decision leads to another, making it harder and harder to catch up down the line. What may have started as a small challenge can snowball into a much larger issue over time.

So why are people so afraid to confront these issues head on?

For many of us, financial avoidance isn't a result of lacking motivation, but rather, lacking confidence. If you don't understand the basics of credit, debt management and investing, it's easy to make mistakes in the very beginning.

This can lead to feelings of embarrassment or the fear of making another wrong decision, causing many people to walk away from the subject entirely.

However, avoiding the problem doesn't make it go away. Oftentimes, it makes the problem more prevalent in your life.

The less involved you are in your finances, the less confident you'll feel when making future decisions, creating a cycle that can be hard to break.

Aside from feelings of embarrassment, the CFPB also found 51% of Americans believe financial matters should stay private. And for many, this means managing financial affairs alone.

In my experience, many clients mistakenly equate financial independence with self-reliance. They assume asking for guidance or discussing their situation with someone they trust means they're less capable of managing their money when that's not the case.

Financial independence and financial isolation are two separate things.

Being financially independent doesn't mean you have to figure out everything on your own. It's about taking ownership of your financial future. Seeking advice from trusted family members or financial professionals doesn't mean you have to lose your independence. It can actually build accountability, give you a new perspective or provide you with more information to make a more informed decision.

To begin building that support system, ask yourself:

Who are the trusted people in my life?

Think about family members, friends or mentors who've demonstrated responsible financial habits and can share their perspective on important financial decisions.

Am I working with a financial professional who can provide guidance when things get complex?

Whether it's retirement planning, learning how to invest or developing a plan to pay off debt, working with a qualified professional who can act in your best interest, can give you the tools needed to make the most informed decision with confidence.

Do I communicate the current financial situation with my loved ones on a regular basis?

Scheduling periodic check-ins with your spouse or other trusted family members can help you stay accountable, discuss future goals or identify areas for improvement.

Am I willing to continue learning and ask for help when needed?

Financial literacy isn't learned overnight. Like anything else, it's a skill that takes time and effort to develop. Building and maintaining financial independence is achieved with the help of a trusted team.

Having a trusted support system gives you the opportunity to ask questions, gain confidence and ultimately address concerns before they get worse. Often, those conversations are what help people transition from financial avoidance to financial independence.

Making the choice to avoid your finances can compound just as powerfully as choosing to take action. The only difference is that one builds opportunity, while the other creates obstacles.

Your financial future is shaped by your decisions. Starting the conversation, asking questions and building a reliable support system are choices that will help move you closer to true financial independence.

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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 1031 investors — especially those who are nearing retirement — don't understand the full breadth of replacement options available to them.

Most of them are in a similar spot: They own a rental or a small commercial building, and they're worn out from the day-to-day management. They're ready to sip piña coladas on the beach, not answer phone calls or text messages about how the plumbing stopped working or what the pet fee will be if their tenant gets a fourth cat.

In 2024, 38% of landlords said property upkeep is one of their biggest issues, and in 2026, a survey of 4,055 independent landlords showed that ownership costs rose for 74.4% of them.

That paints a clear picture of collective landlord psychology: They're sick of maintenance, and to make matters worse, prices keep rising.

Since the 1031 exchange is such a good option for deferring taxes, most landlords are heavily incentivized to keep the money working for them in real estate (and that's especially true for retirees who are investing for cash flow).

So, what are their options? Most investors think there are only two:

• Go passive through a Delaware statutory trust (DST)
• Stay in control by buying another building and doing the work all over again

Completely passive with lower returns or potentially stroke-inducing total control?

In reality, this is a false dichotomy.

The actual range of options is much wider.

Once you sell, you have 45 days to formally identify a replacement property and 180 days to close. That window is short — and the IRS is not lenient at all about missing deadlines, so let's get started.

The full range of options, from most work to least

Another active property. This is the default option. And, frankly, for some sophisticated investors who have the time and patience for it, it's the right answer.

You trade into another rental, a multitenant building or a value-add project, and you keep full control along with full responsibility:

• Tenants
• Repairs
• Vacancies
• Taxes
• Insurance

If the reason for the exchange was the work itself, this puts you back where you started, usually with a larger asset. Not ideal for someone nearing retirement.

Tenancy in common (TIC). A TIC lets several investors hold direct, fractional title to a single property. You keep the standing of a direct owner, which is more control than a fractional trust interest gives you, but decisions generally require coordination among the other owners, and financing is more complicated because the lender underwrites the group.

It sits in the middle, and it has become less common than it once was.

A Delaware statutory trust. With a DST, you buy a fractional beneficial interest in a professionally managed, institutional-grade asset, and a sponsor runs everything.

The appeal is convenience: A DST can close in three to five business days, minimums are low, and you can spread proceeds across several of them for diversification.

Those are meaningful advantages when the 45-day clock is tight or the remaining balance to place is small.

The trade-off, of course, is control.

In order to qualify for a 1031, a DST has to follow a set of IRS rules (often called the seven deadly sins): Among them, the trust:

• Cannot take on new financing
• Cannot sign new leases
• Cannot make major capital improvements
• Cannot reinvest sale proceeds

Investors get no vote on when the property sells, and because proceeds cannot be redeployed inside the trust, the sponsor's exit sets the timing of your next exchange.

Fees are the other consideration, since front-end fees on DST offerings commonly run 10% to 15% and are disclosed inside a lengthy private placement memorandum.

For frustrated, burnt-out landlords, that seems like it's an easy trade … but it's not the only option available to you if you want to move from being fully active to being mostly passive.

The lesser-known middle-ground options

Single tenant NNN (triple net). While this is still technically 100% ownership, it stands out because it shifts the maintenance responsibilities onto the tenant. With a NNN property, you hold title outright and lease the building to a single tenant, usually on a long 10- to 15-plus-year lease, and the tenant pays the three nets:

• Property taxes
• Insurance
• Maintenance

You keep control (the hold, the sale and the timing of your own exchange), and the operating burden shifts to the tenant, so your responsibilities as owner are low.

The pricing behaves a lot like fixed income: Single tenant net lease assets traded around a 6.80% cap rate as of the first quarter of 2026, and the yield tracks the tenant's credit and the remaining lease term more than the building itself.

Absolute NNN. This is a triple net lease taken to its furthest point. The short version: The tenant carries everything, including the roof and structure, which is not always true of all NNN leases.

A REIT. Worth naming mostly to correct a common assumption: You cannot complete a 1031 exchange directly into REIT shares, because a share of a trust is not like-kind to real property.

There is an indirect path called an UPREIT (a DST interest can later be contributed to a REIT operating partnership through a Section 721 exchange), but that is effectively a one-way door out of 1031 treatment, since you generally cannot exchange out again afterward.

There are also plenty of hidden risks associated with this strategy.

Weighing your options: Two questions to answer

In evaluating these options, you need to answer two questions:

• How much control do you want to keep?
• How much of the work are you willing to do yourself?

A DST gives up control almost entirely in exchange for simplicity, which suits an investor who just wants it all to be over with.

A single tenant absolute NNN property keeps title, control and exchange timing in your hands while keeping the work low, which suits an investor who was tired of the job rather than tired of owning. Another active building keeps everything: Control and work alike.

Each is a legitimate answer to a different set of priorities.

Whatever you land on, three habits pay off early: Match the structure to whichever of those priorities is most important to you, read the underlying documents (the lease on a net lease deal, the private placement memorandum on a trust) and make sure to cross your t's and dot your i's. The 45-day clock rewards the investors who have thought it through before they sell.

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.

Minority-owned businesses are one of the fastest-growing segments of the U.S. economy.

The U.S. Census Bureau puts the number at an estimated 1.3 million.

And according to the 2024 Minority Businesses Economic Impact Report, they generate nearly $600 billion in annual economic output while posting year-over-year gains in production, employment and wages.

Yet for many founders, the greatest challenge comes after building the business, when it's time to sell. As research from Brookings Metro highlights, minority-owned businesses face unequal access to capital.

When that's coupled with unequal access to experienced advisers and sophisticated legal and financial resources, it means many otherwise successful businesses reach the sale process without the documentation, governance or operational infrastructure buyers expect.

The result can be lower valuations, prolonged negotiations or deals that never make it to the closing table.

With thoughtful planning and preparation, however, founders can address many of the common obstacles before a buyer even begins due diligence, positioning themselves to protect the value they've spent years creating.

Assess your business

A U.S. Department of Commerce study found that minority-owned firms are more likely to be denied loans, pay higher interest rates when they do secure financing and are less likely to apply for credit because they expect to be turned away.

Minority-owned companies typically have fewer banking relationships and collateral options than their non-minority counterparts.

These barriers do not disappear at the point of sale. They can affect how a business is valued, how a deal is structured and who shows up at the negotiating table.

For any business owner, preparing for a sale may be the first time they have navigated a transaction of such a size and complexity. Compounding the overwhelm for many minority founders is the fact that not all business owners have equal access to the legal, financial and advisory networks that help companies prepare for an eventual exit.

As a result, some business owners enter the sale process without fully appreciating the level of scrutiny buyers will apply to their records, contracts, compliance practices and financial reporting.

One of the most important things a business owner can do before pursuing a sale is conduct a thorough internal audit. While many owners focus on financial performance, buyers go beyond revenue and profitability. They want reassurance that the business is well organized, compliant and free of surprises that could delay or derail a transaction.

Where to start

Start with your corporate records. Formation documents, operating agreements, bylaws, shareholder agreements, capitalization tables and board records should be complete, accurate and readily accessible.

Buyers will also examine customer and vendor contracts, loan agreements, liens and property leases.

Next, review legal and regulatory risks. Pending litigation, environmental matters, product liability claims, recalls and other compliance issues should be identified early.

Financial statements and tax returns for at least the previous four years should be organized, prepared in accordance with generally accepted accounting principles where possible, and reviewed or audited by a reputable CPA.

Intellectual property is another critical area. Trade secrets, trademarks, patents, copyrights and related registrations should be documented, along with confidentiality agreements for employees, contractors and third parties.

Businesses should also confirm compliance with applicable data privacy laws.

On the employment side, verify worker classifications, ensure I-9 documentation is complete, identify any pending employment claims and review employee benefit plans for legal compliance.

Finally, organize information on your key customer and vendor relationships, including revenue concentrations over the past 12 months. Any transactions involving affiliated entities or related parties should also be clearly documented.

The goal is to identify and resolve issues before a buyer discovers them. The more organized and transparent your business appears during due diligence, the more likely the transaction is to proceed efficiently and on favorable terms.

Close the gaps before a buyer finds them

Once you've completed your internal audit, expect to find gaps. Nearly every business does. The difference between a smooth transaction and a difficult one often comes down to whether those issues are addressed before the company goes to market.

Buyers are trained to identify risk. When they uncover missing documentation, unresolved compliance issues or operational weaknesses during diligence, those findings frequently become negotiating leverage.

What might seem like an administrative oversight can quickly translate into a lower purchase price, additional indemnification obligations or delays in closing.

Corporate records should be brought up to date, whether that means preparing written shareholder and/or director consents to ratify corporate actions or correcting deficiencies in stock issuances.

Outstanding liens that should have been released should be formally terminated, and any informal arrangements between related parties should be documented through written agreements.

Financial records deserve the same attention. Incomplete or inaccurate financial statements should be reviewed and corrected with the assistance of a qualified CPA. Intellectual property should be evaluated to determine whether trademarks, patents, copyrights or trade secrets require additional protection.

Businesses that rely on proprietary information should ensure employees and contractors have executed appropriate confidentiality and invention assignment agreements.

Ultimately, buyers use diligence to assess both risk and value. Companies that present organized records, documented processes and resolved compliance issues signal that the business is well managed and ready for transition.

That preparation can help support valuation, accelerate the transaction process and reduce the likelihood of post-closing disputes or liability.

Start building your team 12 to 24 months out

Minority-owned businesses face challenges that stem from systemic discrimination. That is one of the reasons why it is essential to assemble your team of trusted professional advisers 12 to 24 months before you plan to go to market.

Your attorneys, accountants, financial advisers and investment bankers will work together to help you address gaps, position the business and its owners favorably and work through some of these structural obstacles.

Beyond your professional team, lean into community networks. Minority business organizations, industry events and peer groups can provide introductions to potential buyers, capital sources and strategic partners that may not be visible through traditional channels.

Consider seeking investors focused on diversity or exploring alternative funding sources, such as SBA programs and crowdfunding platforms.

A stronger top line and a more diversified customer base make a business more attractive to buyers. If you have not already, consider applying for minority business certification, which can qualify your company for certain government and corporate contracts and add another proof point for prospective acquirers.

Preparation is what separates a closed deal from a missed opportunity

The minority business community is building something remarkable. The growth numbers are real, the economic impact is significant and the entrepreneurial ambition behind these companies is clear.

However, too many founders leave value on the table because they did not prepare for the exit with the same rigor they brought to building the business.

Clean documentation, clear organizational structure, resolved compliance issues and a strong advisory team are what separate a deal that closes at full value from one that falls apart in due diligence.

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• For Business Owners, Estate and Exit Planning Join Forces

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.

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

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

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

From gatekeeping to empowerment

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

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

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

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

The promise — and limits — of artificial intelligence

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

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

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

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

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

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

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

Beyond the headline technology

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

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

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

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

Where human judgment remains irreplaceable

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

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

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

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

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

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

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

A more useful question

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

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

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

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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.

My wife and I are expecting our third child later this year. When a client is expecting, I generally advise them to start thinking about their baby's financial future right away.

Trump Accounts allow parents to open an investment account on behalf of any children under age 18 who are U.S. citizens. If the child is born from 2025 through 2028, the government will deposit $1,000 into the account for your child.

Thanks to philanthropic donations, an extra $250 will be deposited into the account if you live in a ZIP code with a median income below $150,000.

If your child qualifies for that deposit, opening a Trump Account is a no-brainer; it's free money!

Where things get less clear is when considering whether you should contribute your own money to the accounts. As a financial adviser at Burns Estate Planning & Wealth Advisors and an expectant father considering the best path forward for my own child, I see both pros and cons.

What are the benefits of contributing to a Trump Account?

Contributing to a Trump Account can significantly increase your child's nest egg. The federal government estimates that if you simply take the $1,000 deposit from the government, that deposit will turn into $6,000 by the time your child is 18.

By contributing just $250 per year, your child would have an estimated $19,000. Clearly, contributing to the Trump Account — even a small amount — will have a significant impact on the amount of money your child ends up with.

While the Trump Account is touted as a retirement account for your kid, your child can also make withdrawals without penalty much earlier for qualifying reasons, such as paying for college or buying their first home.

Those withdrawals could be subject to restrictions and would be taxed at ordinary income tax rates.

Employers can make contributions up to $2,500 per year into the account as well, making it a potentially attractive employee benefit.

What are the downsides of contributing to a Trump Account?

If you're considering making contributions to a Trump Account for education for your child, you should first ask yourself: Why would you use a Trump Account for education when a 529 plan grows tax-free and is tax-free on withdrawal?

The nest egg your child has after 18 years of contributions to a Trump Account could be significant. However, that's not due to any special property of the Trump Account itself; it's simply the result of compound interest over time, which you would also enjoy with other investment accounts like a 529.

Unlike with a 529, your children will have to pay taxes on the growth of money in a Trump Account when they withdraw it. I often recommend that my clients convert their IRA to a Roth IRA because, while you pay taxes on the contributions or conversions to a Roth, you don't pay taxes when you withdraw the money.

Trump Account contributions are non-tax-deductible, like a Roth IRA, but the entire amount is taxable upon distribution, like a traditional IRA. That double taxation is not as tax-efficient as other options.

When my baby is born later this year, I'll definitely open a Trump Account to take advantage of the $1,000 free deposit, but I'll also open a 529 account and contribute my own money to that, because withdrawals will be more tax-advantaged for my child.

That isn't to say this is the right move for everyone with a newborn. A Trump Account is a tool, but, as with any other investment, it's not a one-size-fits-all solution.

If the goal is to save for higher education, it may make more sense to use a 529 plan, based on the tax laws that apply to distributions compared to a Trump Account.

It will likely be less common to use a Trump Account to save for your children's retirement, as most children are beneficiaries of their parents' estate to begin with.

However, if getting a jump-start on your children's retirement accounts is the goal, a Trump Account would likely make more sense.

It's important to work with your financial adviser for advice that takes into account your unique circumstances before deciding how to set your children up for a strong financial future.

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

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

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

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

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

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

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

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

Are there other strategies they can put into play?

To reject or not

There are things to mull over here.

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

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

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

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

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

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

A case study

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

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

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

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

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

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

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

If necessary, seek assistance

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

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

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

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

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

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

Ronnie Blair contributed to this article.

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

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

By the time September arrives, taxes are probably the last thing on your mind.

Summer is winding down, spring filing is behind you, and the third-quarter estimated payment due on September 15 feels like a formality.

For most business owners, it is whatever they paid last quarter, sent off without much thought.

That habit is where the money leaks.

By September, you can see most of the year:

• Two-thirds of your income is already on the books
• You know whether the year is running ahead of plan or behind it
• The spring projection your estimates were built on is probably out of date

The Q3 payment is a great opportunity to true up before the year closes. Skipping that recalculation is one of the most common and most avoidable mistakes I see.

I'm a CPA and head of Tax at Gelt, and here is what the conversation with your own CPA should cover before the deadline.

Recalculate the number — don't repeat it

Most business owners pay their Q3 estimate by copying the Q2 figure forward. That works only if nothing changed, and for a growing business, something almost always has.

A strong sales quarter, a large client payment, a capital gain or a major asset purchase can all push your income far from what you projected in April. If your estimates are still built on that spring number, you are likely to be underpaying, or worse, overpaying, and not find out for months to come.

The fix is to rerun the projection with actual numbers through August:

• Pull your year-to-date income and compare it to the figure your estimates were based on
• Add any one-time events you're still expecting that may not have been in the original plan
• Recalculate what you owe for the full year, then check it against what you have paid so far

As a CPA, I'd recommend doing this in early September, not on September 14. If the review turns up a shortfall, you want time to act on it.

Know the number that protects you

You do not have to predict your tax bill perfectly to avoid a penalty. The IRS gives you a safe harbor, and hitting it is the goal.

You generally avoid an underpayment penalty if you pay the smaller of two amounts:

• 90% of what you owe this year
• Or 100% of what you owed last year

If your adjusted gross income last year was over $150,000, that second figure rises to 110%.

A few numbers worth keeping in mind:

• You face a penalty only if you are short by $1,000 or more after withholding and credits
• The penalty is really interest, currently 7% a year compounded daily, charged on what you underpaid
• It runs from each missed deadline until you pay, so a Q3 shortfall keeps costing you until you close it

For most business owners, the prior-year safe harbor is the one to lean on, because it is a known, fixed number. You already know last year's tax. Paying 100%, or 110% if you are over the income threshold, across four even installments is the cleanest way to stay protected when this year's income is hard to pin down.

Use withholding as a late-year fix

If your September review turns up a gap, there is a tool most business owners overlook.

Estimated payments count only for the quarter you actually make them. Withholding works differently. The IRS treats withholding as if it were paid evenly across all four quarters, even if it all came out of a December paycheck.

If you or a spouse has W-2 income, increasing that withholding late in the year can patch an earlier shortfall in a way a catch-up estimated payment cannot.

There is also relief if your income is genuinely uneven. The annualized income installment method lets you match your payments to when you actually earned the money, so a large third or fourth quarter is not treated as income you should have paid tax on back in April.

If most of your income lands later in the year, this can lower or even erase a penalty. It takes more documentation, so it is a conversation to have with your CPA rather than a box to check on your own.

At Gelt, we treat the September estimate as a planning moment, not just a payment. It is the point where the year is finally clear enough to act on, and there is still time left to act.

Make September 15 a checkpoint, not just a payment

What makes this deadline matter, beyond the payment itself, is what it sets up. A wrong Q3 estimate does not stay contained in Q3. It follows you into the final January 15 installment and into the bill you settle in April.

When you recalculate now, you get more than a correct payment. You get an early read on where the year will land, and that gives you room to make real moves before December, such as adjusting your compensation, timing a large purchase, funding a retirement plan or accelerating a deduction.

So before September 15, ask your CPA three questions:

• What do I actually owe for the year based on income through August?
• Am I on track to hit my safe harbor?
• If I am short, do I fix it with an estimated payment, with withholding or by annualizing my income?

Those three questions turn a routine deadline into the most useful tax checkpoint of your year.

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

When you move — whether upgrading, relocating for work or inheriting a family property — you're often left with a deceptively complex decision: Should you keep the home and rent it or sell and move on?

At its core, the rent-vs-sell decision comes down to a fundamental trade-off.

• Renting the property offers the potential for ongoing income and continued exposure to long-term appreciation. It could also provide flexibility, whether as a future residence, a home for family members or a legacy asset.
• Selling the home delivers immediate liquidity, simplifies your financial life and allows you to redeploy capital more efficiently.

Neither approach is inherently superior; the right decision depends on which trade-offs align with your broader financial plan.

A logical starting point is to evaluate the potential return of the property, but that requires defining return correctly. Many homeowners focus on gross rental income and quickly conclude that the property is cash flow positive.

In reality, what matters is net rental yield after accounting for all operating costs, including vacancy, maintenance, property taxes, insurance and management fees if applicable. Once these costs are included, the expected return is often significantly lower than initial assumptions.

Consider a simple illustration. A home valued at $600,000 might rent for $2,500 per month, generating $30,000 annually in gross income. After factoring in vacancy, repairs, insurance, property taxes and potential management costs, the net cash flow might fall in the range of $16,000 to $18,000 per year, implying a net yield of roughly 3%.

By contrast, selling the property and investing $600,000 in a diversified portfolio earning 5% annually would produce about $30,000 per year before taxes.

This comparison is not to suggest that one outcome is inherently better, but rather to highlight that rental property should be evaluated as a net return on capital, not simply as an income stream.

Look at the entire financial impact

Beyond return, risk and portfolio concentration deserve careful consideration. Many homeowners who keep a former residence while purchasing a new one end up with a significant portion of their net worth tied up in residential real estate, often within a single geographic market.

Selling reduces that concentration and converts an illiquid asset into liquid capital that can be diversified or used to fund other financial priorities. Renting preserves the exposure to real estate, which might provide an inflation hedge and long-term appreciation potential, but it also limits liquidity and flexibility.

Taxes are another area in which the decision becomes more nuanced, and many homeowners underestimate the long-term implications.

One of the most valuable tax benefits available to homeowners is the capital gains exclusion under Internal Revenue Code Section 121. If you meet the ownership and use requirements — generally, having lived in the home as a primary residence for at least two of the last five years — you can exclude up to $250,000 of gain if single or $500,000 if married filing jointly.

This benefit can meaningfully reduce or eliminate the tax cost of selling.

That exclusion is tied to timing. Many homeowners have a limited window after moving out during which they can rent the property and still qualify for the exclusion if they sell within the applicable five-year lookback period.

This creates a viable hybrid strategy in some cases: Rent the home temporarily while preserving the option to sell tax-efficiently.

About depreciation

Once a home is converted to a rental, depreciation becomes a key factor. The IRS generally allows the building portion of a rental property to be depreciated over 27.5 years, creating annual deductions that can reduce taxable income.

While this can be a meaningful short-term tax benefit, it also introduces a future cost. When the property is ultimately sold, the portion of gain attributable to depreciation is subject to what's referred to as unrecaptured Section 1250 gain, which is taxed at rates of up to 25%.

A simple example illustrates the point. Assume that $400,000 of a home's value is attributed to the building and the property is rented for five years. Straight-line depreciation over that period would total about $72,700.

At the time of sale, that amount is generally subject to tax at a rate of up to 25%, resulting in a potential federal tax liability of roughly $18,000 on that portion alone.

Perhaps more important, this depreciation-related gain typically can't be excluded under the home-sale exclusion, even if other portions of the gain qualify. For many homeowners, this creates an unexpected tax bill that offsets some of the perceived benefits of renting.

Another misunderstood area

Rental losses are another area that's often misunderstood. While depreciation and other expenses can create tax losses on paper, rental real estate is generally considered a passive activity for tax purposes. As a result, those losses typically can't offset wages or other active income.

There is a limited exception that might allow up to $25,000 of rental losses to offset ordinary income for certain taxpayers who actively participate in the property, but this benefit phases out as income increases.

Losses that can't be used currently are generally carried forward, which means the tax benefit might be delayed rather than eliminated.

Consider the big picture

While financial and tax considerations are central to the decision, don't overlook the lifestyle component. Even with professional management, the owner remains responsible for key decisions, oversight and the financial consequences of vacancies and repairs.

Cash flow isn't guaranteed, and expenses tend to be unpredictable rather than smooth. A useful way to frame this consideration is to ask whether you're comfortable taking on what is effectively a part-time role as a property owner, particularly if you're approaching or already in retirement.

Given the range of factors involved, a structured decision framework can help bring clarity. The most important questions tend to be straightforward:

• Do you need the proceeds from a sale to fund your next financial goal, such as purchasing a new home or strengthening your balance sheet?
• Are you willing to take on the responsibilities of owning and managing a rental property, either directly or through a third party?
• What is the realistic net return after all expenses, rather than the optimistic projection based on gross rent?
• How important are simplicity and flexibility at this stage of your life?

Both renting and selling can be appropriate and financially sound decisions when aligned with broader goals.

• Renting can provide income and long-term appreciation potential, but it introduces complexity, variability and future tax considerations that are often underestimated.
• Selling offers immediate liquidity, simplicity and the opportunity to lock in favorable tax treatment, but it means giving up future real estate exposure and potential rental income.

Content in this material is for general information only and is not intended to provide individualized tax or legal advice. Discuss your specific situation with a qualified tax or legal professional.

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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 are struggling to find the right balancing act in the current market environment.

U.S. equity markets continue pushing to new all-time highs despite persistent inflation, elevated valuations, geopolitical uncertainty and higher interest rates.

These risks can make investors uncomfortable as markets rise and fall — sometimes in the same trading session.

But history suggests that all-time highs alone aren't a reason to step away, and new ETFs that help investors stay invested through highs and lows are growing in popularity.

Markets rise

New market highs tend to cluster together during prolonged bull markets.

From 1989 to 2000, the S&P 500 reached a new all-time high roughly every nine trading days. From 2013 to 2022, it was every eight trading days.

In 2026, it has hit a new all-time high over 20 times as of June — roughly once every five to six days.

Still, many investors have chosen the perceived safety of cash. According to the Investment Company Institute, assets in money market funds stood at $7.9 trillion as of July 22.

These investors have missed out on significant upside and may continue to do so. But at the same time, they cannot afford to ignore the downside risks markets currently present.

Markets also decline

Significant market declines can delay retirement, force spending changes or derail major goals like buying a home or affording higher education for children.

Declines can also undergo long periods: Look at the NASDAQ-100. It took nearly 15 years (March 20, 2000, to April 23, 2015) to fully recover from its prior peak after the tech bubble.

Many investors don't have that kind of recovery horizon, creating tension between participating in market growth and managing downside risk. It's a key challenge, but remaining on the sidelines doesn't have to be the answer.

This is where defined outcome ETFs, designed to help investors navigate unease and return to the market, can be one solution.

What are defined outcome ETFs?

Defined outcome ETFs seek to provide investors with equity market participation while limiting an initial level of losses over a specified outcome period, typically in exchange for reduced upside potential.

With strategies available across different underlying assets, protection levels and growth-oriented objectives, investors can choose an approach that best reflects their individual goals and time horizon.

While the market's direction will remain uncertain, having clearer parameters around potential gains and losses may provide the confidence needed to stay invested when volatility rises.

Defined outcome ETFs may be particularly relevant for investors approaching a major financial transition, such as retirement, who still need equity growth but have less capacity to recover from a significant drawdown.

Two defined outcome-oriented ETF approaches that have gained traction in today's environment are buffer ETFs and managed floor ETFs.

Buffer ETFs: Participate in market gains with a defined buffer against losses

Buffer ETFs may appeal to investors who want to maintain market exposure while seeking protection against an initial portion of losses over a specified period.

Typically tracking an underlying index like the S&P 500, Nasdaq-100 or Russell 2000, these ETFs provide participation in the index's gains up to a predetermined cap.

Common buffer levels (or standard amounts of downside protection) are 9%, 15%, 20% or 30% over a defined period, often three, six or 12 months. This means that if the index declines by less than the stated buffer over the outcome period, the ETF is designed to absorb that loss; if the decline exceeds the buffer, the investor remains exposed to losses beyond it.

The tradeoff is that buffer ETFs cap how much of an index's gains an investor can capture. For example, if the ETF has a 10% cap, and the index rises 13% over the outcome period, the investor's return would be limited to 10%, before fees and expenses.

These ETFs are often used for assets tied to shorter-term spending needs, frequently serving as an alternative for capital that may be needed within the next one to three years.

Managed floor ETFs: Stay invested with a built-in floor against declines

Managed floor ETFs, on the other hand, may appeal to investors who still need long-term equity growth potential but desire a strategy that is designed to reduce the impact of a severe market decline.

Unlike buffer ETFs, which seek to absorb an initial portion of losses over a defined period, managed floor ETFs are generally designed to tolerate shallow declines and step in with greater protection when markets begin to fall more sharply.

The strategy combines equity exposure with an options overlay intended to hedge against deeper losses while often maintaining meaningful upside potential.

The options positions are laddered across different expiration dates and renewed systematically. As a result, the fund's effective floor can change over time and may be higher or lower than its approximate target at any particular point.

Tradeoffs? Because the floor is maintained through active decisions rather than a fixed contract, protection can vary; the fund may still be repositioning when a rebound starts, missing part of the upside.

These funds also tend to carry higher costs and offer less predictability than buffer ETFs.

Don't want to pick a market movement side? Consider managing tension

Buffer ETFs provide defined protection over a set period in exchange for a capped upside. Managed floor ETFs take a different approach, seeking to limit deeper losses while often maintaining meaningful participation when markets rise.

Neither ETF eliminates risk nor replaces a financial plan created around specific goals and timelines.

But both offer a way to stay invested with more clarity about what's protected and possible rather than an all-or-nothing approach to market risk.

Related Content

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• The Best Hedged ETFs for Lower-Risk Investors and Retirees
• The Best ETFs to Buy and Hold for the Long Term
• The Best All-in-One ETFs to Keep Your Investment Portfolio Simple
• How to Use the Dividend Barbell Rule in Retirement With ETFs

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.

Digital payments refer to any transactions where money moves electronically rather than in cash. That means credit and debit cards, online bank transfers, e-wallets and mobile payments, such as Apple Pay and Google Pay, as well as Buy Now, Pay Later (BNPL) plans.

Charge cards emerged in the 1950s, followed by mass‑market credit cards in the 1960s and 1970s, and e-commerce in the late 1990s. But cashless payments have become standard over the past decade, since smartphones and contactless cards turned payments into taps.

Here's the problem: When the way we pay changes, the way we think about spending changes, too. And that shift can affect our budgets and long-term financial goals.

The psychology behind spending For decades, paying with cash created a natural pause. You took out your wallet, counted bills, felt them leave your hand and saw the remaining stack of cash get thinner. That small moment activated a real sense of loss and served as a natural check on spending.

Making digital payments with apps such as Venmo and Zelle smooths that friction away. Spending decisions happen faster and with far less thought.

As our spending has moved from bills and coins to cards and phones, we've lost some of those guardrails. The transaction is the same on paper, but it doesn't register in the same way in our minds.

How digital payments make spending feel less real

Cash has weight and texture. Digital money doesn't. That missing weight can quietly change our choices.

Not touching money severs a sensory link between cost and purchase. Without the visual of a thinning wallet, it's easier to misjudge how quickly small buys add up.

Online retailers' checkout flows are designed for near-zero friction. Stored cards, one-click buttons, autofill shipping and express wallets move you from want to "order placed" in seconds.

The design of digital checkouts drives impulse purchases. Convenience is deliberately engineered to keep transactions effortless.

Every tap and swipe is built to eliminate hesitation. The easier they make it to pay, the less time you spend weighing whether you actually need something. That speed is exactly what turns a passing want into a completed sale.

You can see the flip side in ecommerce data: Slow checkouts are the number-one reason shoppers bail, according to research from Baymard, with average cart abandonment hovering around 70%. Businesses remove friction because it works.

With cash, you see less money in your hand. With digital, you see a number in an app sometime later. Autopay and BNPL plans can further blur the picture, spreading the cost out and moving it away from the moment of purchase. In that way, the spending is real… but the sensation is faint.

What this means for your money

When purchases feel easier, two things often follow: Spending creeps up and awareness drifts down. That's a tough combination for any household budget.

You can see the pattern in newer payment forms, too. BNPL options split a single cost into multiple future payments, keeping the initial checkout total low.

Research from the Consumer Financial Protection Bureau (CFPB) highlights the rapid adoption of BNPL. The CFPB has also raised concerns about late fees and the risk of juggling multiple payment schedules.

The frictionless nature of digital payments can quietly erode savings. That's why consumers should reintroduce intentional pauses into their spending. The biggest danger isn't a single large purchase. It's the steady stream of small transactions that add up unnoticed.

Practical ways to make digital spending more visible:

• Turn on real‑time transaction alerts for every card and account
• Remove stored cards from browsers
• Use category caps and alerts in your budgeting app
• Adopt a 24‑hour rule for non-essential online purchases

These small moves help create a clearer picture of your spending. And they help keep your longer-term goals in focus, whether that's paying off debt or building up your emergency fund.

The role of financial institutions and tech providers

Banks and fintechs helped make spending seamless. They can just as easily help make it understandable, starting with better defaults for users, such as real‑time push notifications on your smartphone that alert you to spending, or the option to set custom spending limits by merchant or category.

Subscription management tools that spot and surface recurring charges can help keep money on autopilot without it slipping out of view. And for higher-risk features, such as tap-to-pay without strong authentication or instant credit at checkout, providers can offer opt-in speed bumps and clearer disclosures.

Ultimately, the goal isn't to add friction for the sake of it, but to give users the visibility they need to stay in control.

The bottom line

Digital payments are here to stay because they're fast and wildly convenient. However, they also make spending feel less real. Lower payment friction dulls the "pain of paying" and can nudge us toward buying more than we mean to.

As payments keep evolving, the need for personal guardrails will only grow. Take a few minutes this week to turn on smartphone alerts or add a couple of speed bumps that slow down your spending.

Small moves make digital payments feel real again. And that will help keep your financial plan on track in a world where paying gets easier every year.

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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.

With economic uncertainty spreading across the country, Americans are finding it difficult to keep up.

If an unexpected expense arises, they feel even more financially vulnerable, with 29% of Americans having more credit card debt than they have in savings and nearly one in four having no savings at all.

This is why it's becoming increasingly important to have money set aside for emergencies. The peace of mind that comes with planning and being prepared for surprise expenses can't be overlooked.

While the costs of goods continue to rise and credit card debt has hit record highs, there are three things we can do to be prepared for unexpected expenses in the future.

1. Start small

Between putting money aside for retirement and making sure you have enough for everyday expenses, it might seem as if you can't afford to invest in an emergency fund.

One of the biggest mistakes people can make with their emergency funds is to start out believing they need thousands of dollars set in it. This isn't feasible or necessary.

The truth is that every emergency fund begins and is useful with that first deposit.

Financial security isn't about suddenly having thousands of dollars on hand; it's investing in the habit of slowly increasing your funds over time. Even something as simple as a few hundred dollars set aside can cover common financial expenses like a minor car repair, a broken appliance or a higher-than-normal utility bill.

If you find yourself stuck with one of these emergencies and you don't have any money to cover them, these expenses could often end up on a credit card. This leads to debt that will stay around much longer than the emergency itself.

Never underestimate the importance of the first deposit into your emergency fund. It's a crucial step in creating a financial habit that will protect your future self.

2. Automate your savings

The easiest way to save money is to not be tempted to spend it. While you're stressed about paying for everyday expenses and investing money into your retirement, saving anything extra often gets forgotten. This is why automating your savings can be such a powerful tool.

Don't start your savings habit by setting aside whatever funds you have left over at the end of each month, because many times, there is often nothing or very little left.

Making things automatic creates a set-it-and-forget-it mindset where you save first and spend what's left. When you schedule this automatic transfer every month, you are telling yourself that this emergency savings account is a priority instead of an option.

One of the most overlooked benefits of automatic transfers is that you are removing the emotional side of it. It is likely that every month will bring a temptation to buy yourself something.

Maybe you've had your eye on a new TV or a band you have been wanting to see is coming into town. If you look at your account and see "extra" funds, it appears you can afford to spend the extra money, when in reality, you can't.

If it goes into your savings accounts as soon as your paycheck hits, your spending decision has been made for you.

Many of my clients have found that once money is transferred automatically, their spending habits begin to adapt to this normal remaining balance.

3. Invest in a high-yield account

While it's best to keep your emergency fund in an easily accessible account without withdrawal penalties, that doesn't mean that you can't still earn interest on your funds.

While traditional savings accounts can be a good place to start, this might be an opportunity to research high-yield savings accounts. Look for accounts that offer high interest rates, such as a money market account or an online savings account.

Traditional savings accounts generally offer rates from 0.01% to 0.02%, while high-yield accounts pay higher than 4%, with some rates higher than 5%. That means if you deposit $10,000, you'll have an additional $500 in one year without doing anything else.

Unlike the investments that you might have for retirement, where there are taxes or penalties for early withdrawals, funds in high-yield savings accounts are generally available immediately when you need them. If there are a few months when you aren't able to actively contribute to the account, the money in it is still growing.

While the interest alone isn't going to help cover all of your emergencies right away, they provide that extra boost that requires no effort from you.

When you start your emergency fund, instead of focusing on a goal that could be years or months away, concentrate on achieving smaller objectives. Break it down into smaller amounts that don't seem too overwhelming.

• Goal No. 1: Save $200
• Goal No. 2: Save $400 more
• Goal No. 3: Save $800 more
• Long-term goal: Save three to six months' worth of expenses

While it might be easy to do, don't start comparing yourself with others. Everyone is at a different stage in their savings journey.

People who are considered in a positive financial situation didn't get there through big, dramatic changes. It often starts with small actions that quickly become common habits.

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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.

"Kenny" needed to speak with a lawyer — any lawyer — as soon as possible. "I was in a panic, frightened out of my mind of what could happen," he told me during our phone call on a recent Friday evening.

This was the beginning of one of the strangest 30 minutes I've ever spent on the phone with someone in the category of "I need your help now — but I'm not going to give you any information about why."

He not only had a legal problem, but there was an additional reason for his call that had nothing to do with his panic. "I phoned several lawyers' offices, but all of my calls are being filtered by receptionists, who are not very nice and refuse to connect me with an attorney.

"That's why I am calling you. I read your story about the legal aid office manager who illegally placed microphones and cameras throughout the office and recorded confidential, attorney-client conversations."

A real concern

I asked Kenny, "How is that article relevant to your complaint about not being connected with an attorney?"

"They are asking me why I want to talk with the lawyer. They all want me to go into detail about what I am dealing with. That scares me! I do not want to be in the same situation as the clients in your story whose confidential conversations were recorded without their permission."

"Kenny, the receptionist has to find out if your problem is something the firm deals with."

"I don't want to tell the receptionist too much, because they are not the lawyer," he explained.

His concern is real and raises an important question: If you speak with a lawyer's receptionist or paralegal instead of the attorney, is what you tell them protected by the attorney-client privilege?

In many, but not all, instances, the answer is yes.

A cornerstone of our legal system

Everyone has heard of the attorney-client privilege, one of the oldest and most respected principles in the law. It protects confidential communications between a lawyer and their client that relate to the client's reason for seeking legal advice or services.

While there are exceptions — such as asking a lawyer how to get away with a crime — the protection applies to not only verbal discussions but also written correspondence, emails, text messages and other forms of communication.

Obviously, a lawyer cannot provide sound advice without knowing all of the facts — the good, the bad, the ugly. The privilege encourages complete honesty without fear that what the client says will be used against them.

If clients feared their conversations might later be revealed in court, they would withhold information, thereby frustrating justice.

How a law office functions

When you first call a law office, often the person answering the phone will be a receptionist. In addition to setting up appointments, their job is to discover why you are calling — your legal problem or concern — and determine if their office handles such matters.

They also provide the attorney with the information that is needed before the first consultation.

In our office, my paralegal, Anne, will say, "Tell me what's going on. What's the problem, and how can we help you?"

These open-ended questions yield a great deal of information, enabling her to brief me quickly while the caller is on hold.

I then speak with them, further refining the nature of the legal issues to determine if this is something we will handle or can refer to a colleague.

I try to talk with everyone who calls our office, even if we do not deal with their specific legal issue, because I know a lot of lawyers can't be bothered with spending a couple of minutes with someone who is at a low point in their lives.

To me, it is part of the reward and duty to the public of being a lawyer. These conversations often are the basis for my articles.

In most offices, lawyers do not work alone

While there are some solo practitioners — mostly criminal defense attorneys — law offices today are organizations that in many ways resemble teams in which receptionists, intake personnel, secretaries, paralegals, investigators, office managers and translators play vital roles in the delivery of legal services.

This is a practical reality, as no law firm could function if clients could speak only with the attorney.

For that reason, confidential communications with a lawyer's receptionist or other authorized staff member for the purpose of obtaining legal advice are, in most circumstances, protected by the attorney-client privilege.

The lawyer's employees who gather information for the attorney are legally considered agents of the lawyer, and it is as if the client were speaking directly with the attorney.

What a receptionist needs to know

The receptionist should be thought of as a screener, and yes, sometimes their questions may be a bit uncomfortable.

If you're calling about an auto accident, you would be asked to describe what happened:

• What is the name of the other driver?
• When did the accident occur?
• Have you spoken with your or their insurance company and/or another lawyer?
• Did you hire another lawyer and are unhappy with the way they are handling your case?

Answers to these questions impact whether the firm is interested or able to take your case.

A "conflicts check" must be run to see if the firm already represents the other driver. Also, are there any critical time limits, such as statutes of limitations, to worry about?

Present and potential clients are covered by the privilege

It is important to stress that the privilege is not limited to people who actually become clients of the lawyer. Even if you don't hire that firm, your conversation remains confidential.

Clearly, prospective clients deserve protection when they consult a lawyer in good faith for the purpose of getting legal advice. The confidentiality of those communications encourages obtaining advice before making seriously wrong decisions.

When privilege does not apply

These are the times when attorney-client privilege does not apply:

• Non-legal/administrative details. Routine interactions, such as providing your name, asking billing questions or scheduling appointments, are administrative facts, not confidential legal disclosures.
• Conversations in public. Speaking loudly to a receptionist in a crowded waiting room or public lobby, where others can overhear, voids the requirement for privacy.
• Unnecessary third parties. If you share details with a receptionist while unrelated strangers or outside parties are present within earshot, the privilege can be waived.
• Future crimes or fraud. Telling a staff member or attorney about your plans to commit a crime or ongoing fraud strips away confidentiality under the crime-fraud exception.
• No intention to retain. There's no protective relationship if you give casual information to a front-desk worker without any intent to seek formal legal representation or advice.

What was Kenny so worried about?

After explaining all of that to Kenny, I was itching to know what he was so worried about.

He told me, "Some people saw a few things I had on my computer that should not be there, and I am being surveilled."

"Pornography?" I asked.

"Well, I'd prefer not to answer, but you are close," he replied, thanking me for my time and fatefully concluding, "A police car just pulled into my driveway."

Then I heard, "Hands up. Turn around."

And the call was disconnected.

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.

A few months ago, I got a call from a dentist who had been working as an employee for three years.

She was making close to $200,000 a year, had no major complaints about her job and wanted my professional opinion on a crossroads: Should she buy a practice now, or wait a few years until she felt more confident running a small business?

I asked her a different question first. What does waiting cost you?

She didn't know. Almost nobody does, because almost nobody runs the math before they decide to wait. When smart professionals think about buying a business, they evaluate the decision entirely in terms of visible risk:

• The debt
• The staffing responsibilities
• The fear of something going sideways

What gets left out of that calculation is the compounding cost of staying put.

I work exclusively with buyers on the acquisition side of dental practice transitions. My team has advised on more than 1,500 deals across 49 states, and the most expensive mistake I see isn't a bad purchase.

It's a highly capable, well-qualified buyer who waits years longer than the financial numbers support, because waiting feels like the responsible choice.

It isn't.

What the delay costs

The American Dental Association's Health Policy Institute tracks net income for dentists who own their practices vs those who work as employees. Practice owners netted an average of $217,781 in 2024. Associates netted $160,891. That's an annual income gap of roughly $57,000, and it has held steady for years.

To see how that plays out over a career, picture three professionals who start practicing at age 36 and retire at age 65:

• The early buyer buys a practice at 38
• The hesitant buyer waits five years and buys at 43
• The career employee stays an associate for the entire 29-year career

When you model realistic income progressions, business equity and tax structures, the outcomes look very different. By retirement, the early buyer accumulates roughly $10.8 million in cumulative career earnings. The hesitant buyer accumulates $9.7 million. The career employee finishes around $6 million.

That's a $1.1 million penalty for a five-year delay, and a $4.8 million gap between buying early and never buying at all. Every year a capable buyer waits is a year of wealth compounding they can't recover.

The number most people miss in this calculation is the financial inflection point. A business owner's income jumps sharply once the initial acquisition loan is paid off.

The dentist who bought at 38 hits that milestone at 48. The one who waited until 43 doesn't get there until 53. Those extra five years, spent at a lower income level while carrying acquisition debt later in life, are where most of the seven-figure gap comes from.

It's not one bad year. It's a decade of smaller numbers that never have the time to catch up.

Why capable people still wait

The professionals I advise aren't reckless. If anything, they're the opposite. Clinical fields attract people who are cautious, detail-oriented and trained to avoid mistakes. That instinct produces excellent patient care, but it works against the same people at the negotiating table.

The hesitation I hear most often isn't about money. It's about competence.

• Will I know how to manage payroll?
• Will the staff quit on me?
• Will I make a leadership mistake I can't undo?

These are fair questions, but buyers routinely overstate the real operational risk. When my firm tracked patient retention across hundreds of transitions, the data showed that the average practice gains 4.1% more patients in the six months after a sale than it loses. The fear tends to be larger than the reality.

Student debt makes the hesitation worse, not better. Many young professionals graduate with $300,000 or more in loans and assume the safer move is to hold on to a steady paycheck until that balance feels more manageable. It's an understandable reaction, but the math runs the other way.

Ownership income is almost always the fastest path to paying down that debt, because a $57,000 annual income gap closes a six-figure loan significantly faster than a flat employee salary ever will.

A framework for anyone weighing this decision

The issues at play here aren't unique to dentistry. Any licensed professional who could own the practice they currently work in, whether that's a veterinarian, an optometrist or a physician in private practice, is working through a version of the same math.

Before deciding to wait another year, three considerations are worth addressing honestly:

What is the actual income gap in your field between owners and employees?

Do not estimate. Most professional associations publish this data the way the ADA does for dentistry. Find the real number.

What does that gap cost you over the years you consider waiting?

Multiply the annual income difference by the number of years you're thinking about delaying, then add a conservative estimate of the equity you would build in a business purchased today.

The number is almost always larger than people expect. Remember, too, that skills and experience compound just as the numbers do.

Separate the fears that are about your own competence from the fears that are about the specific deal in front of you.

Competence fears are solvable.

With the right accountant, attorney and an adviser who works only for you (not the seller), most people learn the business side faster than they think.

Deal fears, such as a practice with declining revenue or a lease with serious problems, are worth taking seriously and leaving behind.

Take heart that at this very moment, within a few miles of you, there is an owner-professional of the business you're considering buying who is operating a level below what you'd consider "competent" — and they're not going bankrupt.

The professionals who build strong lifetime wealth aren't the ones who eliminate every uncertainty before buying. They are the ones who run the numbers, build an unconflicted team around them and move when the math says they are ready.

The question is not whether you feel ready. It is what another year of waiting is already costing you.

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

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

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

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

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

New hurdles for retirees

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

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

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

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

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

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

A big mistake

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

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

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

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

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

One coordinated strategy

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

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

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

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

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

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

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

With the stock market trading near record highs, confidence is soaring, and investors are increasingly buying into the good vibes.

Many people think the bull market will continue indefinitely. They reason that President Donald Trump's pro-growth policies will create a durable expansion, with deregulation and decreasing oil prices and mortgage rates fueling the surge.

Market forecasters have no crystal ball, but history teaches us important lessons, such as: The good times don't last forever, and sometimes the warm glow of summer optimism in the market fades into a long, cold winter of harsh economic reality.

Maybe this era will defy history and the economy will have several more years of solid economic growth. But investors nearing retirement should ask a different question: What if it doesn't?

History shows that periods of confidence often create the conditions for complacency, which can be expensive.

Middle-class realities

After enduring inflation, rising interest rates, regional banking concerns and geopolitical uncertainty, markets have proven remarkably resilient. The S&P 500 has more than doubled from its October 2022 lows, rewarding investors who stayed invested through volatility.

There's a belief among many market experts that any pullbacks will be shallow, and if markets decline, many investors assume recoveries will be swift because that's largely been their recent experience — their recency bias (which we'll explore later). But they're overlooking two important realities:

• The middle class is struggling
• Debt — both personal and the national debt ($40 trillion) — keeps climbing

Those factors could help trigger a prolonged or extreme market pullback.

One challenge in interpreting today's economy is recognizing that experiences vary dramatically. The economy is stronger only for a small percentage of people.

For example, only 3.2% of American retirees have at least $1 million or more in retirement savings. But for many people, their financial situation in today's economic climate isn't so great.

• According to the Federal Reserve Bank of New York, household debt reached about $18.8 trillion in early 2026, an all-time high.
• Getting an affordable mortgage is difficult and burdensome. Mortgage balances, credit card debt, auto loans and student debt have all expanded meaningfully in the last several years.
• Consumers are increasingly relying on loans and debt to cover the rising costs of daily expenses and sustain their lifestyles.

Debt works wonderfully when times are good. But it becomes unforgiving when economic conditions deteriorate.

The danger of recency bias

Some investors and market experts believe that a market pullback will be a 20% to 30% decline at the maximum, and that the recovery will happen within a year.

They have recency bias pointing to recent pullbacks and recoveries, such as events that occurred in 2020, 2022 and 2025. But they fail to consider what happened in the 2007-2009 Great Recession and before that, in the technology crash in 2001.

They've forgotten or never experienced previous bear markets during the 1950s, 1960s, 1970s, the early 1980s and Black Monday of 1987.

This isn't even to speak of the Great Crash of 1929 and the Great Depression of the 1930s. Most people don't believe those events will ever happen again.

The scary part for many investors is that they have an investment and retirement plan that assumes economic recessions will be short-lived, market downturns will be shallow, and the recovery will be quick.

But what if that doesn't happen? Investors must contemplate that question and plan for it.

Prudent investors need to ask these uncomfortable questions:

• What if growth slows unexpectedly?
• What if inflation proves stickier?
• What if deficits eventually pressure interest rates?
• What if consumers begin pulling back?
• What if the next bear market looks more like 2000 or 2008 than 2020?

For those in retirement or nearing it, how do they prepare? They shouldn't ignore the realities of the past. As the famous maxim goes, "History doesn't repeat exactly, but it often rhymes."

Have peace of mind by creating your own economic reality

There are so many factors out of our control that will often give us reasons to worry — wars, politics, inflation, interest rates, market headlines, etc.

But financial confidence doesn't come from predicting the future correctly. It comes from preparing thoughtfully. Focus on what you can control — your spending, debt, tax-mitigation strategies, market risk exposure and income planning.

Just as in proper business planning, you should consider the worst-case scenario and develop a contingency plan. Create your own economic reality by building a retirement framework that will protect you in a market pullback, a framework that prevents you from having to adjust your lifestyle.

Because eventually, another prolonged downturn will arrive. No one knows when. But history suggests it will happen again.

Stress-test common retirement assumptions. Ask yourself:

• "If markets fell 35% and remained down for three years or more, would my plan still work?"
• "In the event of a market decline, can my lifestyle be sustained, or might I be forced to reduce spending or not travel as desired?"
• "If inflation remained elevated, would my income sustain my lifestyle?"
• "Could I maintain peace of mind regardless of market headlines?"

These questions matter — especially when retirement shifts from the accumulation stage to the distribution stage.

It's not the time for a high-risk, high-reward approach

Savings goals for many people are way ahead of schedule. Protect the harvest you enjoy now and store up for a long winter, so when the market is disrupted for a lengthy period, you have what you need and can help family members and others, too.

The most successful retirees we meet are rarely the ones who took the greatest risks. Often, they are the ones who planned thoughtfully.

• They retired earlier than expected because their conservative plans exceeded expectations
• Their spending confidence increased because reality exceeded assumptions
• They were able to travel more, give more, help family members more and enjoy life more — not because they chased the upside of the market, but because they built margin into their lives

Others implemented tax-efficient strategies that allowed more of their wealth to remain invested. Some created robust income streams that were less dependent on daily market fluctuations.

A comfortable retirement in these uncertain times requires reducing your risk and taking a conservative approach.

You've spent decades working, saving, investing, sacrificing and delaying gratification. You built wealth so that one day your money could begin working for you.

Don't leave that next chapter to chance. Plan carefully enough that if markets disappoint, your lifestyle remains intact, your confidence remains strong and your peace of mind remains unmoved.

That might ultimately be the greatest return an investment plan can provide.

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.

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

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

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

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

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

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

The attachment problem

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

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

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

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

The tax trap

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

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

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

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

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

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

Building a way out

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

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

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

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

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

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

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

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

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

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

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

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

Medical billing mistakes are an expensive epidemic in American healthcare.

Studies consistently show that a staggering majority of hospital invoices contain errors, ranging from double billing to miscoded procedures.

For decades, consumer advocates have given the same advice: Request an itemized statement and review the codes. But for the average patient, staring at a sheet of five-digit current procedural terminology (CPT) codes is like trying to read hieroglyphics.

Fortunately, the balance of power is shifting. Generative artificial intelligence (AI) tools such as OpenAI's ChatGPT and Google's Gemini have emerged as powerful personal finance assistants.

By feeding cryptic billing logs into these AI platforms, consumers can instantly break down complex medical jargon, verify insurance logic and pinpoint specific overcharges that human eyes routinely overlook.

The AI audit in action: A case study

To understand exactly how this works, let me share a real-world analysis related to Mohs surgery I underwent earlier this year. Upon receiving my itemized statement from my medical provider, I compared it with my insurer's explanation of benefits (EOB).

The sticker price was a dizzying $3,802, loaded with confusing five-digit codes and multiple offsetting entries, and my insurance covered just $1,390, leaving me responsible for $2,412 out-of-pocket.

That's when I turned to Gemini.

I snipped the detailed information from my bill and saved it as a PDF, keeping my personal information private. I uploaded the document to Gemini with the following prompt: Analyze this bill and tell me what the codes mean and assess whether the insurance coverage is correct.

Gemini systematically untangled each line item to explain each in easy-to-understand terms.

The AI discovery: The consultation trap

Beyond mapping codes to plain English, AI's real value lies in its ability to cross-examine billing logic against standard insurance rules. AI successfully verified that the provider was treating me as an "in-network" patient due to the presence of "Code 3000-Contractual Write-Offs" across seven distinct entries.

The AI mathematically validated that the write-offs properly reduced the gross retail price to an allowed contract amount.

But critically, AI flagged a glaring systemic discrepancy that I should inquire about, in this case an office consultation fee. AI flagged that there was a very high probability that this consultation line was being contested or denied entirely by the insurance provider.

Insurance companies generally bundle the initial evaluation into the surgical procedure if they happen on the same day, unless the doctor evaluated a separate, unrelated medical issue during that same visit.

In my situation, there was no such "consultation." I had been referred to the Mohs surgeon by my regular dermatologist after a biopsy.

Because the itemized bill split the write-offs across multiple entries for "technical" and "professional" components, it effectively masked whether the core consultation line was rejected and pushed directly onto my out-of-pocket responsibility.

After calling the provider and disputing the charge, they removed the office consultation fee of $269.

Your step-by-step guide to auditing bills with AI

If you want to put ChatGPT or Gemini to work on your medical bills, follow this strategic blueprint to ensure accuracy and protect your financial interests:

Secure an itemized bill. Don't rely on the summary invoice that simply demands a "balance due." Call the provider's billing office or log into your patient portal and request an itemized statement showing CPT codes, revenue codes and logged contractual write-offs.

Redact sensitive information. Before uploading any document or typing text into an AI model, scratch out your name, Social Security number, address and policy ID number to protect your medical privacy.

Deploy a structured audit prompt. Feed the text or a clear image of the bill into the AI. Use a direct prompt such as: "Act as an expert medical billing advocate. Decode these CPT codes, explain what procedures were done, calculate the total write-offs, and check for standard insurance logic errors."

Cross-reference with your EOB. Never pay a hospital bill until you match it against the explanation of benefits (EOB) mailed by your health insurer. If the AI identified a contested line — such as the 99243E consultation fee — verify if your insurer passed 100% of that charge onto you.

Arm yourself for the dispute. If the AI spots a bundling error or an overcharge exceeding the allowed contract threshold, call the medical provider's billing office.

If appropriate, you can ask them to apply a specific modifier to prove the consultation was distinct from the surgery, or dispute the charge entirely if no separate consultation took place. Know that mistakes can occur in coding that cause insurers to not cover otherwise covered procedures.

The bottom line

Artificial intelligence won't write a check for you, but it acts as a free, highly trained financial advocate.

Spending 10 minutes running your medical invoices through an AI model can prevent you from paying hundreds of dollars in automated administrative errors.

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

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

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

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

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

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

Traditional mortgage guidelines weren't built for most retirees

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

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

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

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

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

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

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

Asset depletion as a workaround

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

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

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

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

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

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

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

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

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

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

What to do before you apply

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

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

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

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

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

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

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

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

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

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

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

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

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

Who you talk to determines your ability to buy a home

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

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

Remember, a denial is not a verdict.

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

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

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

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

Why does retirement shift the goalposts?

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

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

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

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

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

Income

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

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

Investments

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

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

Taxes

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

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

Making the pieces fit

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

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

Everything becomes connected.

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

Questions begin to surface, such as:

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

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

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

But retirement changes the scoreboard.

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

So many decisions

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

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

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

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

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

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

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

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

Dan Dunkin contributed to this article.

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

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

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

Until it didn't.

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

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

The math has changed

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

That product doesn't exist anymore.

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

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

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

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

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

The menu has changed

The investment universe got bigger in those same 40 years.

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

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

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

Where I keep my wealth

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

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

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

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

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

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

A word on bitcoin

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

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

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

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

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

The point

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

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

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

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

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

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

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

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

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

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

Looking for clarity

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

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

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

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

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

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

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

Avoid costly mistakes

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

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

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

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

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

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

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

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

Don't neglect the emotional side

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

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

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

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

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

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

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

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• Five Financial Changes That Happen When Your Spouse Dies
• Social Security for Widowed Parents Falls Far Short of Need

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.

Financial literacy is the process of developing the appropriate skills to make informed decisions with the financial resources you have available. It is about more than "money management." It is about understanding how money impacts different aspects of your life.

The different components of financial literacy include:

• Understanding your earnings
• How to save and invest
• How to budget and spend
• How to properly borrow funds and take on debt

In addition to knowing how money flows, being financially literate helps build confidence, independence and resilience. When you know you can depend on yourself to make good financial decisions, you are putting yourself in a position to succeed.

Most people wait too long to learn about money. I was fortunate that my first experiences with financial management came while I was still living at home with my parents. In my junior high home economics class, we learned how to balance a checkbook.

My first experience with earnings and spending came during high school when I got my first job. I learned how to budget my expenses not based on my earnings, but on my take-home pay after taxes.

I also had to account for a monthly loan payment on my car and understand the difference between interest and principal.

Looking back has made me wonder how today's parents can help their own kids begin their own journey towards financial literacy. For many people, resources are scarce. And it may seem there isn't much to do until kids get their first job.

But there are plenty of daily activities that have some relation to financial literacy and can help parents take more ownership of their kids' financial education.

Our firm recently launched a free tool for parents called The Lern-ing Curve. Parents can use it to find age-appropriate lessons and activities that will teach kids how to become financially literate.

Beyond that, though, the real teaching happens in daily life. What that looks like changes a lot as your kids get older.

Start young: Make it a game

A lot of parents think kids need to be older to understand money and finances. While we shouldn't expect a 3-year-old to help with 401(k) allocations, there are plenty of activities parents can do with young kids.

The key is to make it fun. Playing board games with dice can help kids learn their numbers and how they apply to the real world. Sharing with siblings can also be turned into an everyday commerce situation.

Sharing and trading Halloween candy is a perfect example. One small chocolate might not be worth the same as a bag of gummy bears unless one person loves chocolate and the other loves gummy bears. If they like both equally, maybe the small chocolate can be exchanged for half a bag of gummy bears.

These are the exact types of activities that parents are likely already engaging in without even realizing they are helping their kids become more financially literate.

The preteen years: Goals and budgeting

As kids continue to grow and learn new concepts, the same games might not be as useful or engaging. During the preteen years, kids are learning more about themselves and developing their own personalities and mindsets. They are more independent thinkers and can comprehend more sophisticated concepts.

Helping them set achievable goals that are important to them boosts confidence and teaches the value of hard work.

By working on a savings plan for these goals, parents can show their kids how to achieve short-, medium- or long-term wants and needs. From a budgeting perspective, parents can show their kids how they allocate available money.

• Short-term spending can be on everyday items like groceries and gas
• Medium-term savings might be for a family trip or gifts for the holidays
• A long-term goal could be saving and investing for college

With these types of activities, kids can see in the real world how finite resources are used and can start to learn how they would want to allocate their own allowances or resources.

The teenage years: Jobs, taxes and debt

During the teenage years, kids become even more independent. They may start preparing to leave home and find their own path. This is when parents generally start trying to teach their kids about money.

Getting a job outside of school teaches kids that there's more to earning money than just wages or salary amounts. Working with your kids to understand taxes can help them learn to budget and understand their real take-home pay.

With that take-home pay, they can start setting more long-, medium-, and short-term goals.

This is also a time to learn about debt and how to use it. From finding out how credit cards work to learning about car loans, it is important that kids understand the difference between using money and borrowing money to stretch what they already have.

You may already be doing a lot of this with your kids. But by working with your adviser or visiting The Lern-ing Curve, you can take an even more proactive approach to teaching your kids the building blocks of a successful financial future.

The earlier kids start understanding how money works, the more financially literate they will ultimately be.

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• Holidays Are a Rich Time to Talk Money With Young Adults: A Financial Adviser's Guide for Parents
• The 5 W's of a Successful Estate Planning-Focused Family Meeting, From a Wealth Adviser

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 came across a video recently from personal injury attorney Mike Rafi that laid out one of the most blatant insurance fraud schemes I can remember seeing — minus the guy dressed in a gorilla suit tearing up a car.

It's called Operation Sideswipe, and if you're wondering why, at least in part, your insurance premiums keep going up, this case is a pretty good place to start.

Here's what happened. Going back as far as 2011, a network of people called "slammers" would intentionally crash their vehicles into 18-wheelers. These were not accidents, you see. They were staged collisions, choreographed to make it look like the truck driver was at fault. The truck drivers had no idea this was happening.

After the impact, the passengers in the slammer's car would claim they'd been injured. Then a group of corrupt personal injury lawyers would file claims, push for settlements and cash out.

Why the insurance companies would pay

The trucking companies and their insurers would pay up, because settling was less expensive than fighting every single case in court.

And it went deeper than that. Like six-feet-under deeper. In 2020, a federal witness who was secretly cooperating with the FBI was shot 10 times on his mother's doorstep just four days after his indictment was made public.

The person who allegedly paid for the hit was a disbarred attorney living in a $1.2 million home with a former Hollywood stuntwoman.

All this reads like a novel you might buy at an airport bookstore. However, by the time federal authorities finally got the case under control, 63 people had been charged, and a key witness was dead.

This went on for years. And here's the part that affects you: Every one of those fraudulent claims got paid:

• Every inflated medical bill
• Every bogus lawsuit settlement
• Every fake injury claim

That's how insurance works

The insurance companies paid it all. And when insurance companies pay out billions in fraud, they don't just absorb the loss. They raise rates.

That's not greed. That's math. That's how insurance works.

The money has to come from somewhere, and it comes from you. From me. From every honest driver who has never filed a fraudulent claim in their life.

You pay your premium every month, on time, year after year. You've never caused an accident. You've never exaggerated a claim. And yet, your rates will go up partly because a ring of crooks in New Orleans intentionally crashed cars into trucks and walked away with settlement money.

The fraud gets baked into the system. The insurers raise prices to cover the losses, and the cost spreads across the entire risk pool. You end up paying the bill for somebody else's crime.

Just imagine what we don't even know about

Now, here's the thing. Operation Sideswipe is a case we know about. But I want you to think about what I call the coconut theory.

If you're sitting on an island, and a coconut falls on your head, the chances are there are lots of coconuts falling all around that island. You were hit with just this one.

We learned about this one massive scheme because it got big enough to attract federal attention. But that means — and think about this — there are many similar scams, or even larger ones, happening all over the place that we don't know about.

Smaller operations. Individual fraudsters. Staged accidents in cities across the country that never make the news.

And I'll bet Operation Sideswipe is not the first insurance fraud case you've heard about, so plenty do make the news. Each one is a coconut hitting the insurance system, and each one costs all of us money.

If one scheme in one city involved 63 people and went on for years, how many are running right now that haven't been caught? How many fraudulent claims are being paid today that will never be investigated?

Every one of those payments ends up as part of the rate calculations that determine what you and I pay for coverage.

Insurance fraud is not a victimless crime. It's a tax on every honest driver in the country, collected one premium increase at a time.

What you can do

So what can you actually do about it? How can you help put an end to this insanity? A few things.

1. After an accident, the single most important thing you can do is document everything.

I mean everything. Not most things. Getting the hint? Everything with a capital E.

Take out your phone and take pictures and/or record video of every angle of:

• Both vehicles
• The road conditions
• The traffic signs
• The weather
• The license plates
• The other driver
• Their insurance card
• Any debris on the road
• The positions of the vehicles before they get moved

Take more pictures than you think you need. You can never go back and take the ones you missed.

2. Walk around the scene, too, recording video.

Capture the other driver's demeanor.

• Are they limping?
• Are they on the phone with someone who seems to be coaching them?
• Is there a passenger who's silent at the scene but could later claim they were thrown forward and hurt?

Record all of it. Your phone's camera is the best witness you will ever have. It doesn't forget. It doesn't get intimidated. It doesn't change its story three months from now.

3. Open the Notes app on your phone and list every detail.

• The time
• The exact location
• Which lane you were in
• What the other driver said — word for word
• The names of any witnesses
• The badge numbers of responding officers

Also, note anything that seems unusual:

• A passenger who is jumping around and yelling at the scene (they could claim later to have a broken leg)
• A driver who seems oddly calm for someone who just got rear-ended
• A car that pulls up and someone gets out who wasn't involved in the crash

Write it all down. Three months from now, when the claims adjuster asks you about the details, you might not remember, but your notes will.

Why you can't just trust the system

Is it unfortunate that we have to be this diligent? Heck, yeah. Absolutely. It would be nice to just exchange insurance information, shake hands and trust the system. But the system is being abused, and we're all paying the price, literally.

Operation Sideswipe worked because there was no evidence to contradict the fraudsters. The slammers and their passengers could say whatever they wanted, and without contradicting evidence, the system believed them.

The only reason the scam finally got exposed was that federal investigators spent years building a case with resources you and I don't have.

What we do have is a phone in our pocket that takes pictures, records video and lets us type notes.

• Every picture you take is evidence
• Every video clip is a record
• Every note you write is a real account that carries weight in a way that a vague recollection months later can't

Your evidence can help protect you from being accused of causing something you didn't cause. And it's what helps your insurance company pay the honest claims quickly and fight the fraudulent ones.

Insurance fraud costs every single one of us, every single year, in higher premiums. The best defense we have isn't law enforcement.

It's you, at the scene, with your phone out, paying attention.

Want to learn more about insurance? Visit KarlSusman.com.

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• 5 Tips to Help Avoid a Denial on Your Insurance Claim

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 lot of people get into real estate the same way my brother Brian and I did. You buy a few properties on the side, learn as you go and assume steady growth will come from owning real estate long enough.

Before founding Roers Companies in 2012, we built a portfolio of about 20 residential and student housing properties near the University of Minnesota. It was a side venture we grew while working in finance — Brian as a CPA and me as a CERTIFIED FINANCIAL PLANNER® (CFP®).

At the time, we knew our local market well and had a strong network, but we were still thinking fairly small. We were focused on managing individual rentals instead of building something durable in the long run.

Looking back, it's clear we needed to shift our perspective on risk and growth. Investors today have less room for error than they did a few years ago, which makes long-term planning and risk management much more important.

While every investor's journey is different, these are the three lessons that shaped our approach — and that every investor should understand from the start.

1. Smaller doesn't always mean safer

A lot of first-time investors start with a single-family rental, duplex or small multifamily property because it feels manageable. There's nothing wrong with that approach, but many people assume smaller automatically means lower risk.

In practice, smaller properties can leave you more exposed. If you own a duplex and one tenant leaves, a large portion of your income stream disappears overnight.

A major repair can wipe out most of the year's profit. Even routine turnover carries more weight when there are only a handful of units supporting the property.

That was one of the first lessons Brian and I learned as we expanded beyond lease-to-own and student rentals. Larger apartment communities brought more operational complexity, but they also created more stability.

Vacancies, repairs and day-to-day issues had less impact on the overall performance of the property because the risk was spread across more units.

For individual investors, that doesn't necessarily mean jumping straight into a 200-unit development. It means understanding that larger properties tend to absorb the ups and downs of ownership differently.

When one tenant moves out or an unexpected repair comes up, those issues don't have the same impact they do when you only have a handful of units.

2. Diversification isn't just for the stock market

Buying a resilient property is one decision. Building a resilient portfolio is another.

One of the most important experiences in our early years came during the oil boom in North Dakota. At the time, demand was surging, and we were developing in markets that were growing incredibly fast to house the influx of oil workers.

In the thick of the boom, it felt as if demand would never slow down. Then conditions changed.

That experience reinforced something that applies everywhere: No market stays hot forever, and no region is immune to economic shifts.

After that, we became much more intentional about diversification. We expanded into different states and different types of housing because we didn't want the future of the company tied too closely to one local economy or industry.

For us, that meant — and still means — building a portfolio that isn't overly dependent on any one market, property type or stage of the economic cycle.

Individual investors should think the same way. Too often, people build portfolios entirely around what's familiar or close to home. That can work for a while, but it can also leave investors exposed to risks they didn't anticipate.

This is especially true as regional markets navigate the supply-and-demand resets we're seeing today.

Diversification in real estate is not only about owning more properties. It's about reducing the likelihood that all your investments are affected by the same economic pressures at the same time.

3. Long-term value is usually built through operations, not luck

Many people enter real estate assuming the biggest gains will come from appreciation alone. Sometimes that happens, but relying on market appreciation as the entire strategy can create problems. Strong operators look closely at how a property performs.

• Can expenses be managed more efficiently?
• Are there upgrades that could make the property more competitive?
• Is management helping the property operate at its full potential?

Those decisions tend to matter more over time than hoping the market keeps moving upward.

Investors today also face a more competitive environment than they did a decade ago, especially in multifamily housing. In this sector, value is closely tied to the income a property produces.

Improving operations, reducing inefficiencies and making thoughtful improvements can all strengthen performance in a way that's far more reliable than trying to predict market swings.

That shift in thinking changes how investors approach growth. Instead of waiting for the market to create value, they focus on building value through better execution and better long-term management.

Real estate can absolutely be a strong long-term wealth-building tool, and experience has taught me that success usually comes from focus more than momentum.

The investors who last are usually the ones who show grit when markets change and avoid making emotional decisions when things get uncertain.

That approach might not feel exciting in the short term, but it tends to create far more stability — and success — in the long run.

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

You've probably spent real time getting your investment costs down. You moved out of a high-fee mutual fund years ago. You watch your expense ratios. That instinct has served you well.

However, here's the uncomfortable math: Shaving another 0.10% off an already-cheap portfolio might save you a few hundred dollars a year. A poorly timed Roth conversion, a missed tax-loss harvesting opportunity or a Medicare premium surcharge you didn't see coming can cost you thousands in a single year, and the damage can compound for the rest of your retirement.

Most investors have optimized fees about as far as they can go. Few have done the same with taxes. That gap is where a lot of your wealth is quietly leaking out, and unlike a fund's expense ratio, nobody sends you a clear, itemized bill for it.

Why fees got all the attention

Fees became the focus because they're easy to see and easy to act on. Pull up two funds, compare the expense ratio, pick the cheaper one. Index funds and ETFs have pushed costs for diversified portfolios down to a few basis points, and that progress is real.

Taxes don't work that way. The cost is spread across decisions made in different years, different accounts and sometimes different tax codes entirely. There's no ticker symbol for "the Roth conversion you should have done in 2024." That makes tax inefficiency much easier to ignore, even though it's often the bigger number.

Here are eight places where that money tends to disappear, and what you can do about each one.

1. Your asset location may be backward

Asset allocation (how much you hold in stocks versus bonds) gets all the attention. Asset location (which accounts hold those assets) usually gets none.

Say you hold $200,000 in taxable bonds throwing off 5% interest, or $10,000 a year, inside a regular brokerage account taxed at your 24% tax bracket. That's $2,400 a year in tax you wouldn't owe if those bonds sat in your IRA instead.

Meanwhile, the tax-efficient index fund sitting in that IRA would have cost you almost nothing in a taxable account.

Swap the two and you keep that $2,400 every year going forward. That's usually a one-time fix you can make in an afternoon with your statements in front of you.

2. You're skipping your cheapest years to do Roth conversions

If you retired before claiming Social Security and your required minimum distributions (RMDs) haven't kicked in, you may be living through the lowest-tax years of your entire retirement, often sitting comfortably in the 12% or 22% bracket.

That window typically closes once RMDs begin, sometimes pushing you into a higher bracket for the rest of your life.

Converting traditional IRA assets to a Roth during these lower-income years, even in modest annual amounts, can lock in today's tax rate instead of tomorrow's higher one. Run the numbers with your tax preparer before year-end, since this window doesn't reopen.

3. Your mutual fund just sent you a tax bill for a year it lost money

If you've ever opened a 1099 and found a capital gains distribution on a fund that actually dropped in value that year, you've felt this one. It happens because the fund manager sold winning positions inside the fund, and the tax bill gets passed to everyone holding shares, regardless of when they bought in.

Let's say you have a $150,000 position in an actively managed fund and it distributes a 6% capital gain, which is a fairly ordinary distribution in an up market. That's $9,000 in gains landing on your return and, at a 15% capital gains rate, a $1,350 tax bill on a fund that may have actually lost value during your holding period.

ETFs are structured to largely avoid this. If you're holding actively managed mutual funds in a taxable account, check whether the same strategy is available in ETF form, or move that holding into your IRA where the distribution doesn't matter.

4. You're pulling money from the wrong account first

Most retirees draw down whichever account feels easiest to tap rather than the one that's most tax-efficient.

Spend down a $500,000 taxable account too fast in your 60s, for instance, and you may enter your 70s relying heavily on traditional IRA withdrawals just as RMDs force even more income out at the same time, pushing what could have been a 22% bracket year into the 24% bracket.

Leave your Roth untouched until you don't need it and you waste years of tax-free growth it could have provided.

The right order depends on your brackets, balances and timeline, but it's worth building a multi-year withdrawal plan rather than deciding year by year.

5. You're not harvesting losses when the market gives you the chance

Tax-loss harvesting means selling an investment at a loss to offset gains elsewhere in your portfolio, or up to $3,000 of ordinary income each year, then reinvesting in something similar so you stay in the market.

If a market downturn leaves one holding down $8,000, selling that loss to offset $8,000 of gains elsewhere saves you roughly $1,200 to $1,920 in tax, depending on whether it offsets short-term or long-term gains.

It costs nothing but attention, and most taxable investors never bother unless their adviser automates it.

6. Medicare could quietly double your premium

The income-related monthly adjustment amount (IRMAA) adds a surcharge to your Medicare Part B and Part D premiums once income crosses certain thresholds, based on your tax return from two years earlier.

In 2026, that surcharge kicks in above $109,000 for single filers and $218,000 for joint filers, pushing your total Part B premium as high as $689.90 a month, with Part D adding up to $91 more.

Because of the two-year lookback, a large Roth conversion, a property sale or a big capital gains year can trigger a surcharge you won't see until the notice arrives. What's more, crossing a threshold by even a dollar triggers the full surcharge for that tier.

If you're approaching Medicare age or planning a big income event, model the IRMAA impact two years out before you pull the trigger.

7. Your estate plan may be built for rules that no longer apply

If you did your estate planning in the past few years, you likely did it under the assumption that the federal estate tax exemption was about to be cut roughly in half. That didn't happen.

The One Big Beautiful Bill Act (OBBBA), signed in July 2025, permanently raised the federal exemption to $15 million per individual, or $30 million for married couples using portability.

For most families, that removes federal estate tax as a concern entirely. However, several states, including New York, Massachusetts and Oregon, still tax estates at thresholds far below the federal level, so you can owe a state estate tax with an estate nowhere near large enough to trigger the federal one.

If your plan hasn't been reviewed since the law changed, it's worth a checkup, both to avoid over-optimizing for a tax you no longer owe and to catch a state tax you still do.

8. Your retirement move may cost more than you think

If moving to a new state is in your retirement plan, the tax bill deserves the same scrutiny as the cost of the house. In addition to income tax, different states tax Social Security, pensions and retirement assets differently.

As of 2026, just eight states still tax Social Security at all: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont. The other 42, plus Washington, D.C., don't touch it.

Take a retired couple collecting $40,000 a year in Social Security and $30,000 from a 401(k). In a no-tax state such as Florida or Tennessee, none of that income is taxed at the state level.

In Colorado, retirees 65 and older can deduct all their federally taxed Social Security, so that part is sheltered, but the $30,000 in 401(k) withdrawals is still taxed at Colorado's flat 4.4% rate, about $1,320 a year.

In a state without that deduction, a meaningful share of the Social Security itself could also be taxed, adding hundreds more.

Picking a state based on weather or family without running the numbers first can mean paying more, or less, than expected, often by more than any fee you've ever paid on your portfolio.

The bottom line

It's important to keep an eye on your fees, but that work is mostly done. However, if you haven't reviewed your asset location, your Roth conversion timeline, your withdrawal order, your loss-harvesting opportunities, your Medicare exposure, your estate plan and your state tax footprint in the past year or two, that's almost certainly where your next real savings are sitting.

Unlike fees, tax efficiency isn't a one-time fix. The rules change, your income changes and your balances shift every year, which is exactly why this gets neglected.

Set aside one afternoon a year, ideally with your adviser and tax preparer in the same conversation, to go through this list. It will likely do more for your bottom line than any fund swap you make this year.

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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.

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

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

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

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

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

Here's an option: Fixed income

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

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

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

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

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

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

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

More bond trading

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

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

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

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

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

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

How to buy and sell fixed income, including Treasuries

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

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

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

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

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

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

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

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

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

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

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

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

ETFs that are unique

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Below are 10 retirement fixes worth considering.

1. Review whether Roth conversions make sense

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

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

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

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

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

2. Take advantage of available charitable tax benefits

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

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

3. Improve your tax location strategy

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

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

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

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

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

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

4. Maximize retirement account contributions

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

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

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

5. Reevaluate where excess cash is sitting

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

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

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

6. Become more tax-efficient in taxable accounts

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

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

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

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

7. Audit your mutual funds

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

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

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

8. Update your estate planning documents

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

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

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

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

9. Simplify and consolidate accounts

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

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

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

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

10. Don't forget to enjoy the money

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

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

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

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

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

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.

Everywhere you look, there's a monthly plan. TV, movies and music. Software and cloud storage. Meal kits, pet supplies, workout apps, even car features.

Subscription culture has moved from a niche corner of entertainment into everyday life, and that shift changes how we spend and save. Rather than asking, "Should I buy this?" we're asking, "Does it fit into my monthly budget?"

It's not just one industry either. Streaming platforms changed how we watch TV. Software as a service (SaaS) flipped how we pay for business software. Health and fitness apps rely on recurring fees. Retail has boxes for everything: Razors, snacks, skincare — you name it.

So how can you stay in control of your spending when subscriptions seem to make life so easy?

Why the subscription economy is booming

At its core, the subscription economy trades ownership for ongoing access, and that trade shapes spending. You pay a recurring fee, and the service keeps flowing. Think of content updates, software features, product deliveries and perks layered on over time.

It's built on predictable revenue for companies and personalized experiences for users.

The subscription model has also reshaped business operations. Instead of making long-term hiring commitments for every administrative need, some companies now subscribe to virtual assistant services to handle recurring administrative work.

This reflects the same shift toward predictable, ongoing service models that has transformed software and other subscription-based industries.

The numbers show just how fast it's grown. Companies in Zuora's Subscription Economy Index have experienced an 11% faster revenue growth rate compared to the broader economy (represented by the S&P 500) over the past two years.

Why does it land so well with people? Because it lowers the friction around spending.

For example, people who take regular medication can use online subscriptions for convenient access to consultations and deliveries, which they can pay for through a predictable monthly plan.

That convenience is a big reason subscription services continue to grow across many industries.

Impact on personal spending habits

There's an art to spending money, and subscriptions are part of that. Here's how they affect your personal spending habits.

The upside to subscriptions is predictability. You can plan for costs that hit on the same day each month. The downside is spending invisibility: Those small charges add up faster than we expect. One or two are nothing. Ten or 12? They start to crowd out real goals.

Autopay makes this easier to miss. You don't feel the pain of paying, so you keep the service around "just in case." That's different from a one-time purchase that you feel and remember. Annualized thinking matters here. A $12 subscription is $144 a year. Maybe worth it, maybe not.

There's also the broader budget picture. Recurring costs nudge us to build spending "floors" that keep rising. Add a new platform here, tack on a premium feature there, and total costs can escalate.

C+R Research suggests the average American now spends $219 each month on subscriptions.

Subscription creep happens. That's the disconnect between what you think you're getting from a subscription and how much you actually use it.

Subscription culture across key sectors

Media and entertainment. Streaming changed everything. We moved from buying albums and DVDs to paying for libraries we can dip into anytime. Deloitte's Digital Media Trends research shows people are juggling multiple subscriptions and regularly reconsidering lineups as content moves around and prices shift.

Tech and software. In software, the one-time purchase is nearly extinct. Everything from the tools we work in to the apps on our phones now runs on a subscription. It guarantees updates and continuous service.

However, it also means customers are effectively renting the essentials they once bought and kept forever.

Retail and consumer goods. Subscription boxes promise convenience and delight. Think of razors that show up before you run out, or coffee that lands on your doorstep.

For some, it's a time-saver. For others, it drifts into overconsumption. The best services now let you pause or skip.

Financial services. Fintech has entered the fray. Robinhood Gold is one example of a paid tier that bundles research and a high-yield cash program. Budgeting tools like these can pay for themselves if they help you save more than they cost. But they can also become another unexamined line item.

Potential downsides and consumer awareness

When everything is a subscription, fatigue sets in. It's not just the money. It's the mental load of keeping track. Companies that design smooth sign-ups but maze-like cancellations make it worse. The FTC has flagged these "dark patterns" and is pushing for click-to-cancel options.

A few practical ways to keep control:

• Make a subscription list. Consider what it is and why you have it. Factor in the monthly and annual cost and the renewal date.
• Review your online subscriptions. Check your app store and card-on-file portals (retail sites where you've stored your credit or debit card details) for hidden or inactive subscriptions.
• Have calendar reminders. Set them seven to 10 days before annual renewals or a trial.
• Rate usage monthly. Use a simple scale (0–3). Anything at zero or one for two straight months gets paused or canceled.
• Bundle intentionally. If you're already deep into an ecosystem, a bundle like Apple One can cut net costs compared with paying piecemeal.
• Rotate streaming. Keep two "must-have" services and a shortlist of "rotate-in" options. Make sure to switch monthly.
• Annualize everything. If the yearly total makes you pause, that's useful friction.

The bottom line

Subscriptions aren't going away. For many of us, they make life easier, and they can be a smart way to spread out costs. However, the same features that make them convenient can blur our view of what we're actually spending.

That said, take an hour to list what you pay for and what you truly use. Keep the services that pull their weight, and pause those that don't. Ultimately, every subscription should earn its place in your budget, month after month.

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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 most enjoyable aspects of retirement for married couples is finally having more time to spend together and the financial freedom to maximize those years.

That's possible because during their working years and into retirement, they've had a unified financial structure that's worked well — filing taxes jointly and budgeting based on their combined income.

But eventually, they must plan for the time when one of them is alone and make sure the survivor will be as financially protected as possible. Most married couples do not plan for that clearly enough.

When a spouse dies, the surviving spouse may still need much of the same income for the usual expenses — the house, property taxes, utilities, insurance, medical costs, family support and lifestyle.

But their tax structure changes, and they may be subject to the "widow's penalty" when their tax filing status changes from married filing jointly to single. Suddenly, tax brackets compress, the standard deduction changes and income that once fit comfortably inside a married tax structure may become more heavily taxed.

Picture a surviving spouse sitting at the kitchen table, looking at the same accounts, needing the same dignity but having less tax room to work with. No one wants to think about that. This is where many retirement plans fail emotionally, not just mathematically. They may protect the portfolio, but they do not protect the person who is left behind.

A new tax world for a surviving spouse — and its cascading effects

I remember when this issue first became real to me. It was years ago, when a longtime client — widowed a little more than a year — came into my office with her tax return and asked a question that seemed simple: "Why did my tax bill go up after my husband died?"

Her household income had gone down. Her husband's Social Security check was gone. Certain expenses had changed. Emotionally, she was still trying to adjust to life alone.

But financially, something did not add up. She had less income than before, yet her tax situation felt worse.

That is the widow's penalty. And once you understand it, you begin seeing it everywhere.

After one spouse dies, the surviving spouse often moves into a very different tax world. The tax code treats married couples filing jointly more generously than single filers.

• The brackets are wider
• The standard deduction is larger
• Medicare income thresholds are higher
• Long-term capital gains thresholds can be more favorable
• The net investment income tax (NIIT) threshold is also higher

For the 2026 tax year, a married couple filing jointly does not enter the 24% marginal income tax bracket until their taxable income exceeds $211,401 (the ceiling for that bracket is $403,550). But the single threshold is roughly half the joint threshold. A single filer for 2026 reaches the 24% bracket once taxable income exceeds $105,700 (up to $201,775).

The standard deduction compresses, too. For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. The surviving spouse may still have the same expenses and lifestyle needs they did when their spouse was alive, but has less tax room to absorb the income that funds them.

A surviving spouse may lose one Social Security check but typically keeps the larger of the two benefits. Pensions with survivor elections may continue. Required minimum distributions may continue. Portfolio income may continue. Rental income, annuity income and investment distributions may continue.

The survivor may end up retaining 70%, 80% or even 90% of the household income but lose the joint tax structure entirely.

For example, a couple with $140,000 of taxable retirement income may sit comfortably in the 22% bracket, but a surviving spouse with $115,000 of taxable income — less income than the couple had together — can suddenly be pushed into the 24% bracket. Over 15 or 20 years, the lifetime cost can become substantial.

Medicare adds another layer. For 2026, Medicare Part B IRMAA surcharges begin when modified adjusted gross income exceeds $109,000 for an individual, versus $218,000 for a married couple filing jointly. The premium is simply higher because income now lands on the single-filer scale.

That is where many widows and widowers get blindsided. They expected grief, paperwork and adjustment. They did not expect the tax code and Medicare rules to make retirement feel financially tighter at the exact moment life became harder.

How to use a Roth conversion efficiently

If you are already widowed and reading this, the situation is not hopeless. Meaningful planning may still be available. Roth conversions during widowhood can still make sense in some cases, even inside single tax brackets, if the alternative is allowing a large traditional IRA to compound into larger future RMDs.

Qualified charitable distributions (QCDs) can become powerful after age 70½. Asset-location changes, tax-efficient withdrawal sequencing and Medicare-income management can still reduce future drag.

But if you are still married, the best planning window may be before widowhood.

For many couples, the richest tax-planning window occurs after retirement but before RMDs begin. That may be five to 10 years, or sometimes less.

The core strategy often involves multiyear Roth conversion planning while both spouses are alive and still filing jointly. The goal is not to convert blindly but to use available joint brackets intentionally, reduce future tax-deferred concentration and give the surviving spouse more tax-free flexibility later.

The math requires discipline. Each year, evaluate how much traditional IRA money can be converted without creating unnecessary tax damage. You pay tax at known joint rates today to potentially reduce larger future taxable distributions later.

Repeat the analysis annually and stop when the math no longer supports it. Document the plan clearly so the surviving spouse is not left guessing.

The long-term care effect

Long-term care can destroy the planning runway.

Consider this scenario. One spouse becomes ill. The healthy spouse becomes the caregiver. Assets may be spent faster than expected. IRA withdrawals may increase. Roth conversion planning gets delayed. Tax planning gets pushed aside because the family is dealing with doctors, facilities, medications, stress and exhaustion.

Then, after months or years of care, the healthy spouse becomes the surviving spouse and may inherit a weaker financial structure with fewer clean choices.

Wade Pfau, author of the Retirement Planning Guidebook and a professor at The American College of Financial Services, has described long-term care as one of retirement's most unpredictable risks.

The cost data explains why. CareScout's 2025 Cost of Care Survey reported national median annual costs of $74,400 for assisted living, in excess of $114,000 for a semi-private nursing home room and more than $129,000 for a private nursing home room.

Those are not just care costs; they are tax-planning costs. If the money comes from an IRA, the withdrawal may create taxable income. If that income pushes the household across Medicare thresholds, the cost can compound.

If the healthier spouse is left with fewer assets and less flexibility afterward, the widow's penalty becomes more painful.

IRAs and 401(k)s: A structural blind spot in retirement planning

IRA guru Ed Slott, founder of IRAHelp.com, has spent years warning that tax-deferred retirement money is not tax-free money. That warning becomes especially relevant here. The surviving spouse may inherit the same IRA or 401(k) balance, but under compressed single-filer brackets.

The mistake is not having an IRA or 401(k). The mistake is assuming they behave the same way after the first spouse is gone. They do not.

If you are wondering why this may not already be in your plan, the answer is not necessarily that anyone has been negligent. For three primary reasons, the widow's penalty sits in a structural blind spot across much of retirement planning.

• Many plans focus heavily on the retirement date, not the surviving-spouse phase.
• Most people do not enjoy a planning conversation that says, "Pay taxes voluntarily today to potentially reduce a larger tax problem later." Not having the conversion often feels better in April. It may feel much worse 10 years later.
• Many reviews are organized around investments, not the household tax structure after the first death.

Understand the potential stakes. The table below is only a simplified illustration. It assumes the surviving spouse retains a high percentage of joint retirement income, which can happen when income is driven by pensions, RMDs and portfolio distributions rather than mostly by Social Security.

These estimates may include federal income tax and Medicare surcharge effects. They do not include state income taxes, the net investment income tax or other household-specific factors. The point is not that every household will match the table but that the annual cost can become a six-figure lifetime issue if it persists for 10, 15 or 20 years.

A surviving-spouse tax map

Married couples with meaningful IRA balances, pensions, taxable investment income, deferred compensation or future RMD exposure should not guess. The next practical step is specific: Ask for a surviving-spouse tax map.

That map should show, in dollars, what happens to income, taxes, Medicare premiums, IRA withdrawals and cash flow after the first spouse dies.

A useful version of that analysis can often start with last year's joint 1040. Run the same income through the single-filer tax structure, compare the result and then project the difference over 10 to 20 years with RMDs, Medicare thresholds and Roth conversion options included.

If the exposure is small, you should know that. If it is large, you should know that, too, while both spouses are still here, while both can still make decisions together and while the cleanest planning years may still be available.

The window closes a little further with every tax year that passes. You should at least know what is inside it.

Dan Dunkin contributed to this article.

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

Related Content

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• The Financial Effects of Losing a Spouse
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• Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
• Your Retirement Plan Looks Watertight, But Have You Checked for Tax Leaks?

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

The debate about whether Americans should be allowed to hold private-market assets in their retirement accounts has, once again, produced more heat than light.

Critics of recent proposals to open 401(k)s to alternatives such as private equity, private credit and real estate warn of systemic risk and suggest that ordinary savers can't be trusted with anything more complex than an index fund. They're solving the wrong problem.

The question has never been whether Americans should have access to alternatives in their retirement accounts. Under existing tax law, they already can. Self-directed IRAs and Solo 401(k)s have permitted investments in real estate, private equity, private credit, precious metals and digital assets for decades. The infrastructure exists.

What Congress has done

The legal framework was settled in 1974. When Congress created IRAs and 401(k) plans under ERISA, it deliberately chose to allow retirement accounts to be invested in both traditional and alternative assets.

That was not an oversight. Congress could have easily restricted retirement vehicles to conventional holdings, as it later did with 529 education savings plans. It chose not to.

Pension plans, endowments and individual retirement investors were meant to have the ability to diversify across asset classes. That original intent has never changed.

The real question is whether we extend that access responsibly to everyone or continue reserving it for those wealthy enough to know it exists.

That's the two-tiered system critics should be concerned about. Today, institutions and high-net-worth investors allocate heavily to private markets, capturing illiquidity premiums, diversification and long-term return profiles that public markets increasingly can't offer.

Who gets to access what

For years, Yale's endowment, the model every sophisticated allocator studies, has invested more than 60% of its portfolio in alternatives.

Meanwhile, ordinary retirement savers get a menu of mutual funds and target-date vehicles, most anchored to the same handful of large-cap tech stocks. The diversified portfolio is already available. The question is who gets to access it.

This concentration risk is not theoretical. American retirement investors exclusively in traditional assets are, in practice, not well diversified. Their life savings are heavily exposed to a narrow set of equities, and that concentration is far riskier than a portfolio that includes a measured allocation to alternatives.

The argument that alternatives introduce undue risk ignores the risk already embedded in a retirement account that rises and falls with a handful of stocks.

In 2022, the market made this imbalance impossible to ignore. Stocks and bonds declined simultaneously, exposing the structural vulnerability at the heart of the traditional 60/40 portfolio.

In a high-inflation, rising-rate environment, fixed income lost its cushion precisely when investors needed it most. Alternatives, real estate, private credit and hard assets held value. The investors who owned them were protected. Everyone else absorbed the full impact.

This doesn't imply that a free-for-all is the way. Structured access allows us all the best path forward.

Access with guardrails

Everyday retirement savers should have access to professionally managed, fiduciary-governed exposure to private markets, with clear guardrails around fees, liquidity, custody, investor education and suitability.

The concern that unsophisticated investors will be handed illiquid, higher-fee private equity funds with no understanding of what they own is legitimate. The answer to that concern is smarter regulatory frameworks, not a blanket prohibition.

It's also worth noting that retirement accounts might be among the most appropriate vehicles for alternative investments. Retirement funds and 401(k) plans are generally locked up for years or decades. That illiquidity is a feature, not a flaw.

Many alternative assets — private equity, real estate, hedge funds — share that same long time horizon.

Investors who hold illiquid alternatives in retirement accounts are positioned to capture the illiquidity premium and patience premium these assets typically generate, the higher returns that compensate long-term holders for forgoing liquidity.

A natural alignment

The structure of a retirement account and the structure of a private market investment are, in many respects, naturally aligned.

The accredited investor rules that already exist provide meaningful guardrails for investors seeking exposure to alternatives outside retirement accounts. Those rules serve an important function, and there is a strong case for the SEC to expand the definition of accredited investor to allow more Americans access to private markets and better diversification.

But those guardrails aren't an argument for keeping alternatives out of retirement accounts entirely. They're evidence that thoughtful, structured access is achievable. That same spirit of structured access can and should extend to the broader retirement market.

Complex rules with thoughtful integration

Building successful self-directed platforms requires thoughtfully integrating complex tax and ERISA rules into systems and processes that investors, advisers and planners can use confidently and effectively in the long term.

Compliance isn't an obstacle to access. It's what makes access durable. Prohibited transaction rules, disqualified person restrictions, custody requirements, reporting obligations — these aren't bureaucratic annoyances.

They're the guardrails that keep the system honest. The right policy goal is to extend those guardrails to the broader 401(k) market, not to wall off private markets entirely and call it protection.

The Department of Labor's recent proposal to provide plan fiduciaries a clearer safe harbor for adding certain alternative assets to 401(k) lineups is a meaningful step in this direction.

Plan sponsors have long avoided alternatives not because they're inherently inappropriate but because the legal exposure of offering them was unclear

A safe harbor built around diversification, fee transparency and liquidity requirements doesn't invite abuse. It eliminates ambiguity and legal uncertainty. That's how you expand access without abandoning responsibility.

Protection vs preservation

Critics who argue alternatives don't belong in retirement accounts are, in practice, arguing they should remain exclusive to those wealthy enough to access them elsewhere.

That's not a protection argument. It's a preservation argument, preserving a system in which the sophisticated investor has options, and the ordinary saver does not.

Americans deserve a retirement system built for the economy they actually live in, not the one that financial institutions find easiest to administer.

That means access to a broader opportunity set, delivered through structures that protect investors rather than simply exclude them. It means fiduciary oversight without fiduciary paralysis, and better rails rather than narrower choices.

The debate is not about whether to protect retirement savers. Everyone agrees they should be protected.

The debate is about whether protection requires keeping them permanently locked out of the same assets that have built generational wealth for institutions and individuals who already have enough. It does not.

The work is building the infrastructure that makes broader access safe. With that work well underway, it's time that policy catches up.

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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 being billed by the hour for professional services, now is the time to renegotiate, as AI has put the billable hour on life support.

In January 2024, during his recuperation from surgery and radiation treatment of thymoma — an extremely rare cancer — Los Angeles-based attorney Aaron Shechet, "wanted to do something for my wife and law partner, Leigh, who proved what being there 'for better or for worse' means. She said, 'Make an app that helps me bake better sourdough.'

"So I built an app to take pictures of her sourdough bread — AI analyzes the picture and tells how to improve it. It came out so good that I released it on Android and Apple."

Then an idea came to Shechet. "What if I could develop a platform that helps service providers, accountants, lawyers and other professionals use AI programs that would save them hours and result in significant cost savings to their clients?"

Veilgrid was the result. "It is a platform that creates custom AI-powered tools tailored to specific business activities," he notes, "such as drafting contracts, leases, various sorts of documents and automating related office functions, saving upwards of 75% of the time required to do the same work manually."

AI impacts professionals and their clients/customers

Shechet has been a mediator and fee arbitrator in Los Angeles for years, and he has impressed me with his concern for clients trapped in billable-hour spirals. He sees a tsunami coming to those professions that view efficiency as their mortal enemy.

"Billable hours reward lawyers, accountants, management consultants — to list just a few — for spending more time on a task," he says. "Faster work — efficiency — directly reduces total revenue, as you can't bill a whole lot of hours.

"With AI, the incentive is to be more efficient, as you will invoice on the completion of work, not the hours to do the work."

He adds, "Clients do not care how the final product was produced — they just want results, the more economical the better. And they know that AI saves an enormous amount of time in producing reproducible items, such as contracts, leases, tax returns and so much more."

A new standard of care

Shechet strongly believes that the new standard of care for law and other professions, figuratively speaking, will be a $5 charge with "AI quality," instead of hundreds of dollars an hour with potentially less quality.

"What clients pay must come down," he says. (For the record, AI is wrong sometimes, so someone still needs to check the work to make sure it's accurate.)

He lists tasks where AI is most effective in law that would take hours to do manually and cost clients hundreds to thousands of dollars:

• Anything written, including contract drafting, pleadings, motions and discovery
• Summaries of depositions for senior partners that can be generated in minutes
• Legal research that requires dramatically reduced time
• Tasks that once took teams of junior associates weeks can now be completed by a single attorney in a few hours or even seconds

AI also works 24 hours a day. It doesn't have student loans or employment insurance, it doesn't complain, and it doesn't face employee lawsuits.

New billing methods

Shechet and many other observers expect to see subscription models where a lawyer, accountant or other professional is on call to handle all the matters a client needs for a flat monthly fee.

"We should also see more per-job and contingency fees," he notes, adding, "AI is no longer in the experimental stages for many professions. It is being widely adopted. Clients need to ask their lawyers, accountants and other professionals who bill by the hour, 'Are you using AI to save me money? And if not, why not? Why does this professional service cost so much?'"

What's the impact on lawyers?

I asked Shechet what impact AI will have on the human side of the legal profession.

"There will be little justification," he says, "for massive law firms — that have been compared to pyramid schemes — to reward senior partners while demanding impossible 2,000 yearly billable hours from junior lawyers. That (practice) has invited decades of bill-padding and outright fabricated work and destroyed marriages and families.

"The need for lawyers will shrink, and hopefully, the ability to go home at 5 p.m. and have dinner with the family and have a life will return to the legal profession."

For anyone considering law as a career

Shechet cautions that law can no longer be recommended as a safe, automatic path to a high-income career.

"But if law is pulling you, go for it. Follow your instincts, but do not expect the profession to look the way it did 20 years ago. Veilgrid came from following what presented itself: I built it for our practice, then other lawyers, then other professions, and finally, it became a platform.

And he cautions, "Anyone considering law should think very carefully about debt. Do not borrow an enormous amount of money because this seems like a safe profession. The supposedly safe, predictable part of legal work is exactly the part AI is commoditizing most quickly."

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.

For many adult children, one of the hardest conversations to have is with their parents about finances.

• Do Mom and Dad have updated estate documents?
• Who would make financial or health care decisions if one of them became incapacitated?
• Where are the accounts, insurance policies, passwords and key documents?
• Have they thought about whether they want to age in place, downsize or move closer to family?
• Are they vulnerable to scams?
• Is one spouse carrying all the financial knowledge while the other remains largely uninvolved?

These are practical questions. But inside a family, they rarely feel that way.

For parents, the conversation can feel like a threat to independence. For adult children, it can feel like overstepping, prying or implying that a parent is no longer capable.

Add sibling dynamics, second marriages, privacy concerns and years of family history, and it's easy to understand why so many families avoid the conversation altogether.

The problem is that silence doesn't preserve independence. In many cases, it puts it at risk.

When families wait until a health event, cognitive issue, hospitalization, death of a spouse or financial emergency forces the conversation, decisions often must be made quickly, emotionally and with incomplete information.

Adult children might not know where assets are held, whether estate documents exist, who the attorney is, how bills are paid or what their parents wanted.

A better approach is to reframe the conversation entirely. This is not about taking control. It's about helping parents remain in control for as long as possible and making sure their wishes are known, documented and respected.

Start with values, not account balances

One of the biggest mistakes adult children make is starting with the numbers.

"How much money do you have?" or "Where are all your accounts?" might be well-intentioned, but those questions can feel invasive. A more productive entry point is to start with values, preferences and peace of mind.

For example:

• "I don't need to know every financial detail, but I want to make sure I would know how to support you if something happened."
• "If there were ever a medical emergency, I would want to be certain I was helping make decisions in the way you would want."

This shifts the tone from investigation to support. It also makes clear that the goal is not to take over, but to understand the plan.

In my experience, families make more progress when the first conversation is about wishes.

• Where do your parents want to live if their health changes?
• Who do they trust to make medical decisions? Who should be contacted first in an emergency?
• What would comfort, dignity and independence look like to them?

Those answers can open the door to the more technical planning that needs to follow.

Consider a scenario we see more often than families expect. A spouse passes away after decades of careful saving. He was an electrician who built nearly $3 million through discipline and frugality, but managed everything himself.

The surviving spouse discovers accounts scattered across multiple banks, IRAs she can't access, missing passwords and a life insurance policy with no instructions on how to claim it. She doesn't know what her income will be, how to manage the investments or even how to pay the electric bill.

He meant well. But what he intended as good stewardship became an avoidable burden for the person he loved most.

That is what this conversation is really about.

Make the conversation smaller

Another common mistake is trying to solve everything at once.

Aging, estate planning, long-term care, digital access, beneficiary designations, powers of attorney and family roles are too much for one discussion. When adult children try to cover every topic in a single sitting, parents can feel overwhelmed or defensive.

Instead, think of this as a series of smaller conversations.

• "Do you have the right documents in place, and does someone know where they are?"
• "Have you thought about where you would want to live if staying in the house became difficult?"
• "Would you be comfortable introducing me to your adviser, attorney or accountant so I know who to call in an emergency?"

Smaller conversations reduce pressure. They also make the topic feel like part of normal family life rather than a one-time intervention.

Focus on organization before decision-making

Many families don't realize how much stress can be avoided simply by getting organized.

At a minimum, every aging parent should consider creating a central financial life organizer. This doesn't have to include every dollar amount, but it should tell trusted family members where to find essential information if needed.

That might include:

• A list of financial institutions and account types
• Retirement accounts, pensions and Social Security information
• Insurance policies, including life, home auto and long-term care
• The location of wills, trusts, powers of attorney and health care directives
• Names and contact information for the financial adviser, CPA, estate attorney and insurance professionals
• Mortgage, property tax, utility and recurring bill information
• Beneficiary designations and trusted contacts
• Key digital accounts and legacy access instructions

This kind of organization can be especially important when one spouse has historically managed the household finances. The surviving spouse might be fully capable, but if he or she does not know where things are, who to call or how bills are paid, the transition can become unnecessarily stressful.

A financial life organizer isn't just an administrative tool. It's a gift to the people who might one day have to step in.

Be careful with the word 'help'

Adult children often say, "I just want to help." Parents often hear, "You think I can't handle this anymore."

That disconnect can derail an otherwise important conversation. A better approach is to ask permission.

• "Would it be helpful if we sat down together and made sure everything is organized?"
• "Would you be open to walking me through who I should contact if there were ever an emergency?"
• "Would it give you peace of mind if we made sure your documents and beneficiaries still reflect your wishes?"

The difference is subtle but important. Asking permission preserves dignity. It allows parents to remain the decision-makers.

Bring in the right professionals

Some families are comfortable having these conversations on their own. Others benefit from involving a neutral professional.

A financial adviser, estate attorney, elder law attorney, CPA or geriatric care manager can help separate the emotional family dynamics from the technical planning. They can also help identify gaps that family members might not know to look for.

For example, an estate plan might exist, but beneficiary designations on retirement accounts or life insurance policies may be outdated.

A parent could have a power of attorney, but the named agent might no longer be the right person.

A parent might want to age in place, but the home could need modifications, additional support or a plan to fund future care.

The right professional team can help families move from vague concern to specific action.

Don't ignore fraud and exploitation

Another reason these conversations matter is financial safety.

Older adults are frequent targets for scams involving fake government agencies, tech support schemes, romance scams, grandparent scams and urgent requests for money. The most dangerous scams often involve fear, secrecy and pressure to act immediately.

Families can create a simple rule: No major financial decision, wire transfer, unusual payment or urgent request should be acted on without first speaking to a trusted family member or adviser.

That rule can prevent significant financial harm.

Keep the conversation going

The goal is not to have one perfect conversation; it's to normalize the topic.

Plans change. Health changes. Laws change. Family dynamics change. Documents that were appropriate five years ago might no longer reflect a parent's wishes today.

A brief annual family check-in can help keep everyone aligned. It doesn't need to be formal, and it does not require parents to disclose every financial detail. But it should confirm that key documents are current, trusted contacts are still appropriate, family members know who to call, and parents' wishes are understood.

The families that navigate aging and wealth transitions best are not the ones that avoid hard conversations. They're the ones that learn how to have them with respect, patience and love.

Talking to parents about money doesn't have to mean taking away their independence. Done well, it can do the opposite, preserving their voice, protecting their dignity and giving the entire family greater confidence about the road ahead.

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

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

Whenever I meet with new investors, one of their first questions is, "What are your fees?"

While this might seem like a natural question, it's often misguided and asked too early in the process. Before you ask about an adviser's fees, you should first want to know what services they can provide.

When I was in college, I ran a house-painting franchise. Every spring, homeowners would collect bids and try to decide who to hire. This is when I discovered that a price is comparable only after you define the job.

One painting crew might scrape, sand, prime, caulk, protect landscaping and do two coats, with a written warranty. Another might spray on a quick coat and disappear.

If all customers did was compare two quotes that were only a couple of hundred dollars apart, they weren't comparing value; they were merely comparing the costs of vastly differing services.

Choosing an investment professional works the same way. As one SEC article notes, "Just as a grocery store offers more products than a convenience store, some investment professionals offer a wide range of products or services, while others offer a more limited selection."

The key is to work with one that fits you well and can deliver advice specific to your needs and wants.

So instead of leading with a question about fees, here's the sequence that makes fees meaningful and helps you avoid paying for the wrong thing.

1. Name the job

One of the biggest mistakes people make when seeking financial advice is failing to clearly define what they need.

When I ask someone what they want from an adviser, the answer is often something vague like "to do better," "to get the highest rate of return" or "to make sure I'm on track for retirement." Those are ambiguous goals, not a clear job description.

Before you compare advisers, decide what problem you want solved. Do you need:

• A one-time second opinion?
• A written, comprehensive and holistic financial plan that connects retirement income, taxes and investments?
• Ongoing portfolio management?
• A "quarterback" relationship where one adviser helps coordinate investing, tax strategy and estate planning?

2. Understand what the adviser does for you

If you walk into a meeting and ask an adviser, "What are your fees?" and they say, "1%," what exactly does that number mean? What will you compare it to? Another adviser might also say 1%, but the two of them could provide completely different services.

One might be building a comprehensive, written retirement plan, coordinating tax strategies, helping with estate considerations and managing your investments. Another might simply be recommending funds from a menu their company provides.

The price might be identical, but the work behind it could be completely different. The depth and breadth of each adviser's capabilities would, in many cases, yield vastly disparate results.

If you only compare the cost, you may think you are comparing identical services when you are not. That is why the better question early in the conversation is not, "What do you charge?" but, "What exactly do you do for clients like me?"

Once you understand the services, the process and the expertise being offered, the fee discussion finally has context. And that is when you can decide whether the price is fair for the value being provided.

3. Determine adviser licensing, designations and background

Knowing what licensing and certifications your prospective adviser carries is critical to differentiating between professionals you may wish to engage. A narrow range of licensing may indicate both limited experience and limited access to industry products, services or strategies.

Also, certifications, such as the CERTIFIED FINANCIAL PLANNER® designation, may indicate the extent of training, depth and professional standards your practitioner brings to the table.

This can come into play when you notice an adviser does not use or recommend (or even denounces) certain financial instruments, which they are also conveniently not licensed to recommend or provide.

Unless you are aware of their licensing and certification, or even company affiliation, you may not be able to determine whether the advice you are seeking may have significant limitations.

The SEC's Investor Bulletin on using Investor.gov's Investment Professional Search tool suggests always researching an investment professional, including confirming registration and checking for disciplinary events, before deciding to work with them.

If your professional is licensed in the brokerage business, you can also use FINRA BrokerCheck. It's a free tool to research the professional backgrounds of investment professionals and firms.

You're not hunting for "gotchas." You're looking for patterns — repeat customer complaints, repeated job-hopping or disclosures that don't match the story you're being told. If you find something you are curious about, make sure you ask the adviser about it.

Ask for the documents that put fees and any conflicts of interest in writing. If an adviser is truly transparent, they'll gladly show you the paperwork that regulators care about.

If you'd like a ready-made interview script, the SEC's "Questions to Ask when Hiring an Investment Professional" bulletin includes practical questions that turn fuzzy conversations into measurable answers.

4. Now talk fees

Only after you've defined the scope and read the disclosures does "What are your fees?" become a useful question.

Since fees that look small can still have a major impact over time, ask what you will pay in year one and what you'll pay in a typical ongoing year.

Then ask what you can expect for those dollars, such as meeting cadence, written deliverables, tax coordination, rebalancing discipline and how recommendations will be documented.

Making better decisions

The real goal isn't simply to find the lowest fee. It's to find the right experience, the right process and the right fit for the problem you're trying to solve.

Once you know the job, understand the services and confirm the credentials, the conversation about price finally becomes meaningful.

When you follow this order, you don't just get clearer answers about fees. You make better decisions about the advice itself, and that's what ultimately protects your money and gives you clarity about your financial future.

Ezra Byer contributed to this article.

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

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

For many Americans, there's a disconnect between what's happening on Wall Street and how they're feeling about their personal finances.

The markets have remained resilient despite periods of volatility. But many people nearing retirement are worried about whether their money will last.

Much of that anxiety stems from inflation, which, for the first time in three years, is now outpacing wages.

That's why retirement planning shouldn't focus on cutting expenses, but rather on building a flexible income plan that can absorb higher costs over time.

Start with net income, not gross salary

Most people think they need to replace their full working salary when they retire. That's not necessarily true.

It's not just about replacing a paycheck. You need to replace the net income that supports your life today while accounting for some expenses that may go away or change in the future.

Instead of gross salary, start with your current net income. This will help you determine what you spend. Add up how much money is coming in each month and compare that to how much is going out.

Once you know what your income needs are, you can determine whether your current assets are enough, whether your retirement timeline needs to shift or whether your investment strategy should be adjusted.

Add a lifestyle and inflation cushion

One of the most overlooked tools to help combat inflation in retirement is the travel budget. Most retirees spend more on travel during the first part of their retirement and then gradually reduce that spending, whether that's owing to poorer health or simply wanting to spend more time around family.

Instead of viewing travel as a temporary expense, think of it as a built-in financial cushion for your retirement. An amount as small as 10% can provide flexibility if inflation rises faster than expected.

While that money may go toward dream vacations, new hobbies and experiences early in retirement, later on, those same dollars can be reallocated toward healthcare costs or other expenses.

Retirement spending categories shift rather than disappear. Because you know the money is there, the travel budget becomes less about leisure and more about being the buffer you need to feel confident in your plan.

A built-in buffer also helps retirees avoid overreacting to temporary market drops or cost increases.

Build the income plan around the gap

Retirement planning isn't only about how much you have saved in your portfolio. $1 million may be more than enough for one retiree but not enough for another. Your retirement depends on spending needs, income sources and your unique timeline.

Once you calculate your expected spending and account for guaranteed income sources such as Social Security or pensions, you can then identify the investment gap.

Your investment decisions should support your income needs. The strategy should be based on what you need your money to accomplish.

While some people may find out they need to work a few more years, many of the people we work with at Blue Ridge Wealth Planners are actually surprised to learn they may be able to retire sooner than expected. Income planning helps you make retirement decisions based on facts, not fear.

In conclusion

Unfortunately, inflation isn't something that you can avoid. It's always going to be a factor that you must account for when planning your retirement, but you don't have to let it eat away at your hard-earned savings. Remember:

• Inflation-proofing your retirement isn't just about investment returns
• It starts with realistic income planning and creating built-in cushions
• You then identify income shortfalls and fill in the gaps

Retirees who create room in their plan through travel budgets or spending cushions are often better positioned to handle rising costs. They can then enjoy a fulfilling and financially confident retirement.

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

"John" called me on a Tuesday. He had just accepted an offer on a strip center he had owned for 26 years. He was happy about the price and miserable about everything else.

He did not want to find another building. He did not want to sign another lease, chase another tenant or fix another roof. What he wanted, in his words, was to never get another midnight phone call about a toilet.

Somebody had told him about a Delaware Statutory Trust (DST). He did not know what it was. He only knew it was supposed to make his problem disappear. By the end of our call, I told him a DST might be exactly right for him. I also told him that if one detail had been different, it would have been exactly wrong.

That is the honest truth about DSTs. They are a wonderful tool for the right person and a poor fit for the wrong one. The trouble is that most of the people selling them only describe the right person. So before you exchange a dime, sit with these five questions.

1. Are you actually done being a landlord?

Not tired. Done.

There is a difference. Tired is Saturday morning after a bad week. Done is a decision. You give up control completely. The sponsor makes every decision about the building, the financing, the tenants and the eventual sale. You collect monthly distributions and you wait. You cannot vote on a roof. You cannot fire the manager. You cannot decide to sell next spring because you found something better.

For the man with the strip center, that loss of control was the entire point. He had been the manager for 26 years and he was finished. For the next person, that same loss of control is a cage. If part of you still loves the hunt, the negotiation, the ownership, a DST will frustrate you. Be honest about which person you are.

2. Do you meet the DST accredited investor requirements?

Most DSTs are offered through private placements generally limited to accredited investors. The current thresholds are a net worth above $1 million not counting your home, or income above $200,000 a year as an individual, or $300,000 jointly with your spouse, in each of the last two years with the expectation of the same this year.

Most people selling an appreciated property clear this bar without thinking about it. But you have to actually meet it and be able to document it. If you cannot, the door does not open and no adviser can open it for you.

3. Is your money big enough to spread out, but not so big you should buy a building?

Most DSTs set a minimum investment between $25,000 and $100,000, depending on the offering. The properties themselves are large, often $30 million to $100 million, which is how a single investor ends up owning a sliver of an apartment complex or a distribution center they could never buy alone.

Here is the sweet spot. If your 1031 exchange proceeds are large enough to split across several DSTs, you get something a single replacement building can never give you: Diversification.

You can own a piece of an apartment community in one state, a medical building in another and an industrial property in a third, all inside one tax-deferred exchange. One bad tenant no longer ruins your year.

But there is a ceiling to the logic. If you are exchanging a very large sum and you genuinely enjoy ownership, buying your own replacement property may still be the better answer.

A DST trades control for convenience. The more capital you have, the more that trade is worth examining rather than assuming.

4. Do you understand DST illiquidity and are you at peace with it?

This is the question people skip and the one that causes the most regret.

A DST is not a stock. You cannot sell it next Tuesday because you changed your mind or because you need the cash. There is no real secondary market to speak of.

Your money is committed until the sponsor sells the underlying property, which typically happens somewhere between five and 10 years out, on a timeline you do not control.

If everything you are putting into the DST is money you will need to touch in the next few years, stop. This is the wrong vehicle. A DST is for capital you can leave alone.

Before anyone exchanges, I want to see that the rest of their financial life is liquid enough that locking up this piece does not keep them awake at night.

5. How does this fit your estate plan?

This question matters because the answer can change the whole calculation, and most people never get to it.

If the goal is income and simplicity for the rest of your own life, a DST can deliver both. But think one step further. Under current law, when you die, your heirs generally receive a basis adjustment that can eliminate the deferred capital gain for income tax purposes.

The gain you carried for years does not have to pass to them as a tax bill. The DST interest transfers at its value on the day you die, and the embedded gain can be wiped clean.

That single feature changes the math for a lot of families. A property you might have been afraid to sell because of the tax can be exchanged into a passive, diversified DST, held for income while you are alive, and then handed to your heirs without that gain following them.

If your spouse or children are part of the plan, a DST is not just an exit. It is part of an estate strategy worth discussing with your adviser and your estate attorney before you commit.

A word on DST investment risks

DSTs draw their tax treatment from IRS Revenue Ruling 2004-86, which lets you exchange real property for an interest in a DST without recognizing gain under Section 1031, provided the other 1031 requirements are met.

That treatment comes with a set of strict requirements, also known as the Seven Deadly Sins, and one of them matters most to you: Once the offering closes, the sponsor generally cannot raise new money or restructure the financing. If the property runs into trouble, the trust's hands are largely tied.

That puts enormous weight on one thing: Who the sponsor is. A DST is only as sound as the company managing it and the building underneath it. Distributions are not guaranteed. Real estate values can fall. Some sponsors have run into serious trouble, and their investors had little recourse.

Anyone who tells you a DST is safe is selling, not advising. The right question is not whether DSTs are safe. It is whether this specific property, run by this specific sponsor, at this specific price, is worth your money.

So, is a DST right for you?

Go back to John, the man with the strip center. He was done being a landlord, he was accredited, his proceeds were large enough to spread across three properties, he had plenty of liquidity elsewhere and he wanted what was left to pass cleanly to his daughter. Five for five.

For him, the decision to invest in a DST was close to perfect, and that is exactly what we did.

If you answered those five questions the way he did, a DST may be one of the best decisions you make in retirement.

If you stumbled on even one of them, that is not a reason to give up. It is a reason to slow down and look harder, because the wrong DST is far more expensive than no DST at all. The vehicle rarely fails those investors. The question they skipped does.

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• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes

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

Investors continue to hope for signs of progress as negotiations between the United States and Iran have broken down. The logic is straightforward: A peace agreement could reduce geopolitical risk, lower energy prices and reduce concerns about disruptions to the Strait of Hormuz. This should all be good news for the broader stock market.

Perhaps.

But I suspect many investors are focusing on the wrong takeaway.

The more interesting question is whether the conflict permanently changes how countries approach energy security.

Think about COVID-19 and the way it transformed global supply chains. For decades, companies optimized for efficiency. The pandemic then exposed the risks of depending on a single supplier or a single region.

"Just in time" became "just in case." A movement toward diversifying suppliers, reshoring production and prioritizing resiliency soon followed.

I expect energy will follow a similar path.

If recent events encourage governments and energy companies to place a greater value on resiliency and dependability — even when it comes at a higher cost — I believe the setup for oilfield service stocks may be more attractive than many investors realize.

How has the oilfield service industry changed?

Oilfield service companies provide the technology, equipment, expertise and manpower needed to find, drill, complete and maintain oil and gas wells. Whether an energy company is developing a new offshore field, maximizing production from an existing reservoir or repairing aging infrastructure, oilfield service companies are often central to the process.

Historically, the industry developed a reputation as one of the market's ultimate boom-and-bust sectors. When oil prices surged, producers rushed to drill more wells. When prices collapsed, spending dried up almost overnight. Service companies were often caught in the middle.

That history is real. But the oilfield service industry today is very different from the one many investors remember.

The three dominant players are SLB, Halliburton and Baker Hughes.

• SLB (SLB) is widely regarded as the industry's technology leader and has the deepest international footprint
• Halliburton (HAL) is perhaps best known for its leadership in hydraulic fracturing and remains the most direct way to gain exposure to North American shale activity
• Baker Hughes (BKR) has differentiated itself through growing exposure to liquefied natural gas, power generation and other energy technology

While each company has different strengths, all three stand to benefit from a world that increasingly values dependable energy supply.

This opportunity comes at a time when energy producers themselves have changed quite a bit. A decade ago, many exploration and production companies prioritized production growth above all else.

Today, shareholders are demanding capital discipline, free cash flow and returns. That shift may not generate the explosive growth that once characterized energy upcycles, but it could also result in a less extreme boom-and-bust cycle for service providers than investors experienced in the past.

Why should investors be optimistic about the sector?

The first reason I am optimistic about the oilfield service industry's long-term prospects is straightforward: The world still needs enormous amounts of oil and natural gas.

That may sound obvious, but investors continue to underestimate how difficult it is to replace existing energy infrastructure. Even as renewable energy grows, economies remain heavily dependent on fossil fuels and the countless products derived from them. The Iran conflict served as a reminder of that reality.

The second reason is that energy security is becoming more important.

For years, many countries focused primarily on securing the cheapest energy available. Going forward, some may place greater emphasis on securing energy from dependable partners and politically stable regions.

That shift could encourage development in areas that previously looked less attractive economically but offer strategic advantages.

More development means more drilling. More drilling means more demand for oilfield services.

The third reason is international growth.

Many investors instinctively think about U.S. shale when they hear the word "oil." Yet some of the most attractive opportunities for service companies may be found overseas.

International and offshore projects are often larger, more technically demanding and more service-intensive than their North American counterparts. They also tend to be driven by long-term development plans rather than short-term commodity price movements.

That plays directly into the strengths of the industry's largest participants.

Where are the opportunities?

Venezuela offers an interesting example.

Recent agreements involving Shell (SHEL) and BP (BP) suggest international energy companies see potential in bringing portions of the country's vast energy resources back into production.

After years of underinvestment and deteriorating infrastructure, doing so would require extensive technical expertise, well rehabilitation, equipment upgrades and project management — the exact types of services oilfield service companies provide.

Importantly, investors do not need Venezuela to become a success story for this thesis to work. Nor do they need oil prices to surge.

That is what makes the opportunity interesting.

The investment case does not depend on a single country, a single conflict or a single commodity forecast.

Oil and gas fields naturally decline over time. Existing infrastructure must be maintained. New projects must be developed. Production must be optimized.

The world needs energy today and will need enormous amounts of energy for years to come.

Some investors spend a tremendous amount of time trying to predict where oil prices will go next. I believe a more productive exercise is identifying the companies that help make energy production possible, regardless of where oil trades next month, and considering what recent events may mean for energy security over the next decade.

Oilfield service stocks are increasingly removed from the cyclical industry of the past that was tied to the next move in crude oil.

Here's the more durable reality: The world needs dependable energy, and oilfield service companies may play a critical role in making that possible.

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• I'm an Investment Pro: This Is Why Gold Isn't Shining Right Now (Plus, an Alternative That Is)

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.

Each April, Americans, or someone they hire, work through income tax forms, fill in totals from their financial records and send the results to the IRS.

The goal is usually simple: Pay as little to the federal government as legally possible so you can keep more of your hard-earned money.

But what if paying more in taxes today could leave you with more money tomorrow? What if voluntarily paying additional taxes now could reduce the amount you and your family pay over your lifetime?

Opportunities like these are rarely discovered while filling out tax forms in April. Effective tax planning must be part of a broader retirement strategy that considers income sources, future tax rates, healthcare costs, estate planning goals and the rules governing retirement accounts.

Many people use Roth conversions to reduce their lifetime tax burden. While the objective is often to pay less tax over the long run, the process often results in paying more tax in the short run, but that may be exactly what your long-term financial plan needs.

In other words, you intentionally elect to pay more tax today in exchange for the potential of a smaller tax bill later.

When implemented correctly, a Roth conversion allows you to pay taxes on your terms, at a rate you find acceptable, rather than taking a chance on future tax laws and rates at a time of the IRS' choosing. If implemented incorrectly, however, it may cost you more than you expected.

The silent partner

Imagine going into a business partnership where you provide all the capital, do all the work, take all the risk and spend years building something valuable. Then, when the time finally comes to enjoy the rewards, your partner suddenly appears and tells you how much of the business belongs to them.

No rational person would willingly enter into that kind of arrangement. Yet people all across America do something very similar through tax-deferred retirement accounts.

They contribute the money. They assume the investment risk. They watch their balance climb over decades and mentally count that balance as part of their retirement nest egg. The problem is that they don't know how much belongs to them until they begin taking withdrawals. At that moment, the IRS steps in and determines how much it gets to keep.

This is where a Roth account comes into the picture. Money placed in a Roth account grows tax-free, and qualified withdrawals in retirement are generally free from federal income tax because the taxes were paid before the money entered the account.

Many investors consider converting a portion of their tax-deferred accounts into a Roth account. The process is relatively straightforward: Money is transferred from a tax-deferred account into a Roth account.

However, when you make the conversion, you must pay income tax on the amount being converted.

At first glance, that may sound counterproductive. Why would anyone voluntarily create a larger tax bill? The answer is simple: You may be exchanging a known tax bill today for a potentially larger and less predictable tax bill in the future.

Roth assets can also create meaningful tax advantages for beneficiaries who may inherit those accounts.

When should you convert?

While Roth conversions may benefit many people preparing for retirement, it is not always advisable to convert all of the funds held in tax-deferred accounts. Maintaining tax diversification can be just as important as maintaining a diversified investment portfolio, yet it is often overlooked in traditional retirement planning.

Using the tax code efficiently later in life may require a blend of income sources, including taxable income, long-term capital gains, dividend income and Roth income.

I have seen situations where aggressively converting every available dollar to a Roth account has cost a retired couple nearly as much as if they had never converted at all. They lost opportunities to strategically fill lower tax brackets later in retirement and paid substantially more than necessary.

This highlights an important point: A Roth conversion is not the goal. The goal is to create the most efficient retirement income strategy possible. The rules surrounding Roth conversions can be complex, but the decision should be evaluated within the context of your overall retirement strategy.

At R.D. Smothers (RDS) Wealth, we encourage clients to begin by estimating their expected income for the year and determining how much room they have available within their current tax bracket.

Lower-income years can present some of the best opportunities for Roth conversions because they allow you to convert more assets while potentially remaining in a favorable tax bracket.

Taxes are only one piece of the equation. A well-designed Roth conversion strategy should also account for Medicare premium surcharges, commonly known as IRMAA, future healthcare expenses, estate planning objectives and the income needs of both you and your beneficiaries.

How much should you convert? Understanding the tax fountain and your 'Opportunity Zone'

This brings me to an important point about understanding your own unique relationship with the tax code. After all, the tax code is how your silent partner ultimately determines how much of your money you get to keep and how much they get to take.

Many retirees spend decades building wealth without fully understanding how that partnership works. Failing to understand the tax code will likely cost you at some point in retirement, whether through unnecessary taxes, Medicare surcharges, inefficient withdrawals or missed planning opportunities.

What makes this even more challenging is that the tax code you retire under may not be the same tax code you die under. I often tell clients that the tax code is written in pencil, not ink. Congress can change it, modify it or rewrite portions of it at any time. That's why successful tax planning requires ongoing adjustments as your circumstances and the tax laws evolve.

If you want to use Roth conversions to help manage your future tax burden, understanding tax brackets is essential. Before you can determine whether a Roth conversion makes sense, you need to understand how much of a conversion may be appropriate.

At RDS Wealth, we often refer to this as identifying your "Opportunity Zone." This is the portion of the tax code where additional income can potentially be recognized at rates that may be favorable relative to what you might pay in the future.

The U.S. tax code contains seven federal income tax brackets, ranging from 10% to 37%. Many people assume that if they fall into the 22% tax bracket, all of their income is taxed at 22%. That's not the case. Each bracket applies only to a specific portion of your income.

For example, in 2026, a married couple filing jointly receives a standard deduction of $32,200. Let's say the same couple has a gross income of $165,000 and no other deductions or credits. Their taxable income would be $132,800. They are squarely in the 22% tax bracket, but they will not pay 22% federal income tax on all of their money.

They will pay 22% federal income tax on only about $32,000 of their taxable income. When we look at this through the lens of Roth conversion planning, something interesting begins to emerge.

One way to grasp how the brackets work is to imagine them as a multitiered fountain. Each year, you pour all of your income into the top of the fountain.

The first tier to fill is the deduction bucket. No tax is paid on any income that lands in this bucket. Once that bucket is full, income spills into the 10% tier. Every dollar that lands there is taxed at 10%. The water then overflows into the 12% tier, then the 22% tier and eventually into higher tiers as more income is added.

In the example of the married couple earning $165,000, their income fills the lower tiers and then partially fills the 22% tier. Because they have not yet reached the top of that bracket, a portion of the 22% tier remains empty.

The empty space remaining in that tier is what we call the Opportunity Zone. It's the amount of income you may be able to recognize before spilling over into the next tax bracket.

In this example, the Opportunity Zone represents more than $78,000 of available space. That doesn't mean this couple should convert the entire amount, but it does mean they have room available to recognize additional income at a known tax rate rather than waiting until later when tax rates may be higher.

This is where Roth conversion planning becomes so powerful. If appropriate for your situation, you may be able to convert enough money to fill the remainder of that tier without spilling into the next bracket.

In doing so, you knowingly pay tax on those dollars today, move them into a Roth account and potentially allow future growth to occur in a tax-free environment.

The fact that you paid tax on the conversion means your tax bill may be higher this year than it otherwise would have been. However, if executed properly, that higher tax bill today may result in substantially lower taxes over the lifetime of the account.

Again, the goal of a Roth conversion is to pay a known and acceptable rate of tax while strategically reducing the future claim your silent partner has on your retirement assets.

The goal is not to eliminate taxes. The goal is to choose when you pay them. The families who often benefit most from Roth conversions are those who proactively manage their tax brackets rather than allowing future tax laws and required distributions to blindly manage it for them.

Ronnie Blair contributed to this article.

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

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

Members of Generation X grew up navigating the challenges of such video games as Pac-Man, taking care of themselves after school and riding bikes without a helmet.

Today, as they approach retirement, one of their most profound challenges will be ensuring they have enough money to see them through their later years.

Born from 1965 to 1980, Gen X is now in its peak retirement-planning years.

With retirement on the horizon, many are confronting complex questions about financial security and how to make their savings last.

If the U.S. is to avoid a widening of the retirement savings gap beyond its current estimated size of $7 trillion, it's imperative that the next cohort of retirees is better positioned to achieve long-term financial security.

Unlike the baby boomer generation, most Gen X workers have spent their careers without access to traditional defined benefit-pension plans. Instead, they've relied primarily on 401(k) defined-contribution plans.

At the same time, many are also facing major financial headwinds, including rising housing and education costs, as well as dual caregiving responsibilities for both their children and aging parents.

As a result, many members of Generation X report either insufficient savings or low confidence in their ability to make their savings last.

An opportunity for financial pros

This shift presents a significant opportunity for financial professionals. While baby boomers have been much of the industry's focus, Generation X has now entered a pivotal stage of retirement preparation.

The need for help is undeniable. About 37% of Generation X have either postponed, or are contemplating postponing, their retirement due to financial concerns, compared to 19% of boomers.

Meanwhile, nearly 20% of Americans age 65 and older remain employed — up from 11% in 1987. As Gen X progresses toward traditional retirement age, financial pressures might further expand the proportion of older Americans remaining in the workforce.

Generation X faces tough decisions about how to manage asset decumulation. While defined-contribution and IRA plans serve as effective accumulation vehicles, they're limited in their ability to convert savings into guaranteed income streams.

Annuities address this challenge by turning a sum of money into predictable payments that one can't outlive.

In addition, anticipated intergenerational wealth transfers from boomer parents might increase demand for structured income solutions, if it fits the goals of the Gen X recipient.

The fragile decade is coming

Many Generation X individuals are still years from retirement and haven't planned for comprehensive income strategies. This presents both a challenge and an opportunity for the retirement and annuity industry.

Historically, annuities are most commonly purchased by individuals age 55 to 70. Today, the oldest members of Gen X are around 60, while the youngest are now 45.

As more enter the "fragile decade" — the five years before and after retirement, the period when market volatility can severely impact long-term financial security — the importance of downside protection and income certainty becomes more pronounced.

According to trade association LIMRA, 69% of surveyed Gen X respondents indicated they would prefer an annuity over investing a $100,000 inheritance in the stock market. And 37% said they would be "most interested" in purchasing an annuity, compared with 21% of boomers.

However, 64% of respondents find annuities the hardest product to understand. This suggests a clear need for improved education and transparent communication.

While annuities are one tool in the retirement toolkit, albeit a useful one, there are several areas that Gen Xers should understand before incorporating them into their plans.

Chief among these should be understanding how the contract value can grow — for example, is the return offered by an annuity set at a fixed rate or is it tied to the stock market?

Providers often present hypothetical back-tested scenarios to illustrate potential outcomes, but as with any investment, past performance is not a reliable indicator of future results.

Equally important is evaluating the provider. Given the longevity of an annuity, they must feel confident in the insurer's ability to meet its obligations:

• How long has the firm been in business?
• What is its financial rating?
• Are you confident in their ability to pay out when due?

Other considerations

Generation X investors should also assess how an annuity will fit within their broader financial planning. Guaranteed income products are most effective when they complement, not replace, other assets and align with liquidity needs, risk tolerance and long-term retirement goals.

By the same token, there are a variety of areas that the financial-services industry should consider to enhance education and adoption among Generation X. These include:

• Deepening collaboration with financial planners to address retirement savings gaps and clarify how annuities might contribute to sustainable income planning
• Expand access through employers, including integrating annuity options into 401(k) plans and other retirement programs
• Encourage comprehensive retirement-planning discussions that include guaranteed income solutions as part of decumulation strategies
• Help reduce debt burdens and increase savings, both within and outside of retirement plans
• Support multigenerational planning, helping Generation X households balance the financial decisions of baby boomer parents and dependent millennial children
• Reframe annuities beyond retirement, using them to help fund known future expenses such as education
• Incorporate anticipated wealth transfers into long-term income planning, helping Gen X clients prepare for how future inheritances might support their retirement income strategies

Generation X is digitally fluent and accustomed to mobile financial experiences. Although the annuity industry has historically lagged in this area, substantial progress has been made in recent years to serve financial professionals and consumers digitally.

Online platforms that simplify onboarding, allow for self-service, and provide real-time income illustrations will be critical to engaging with Generation X.

Without significant change, this "forgotten generation" faces a serious risk of entering retirement less secure than any generation before it.

The retirement industry has both an opportunity and a responsibility to engage Generation X proactively to help prevent a deepening of the retirement savings crisis across a new generation.

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• Gen X vs Boomers: Why the Rules of Retirement Have Changed
• The Overlooked Generation: An Expert's Guide to How Gen X Can Finally Get Ahead
• How Gen X Could Reinvent Retirement

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

In 1964, The Beatles released A Hard Day's Night, a soundtrack to a whirlwind year that captured the frenzy of Beatlemania.

Buried among the album's better-known hits is a John Lennon song called "When I Get Home." The song is energetic, upbeat and driven by a simple desire: After a long and exhausting journey, he just wants to get home.

More than 60 years later, many young Americans share that same desire. The difference is that today's journey home is proving far more difficult than Lennon could have imagined.

For generations, buying a first home was considered one of the defining milestones of adulthood. It wasn't easy, but it was attainable. A starter home represented more than four walls and a roof. It was a foundation for building wealth, raising a family, and creating a sense of stability and belonging.

After nearly four decades of working with families, I have observed that most families build their wealth primarily through two pillars.

The first is the home equity they build as prices rise over time and mortgages are paid down a little each month.

The second is the regular deposits they make to their 401(k) plans through payroll deduction over decades of employment.

Today, that first step onto the property ladder is becoming increasingly difficult.

Hurdles for first-time buyers

According to a recent Zillow report, there are now 242 cities across the United States where a starter home costs $1 million or more. Before the pandemic, that number stood at just 80. In just a few years, the number of cities where a modest entry-level home carries a seven-figure price tag has more than tripled.

The challenge facing young families extends well beyond the purchase price itself. Home values have risen substantially over the past decade, but so have many of the ongoing costs associated with homeownership. Property taxes, insurance premiums, utilities and maintenance expenses have all climbed, making ownership more expensive even for families that can afford the mortgage itself.

Then there is the mortgage.

For much of the decade following the Great Financial Crisis (GFC), prospective buyers could borrow money at historically low interest rates. While home prices were rising, monthly payments remained relatively manageable because financing costs were exceptionally low.

That equation has changed dramatically. Higher interest rates combined with higher home prices have pushed monthly mortgage payments to levels that would have seemed unimaginable only a few years ago.

Many younger buyers view mortgage rates near 6% as unusually high, but historically, they are not. When I began my career in 1987, mortgage rates were often between 9% and 10%, and rates above 5% were considered normal for much of the following two decades.

The difference today is that buyers are confronting those rates after spending more than a decade anchored to the exceptionally low borrowing costs that followed the GFC. Economists call this recency bias. When rates returned to more historically typical levels, many buyers experienced sticker shock.

As a result, many young families find themselves squeezed from both directions. Saving for a down payment has become more difficult because everyday living expenses consume a larger share of household income.

Student loan payments, childcare costs and rising insurance premiums often leave little room for accumulating the savings needed to buy a first home.

At the same time, even those who successfully save enough for a down payment often discover that the monthly mortgage payment remains out of reach.

Real cost of delayed homeownership

In many ways, this story is about more than housing.

Homeownership has historically been one of the primary ways middle-class Americans build wealth. A home is often the largest asset a family will ever own. It provides the opportunity to accumulate equity, benefit from appreciation over time and create financial flexibility for future goals.

Delaying homeownership by five, 10 or even 15 years can have meaningful consequences for long-term wealth creation by delaying the accumulation of equity and the compounding effect of home price appreciation.

According to research from MBS Highway, an organization that conducts economic research and forecasting on the real estate and mortgage markets, homeowners tend to have substantially higher net worth than renters over time. Property ownership serves as a forced savings plan, an inflation buffer and a stability anchor for long-term financial security.

This is one reason housing affordability has become such an important economic issue. It is not simply about real estate markets or mortgage rates. It is about whether younger generations will have access to the same wealth-building opportunities that previous generations enjoyed.

Helping others break into the market

Of course, every generation faces its own challenges. The path to homeownership has never been perfectly smooth. Markets change, interest rates fluctuate and economic conditions evolve. Yet the combination of higher prices, higher financing costs and higher ongoing ownership expenses has created a particularly difficult environment for today's first-time buyers.

I have had many conversations with clients who have children and grandchildren struggling to buy their first home. They understand the frustration and, at times, the feeling that the math simply doesn't work.

In some cases, families that have used the financial planning process and are confident they have achieved their own retirement goals are exploring ways to help younger generations with down payments or other housing-related expenses as they work toward financial independence.

Many young families are simply looking for a place to start. They are looking for a place to put down roots, build a life and create a sense of permanence. In other words, they simply want to get home.

Back in 1964, Lennon sang about the anticipation of finally reaching the place where he wanted to be. For many young Americans today, that same destination remains the goal. The challenge is that the road home has become far longer and more expensive than it was for the generations that came before 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.

When a family member or close friend passes away, the person named as executor often steps into the role thinking of it as an honor. In reality, it can quickly become something much more demanding.

Consider a typical situation: An individual dies with a family home, investment and retirement accounts and has named beneficiaries. The executor will need to gather financial records, coordinate with attorneys and accountants, manage or sell property, file tax returns and make decisions that directly affect what each beneficiary ultimately receives.

Add in multiple properties in different states, business interests, artwork and digital assets, and settlement of an estate can take several years.

When choosing an executor, many people focus first on trust. While trust is essential, it is only one part of what the role requires. Choosing an executor deserves the same level of attention as creation of the estate plan itself.

Serving as executor is more than an honor — it's a job

Acting as executor comes with a great deal of responsibility and requires a broad range of skills. The role may be filled by an individual, a professional fiduciary such as a trust company or bank or a combination of both serving as co-executors.

In practice, the responsibilities of settling an estate often include:

• Locating, collecting and safeguarding assets
• Paying debts, taxes and administration expenses
• Coordinating with attorneys, accountants and financial advisers
• Managing or selling property
• Communicating with beneficiaries
• Distributing assets according to the terms of the will

Throughout the process, the executor serves as a fiduciary, with a legal duty to act prudently, impartially and in the best interests of the estate and its beneficiaries.

But even this list captures only part of the picture. Administering an estate is often an extended process that requires ongoing judgment, coordination and attention to detail.

Choosing the right executor: What to look for

The most qualified executor is not necessarily the person closest to you. Instead, consider whether they have the qualities needed to manage what can be a lengthy and complex process.

Financial judgment is critical. Executors are often required to evaluate complex or illiquid assets, address liquidity needs and ensure obligations, such as taxes and expenses, are met without unnecessarily diminishing the value of the estate.

Additionally, they must make decisions concerning the sale, retention and investment of the estate assets.

Experience in tax matters is helpful. Executors are responsible for the preparation and filing of the decedent's federal and state income tax returns and applicable estate and gift tax returns.

These filings can involve detailed valuation and reporting, making tax coordination one of the most demanding aspects of estate administration.

Objectivity matters, particularly in families. When an executor is also a beneficiary, decisions such as tax elections or timing of distributions can affect outcomes unevenly. The ability to act impartially is essential to avoiding unnecessary conflict.

Time and availability are often underestimated. Settling a complex estate can easily extend for several years, particularly if an audit issue arises. What begins as a defined responsibility can become an ongoing commitment. Your executor must be willing and able to commit time and energy to the task.

For these reasons, some individuals consider naming a professional fiduciary as sole or co-executor. Professional fiduciaries bring specialized expertise, continuity and established administrative resources, particularly in more complex estates.

Why it's important to revisit your choice

Even thoughtful executor choices should be revisited over time to ensure that each named executor is up to the task.

A lot of things can change between the time an executor is named and when they serve.

• The amount and complexity of assets can change
• Individuals move and may acquire property across multiple jurisdictions, requiring coordination of different probate processes
• Digital assets and cryptocurrency have introduced new legal and practical considerations

Additionally, tax rules are always changing.

Make sure that the person named years ago is still the best fit for today's realities.

The difference between a plan and a successful outcome

For some families, a spouse, adult child or trusted friend may be the right choice. For others, a professional fiduciary or co-executor arrangement may provide valuable expertise, continuity and objectivity.

It's also important to remember that estate administration is often just the beginning. In many estate plans, the executor's work lays the foundation for trusts that may continue for years, or even generations, after the estate has been settled.

Decisions made during administration can influence how efficiently assets are transferred, how taxes are managed and how effectively long-term planning objectives are achieved.

Ultimately, an estate plan is only as effective as the people responsible for carrying it out. Taking time to thoughtfully select and periodically review your executor can help ensure your wishes are fulfilled and ease the burden on the people you leave behind.

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

Retirement is supposed to be the reward for decades of disciplined saving. But for many retirees, a hidden tax problem quietly erodes what they've worked so hard to build — not through fraud or negligence, but through a lack of coordination between their income sources and their tax exposure.

Most retirees don't realize they're overpaying until after the damage is done. In retirement, the biggest tax triggers aren't wages — they're the benefits and accounts you spent a lifetime accumulating.

Understanding how they interact is what separates a tax-efficient retirement from an expensive one.

How IRA withdrawals can make Social Security taxable and Medicare cost more

Your income in retirement flows from multiple sources: Social Security, IRA withdrawals, investment income, sometimes a pension.

Each is governed by its own rules. The problem is that these streams don't exist in isolation. They stack on top of one another, and the IRS adds them together when determining what you owe.

A retiree who pulls $40,000 from an IRA to cover living expenses may not realize that withdrawal just made more of their Social Security taxable, bumped their Medicare premiums, and pushed them into a higher tax bracket.

None of those outcomes required earning a dollar more. They were triggered purely by the order and size of withdrawals from accounts they'd already paid into for decades.

Social Security: How much of your benefit is taxable

Whether your Social Security benefit is taxed depends on your provisional income: Adjusted gross income, plus tax-exempt interest, plus half of your Social Security benefit.

For individuals, once provisional income exceeds $25,000, up to 50% of benefits become taxable. Above $34,000, that rises to 85%. For married couples filing jointly, those thresholds are $32,000 and $44,000, respectively.

These thresholds have not been adjusted for inflation since they were established in the 1980s and 1990s. That means a retiree in 2026 with a modest lifestyle can easily find that 85% of their Social Security is taxable, not because they're wealthy, but because the brackets never kept pace with rising benefit amounts and retirement account balances.

RMDs: The income you're forced to take whether you need it or not

Required minimum distributions begin at age 73 (under the SECURE 2.0 Act, the starting age for RMDs will increase to age 75 for individuals born in 1960 or later). The IRS requires a calculated percentage of your tax-deferred accounts to be withdrawn each year, regardless of whether you need the money.

On a $1 million IRA, the first RMD is roughly $36,000 to $40,000. That amount grows as a percentage of the account each year.

Because RMDs count as ordinary income, they don't just generate their own tax bill. They push provisional income higher, which makes more of your Social Security taxable.

They can move you from the 12% bracket to the 22% bracket. They can trigger IRMAA surcharges on Medicare premiums that won't show up until two years later.

For retirees who spent decades deferring taxes to build a larger account, the RMD is often when the full bill arrives, on the IRS's schedule, not yours.

IRMAA: The Medicare surcharge most retirees don't see coming

The standard Medicare Part B premium in 2026 is $202.90 a month. But that is only what lower-income beneficiaries pay. Once your modified adjusted gross income crosses certain thresholds, you pay significantly more through IRMAA surcharges, and the lookback period means the income that triggers those surcharges was reported two years earlier.

For a married couple filing jointly, crossing into the first IRMAA tier costs $2,297 a year. Moving from Tier 1 to Tier 2 adds another $3,475, bringing the couple's total annual surcharge to $5,772. At the top tier, the combined Part B and Part D surcharges reach $13,872 a year for a couple on Medicare together.

The cliff structure matters: Exceeding a threshold by even one dollar triggers the full surcharge for that tier. A retiree who crosses an IRMAA threshold owing to a one-time Roth conversion or asset sale will pay elevated premiums for the entire following year, regardless of whether income normalized.

What to do about it

This is where most retirement plans fall short. Knowing these rules exist is not the same as having a strategy around them. Here is what proactive planning looks like in practice.

1. Use the pre-RMD window for Roth conversions.

The years between retirement and age 73 are often the most underused planning opportunity retirees have. During this window, income is typically lower, brackets are more favorable and there are no required distributions yet.

Converting portions of a traditional IRA to a Roth account during this period means paying taxes at today's rates on a smaller balance, reducing the size of future RMDs, lowering provisional income in later years, and shrinking the Social Security tax exposure and IRMAA risk that come with large mandatory withdrawals.

The right conversion amount each year is the one that fills your current bracket without crossing into the next one or triggering an IRMAA tier.

2. Sequence withdrawals with the bracket in mind.

The order in which you draw down accounts determines your tax rate each year. A common approach is to spend from taxable brokerage accounts first, then tax-deferred IRAs, then Roth accounts last.

But the more useful framework is to think about filling your current bracket each year deliberately: Taking enough from tax-deferred accounts to use the lower brackets fully, while leaving Roth assets intact to avoid pushing income higher when you don't need to.

3. Map your IRMAA exposure two years out.

Because IRMAA is based on income from two years prior, you need to be thinking about Medicare premiums before you're on Medicare.

A retiree who does a large Roth conversion at 63 needs to understand the Medicare premium implications at 65. The specific IRMAA thresholds for 2026 for married couples filing jointly start at $218,000 in MAGI.

Staying below a threshold is worth real money, and in many cases a modest adjustment to a conversion amount or the timing of an asset sale is enough to avoid crossing a tier entirely.

4. Use qualified charitable distributions (QCDs) to satisfy RMDs tax-free.

Retirees who are 70½ or older and charitably inclined can distribute up to $111,000 a year directly from an IRA to a qualifying charity. That amount counts toward the RMD requirement but does not appear as taxable income.

For a retiree who gives regularly, routing those gifts through a QCD rather than writing a check from a bank account eliminates a dollar of ordinary income for every dollar donated, which reduces provisional income, protects Social Security taxation rates and can keep MAGI below an IRMAA threshold.

The bottom line

Overpaying taxes in retirement is rarely the result of one bad decision. It is the result of income sources that interact in ways most retirees never planned for, because no one mapped those interactions before distributions began.

The strategies above are not complicated, but they require lead time, comprehensive financial planning and strategic coordination. Roth conversions done at 67 change what your RMDs look like at 73. Income decisions made at 63 affect your Medicare premiums at 65.

The retirees who pay the least in taxes are not the ones who earned the least. They are the ones who planned specifically for the way retirement income actually works, before the compounding consequences had already arrived.

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• Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very Likely
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Every retirement plan is built around the same fear: Outliving your money. The industry has developed sophisticated tools to address it.

• Monte Carlo simulations model the probability that a portfolio will survive 30 years of withdrawals
• Safe withdrawal rates are debated to the decimal point
• Longevity risk is taken seriously

The research has identified a different risk, one that is statistically more common, demonstrably more devastating and absent from virtually every financial plan in circulation.

The risk is outliving your mind.

A 2025 systematic review in Health Psychology Review confirmed what longitudinal research has been building toward for a decade: Retirement is associated with measurable cognitive decline, not only because people age but because structured cognitive demand disappears.

Researchers gave the mechanism a name: The mental retirement hypothesis. When the brain is no longer required to perform at the level a career demanded, it follows the body's example and withdraws from challenge. The decline is not inevitable. It is, however, predictable — and far more preventable.

The professor

Margaret spent 41 years as a professor of developmental psychology at a major research university. She published extensively, advised doctoral students, taught graduate seminars and worked at the edge of her discipline for three decades. She retired at 68 with a comfortable pension and her health intact. Within 16 months, she quietly realized that something she had always taken for granted was beginning to slip.

She knew the research. She had assigned papers on neuroplasticity and cognitive aging to her students. She understood, at a scholarly level, exactly what was happening. She simply had not planned for it.

What work does for your brain

The workplace offers something most people never consciously notice until it is gone: A daily cognitive stimulus framework they did not have to design.

• Novel problems arrived uninvited
• Deadlines imposed urgency
• Colleagues challenged assumptions
• Students asked questions with no clean answers
• The environment kept the brain engaged

Margaret's career was among the most cognitively demanding. Her days required reading new research, evaluating evidence, constructing arguments, defending conclusions under peer scrutiny and translating complex ideas for audiences that expected precision. None of it was easy. All of it was, neurologically, exactly what the brain requires to sustain function.

This is where the research presents an inconvenient finding for high achievers: The steeper the cognitive demands of the career, the steeper the potential decline when those demands end. Retirees from high-complexity occupations, such as physicians, executives, lawyers and academics, face the greatest gap between career-level cognitive engagement and the engagement that retirement, by default, provides.

The person who built the most sophisticated mind is, in the absence of deliberate design, at the greatest risk of watching it diminish.

Margaret's retirement did not end her paycheck. It removed the daily stimulus her brain had organized itself around for four decades. The seminars ended. The doctoral students graduated. The editorial reviews stopped arriving. The conferences, the department meetings, the weekly urgency of a discipline that never stopped moving — all of it faded within a single academic year.

What replaced it was quiet and comfortable. And, by the standard the research now applies, cognitively insufficient.

The antidote isn't what you think

When people learn that cognitive engagement protects the aging brain, the response is predictable: Crossword puzzles, brain-training apps and sudoku. These feel like the right answer. They are not wrong, exactly. They are simply not enough.

The research draws a distinction most people miss. Practicing a skill you already possess is maintenance. The brain grows through novelty, not repetition. A crossword puzzle that takes 45 minutes is not the same as a problem with no known solution that requires you to build new mental frameworks to approach it. The first sustains what is already there. The second creates something new.

Researchers at Binghamton University have identified social engagement as, in their words, "simply the single most powerful factor for cognitive performance in old age," ranking it above brain games, supplements, and even formal education. The engagement they describe is social complexity: Relationships that require reading another person, managing disagreement, sustaining a connection through difficulty and being genuinely accountable to another person's expectations.

The research consistently identifies three protective conditions:

• Novel learning, meaning acquiring skills and knowledge you do not already possess
• Social engagement with real complexity and mutual accountability
• Purposeful challenge, meaning goals that require sustained effort and carry real consequences

Margaret's daily crossword does not meet the level of challenge her brain requires. A structured role mentoring junior faculty two mornings a week meets all three. She is learning how her discipline has evolved since she last taught it. She is accountable to people who need her. The outcomes matter. The cognitive demand is functional, not decorative.

The distinction is not about difficulty. It is about demand and whether that demand is connected to something with genuine stakes.

Designing the cognitive portfolio

The financial planning vocabulary that dominates retirement conversations offers, perhaps unintentionally, a useful frame.

A well-managed financial portfolio is diversified across asset classes, actively monitored and adjusted as conditions change. Left unmanaged, it is exposed to risks the owner has not accounted for.

The same logic applies to what might be called the cognitive portfolio: The collection of activities, relationships and challenges that keep the brain operating at a level commensurate with its capacity.

Most retirees do not deliberately manage their cognitive portfolio. They leave it to chance — and chance, without intention, follows the path of least resistance.

Three non-negotiables belong in a well-designed cognitive portfolio:

Novelty. Learning something genuinely new, not merely practicing what is already mastered. A retired professor of developmental psychology who is learning a new language, building furniture or navigating a community board where she holds no authority qualifies. A retired professor reviewing papers in her own specialty, while valuable, does not yield the same neurological return.

Social complexity. Relationships with real stakes, mutual accountability and the productive friction that keeps the mind alert.

Purposeful challenges. Goals that require sustained cognitive effort and carry consequences the retiree genuinely cares about.

For Margaret, this meant three commitments in her second year of retirement:

She joined a community mediation program, a field where her expertise did not transfer and her credentials carried no weight

She accepted an invitation to co-teach a public seminar with a colleague 30 years her junior, a role that required her to learn as much as she taught

And she began meeting weekly with two graduate students whose dissertation committees she had agreed to serve on as an external reader

None of it re-created her career. All of it replicated the conditions her career had provided: Novel inputs, social accountability and a goal that demanded her best thinking.

Intellectual stimulation is one of the five pillars of a fulfilling retirement. Among the five, it is the one most often treated as supplementary. Research on cognitive decline suggests it is anything but. It is load-bearing.

A different kind of risk management

Margaret knew the theory. She had spent four decades teaching it. The gap in her retirement plan was not ignorance; it was application. She understood, in the abstract, that the brain requires challenge to sustain function. She had simply not built that requirement into the concrete architecture of her daily life.

That gap is not unique to academics. It is the structural condition of traditional retirement applied to a brain that was never designed to stop working.

The paradox the research holds without resolving, the very qualities that made a career exceptional, such as the appetite for intellectual challenge, the drive toward mastery and the need for work that matters, are the same qualities that make retirement cognitively risky when they are not deliberately redirected. The high achiever's greatest professional asset becomes, without intentional design, the high achiever's greatest retirement vulnerability.

Financial planning has developed precise tools for managing money over a 30-year retirement. It has not yet developed equivalent tools for managing the mind over the same span. Both are depletable. Both respond to how they are managed. Both require a strategy.

Every retirement plan should answer two questions. The first is familiar: Will the money last?

The second has been absent from the planning conversation for too long.

Will the mind?

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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

The transition of wealth carries a quiet, universally recognized paradox: The very resources designed to provide security and boundless opportunity can inadvertently destroy a child's drive, purpose and self-reliance.

Parents across the wealth spectrum fear that an unearned windfall will leave their children in a permanent "financial hammock," devoid of the struggles that forge character.

Warren Buffett famously summed up the ideal wealth transfer philosophy: Leave children "enough money to do anything, but not enough to do nothing."

Achieving this delicate equilibrium — providing a robust launchpad without extinguishing personal ambition — requires an intricate understanding of behavioral psychology, modern trust structuring and intentional family governance.

How to tell if your children are ready to inherit

How can you predict if passing on wealth will act as a catalyst or a corrosive force? Evaluating an heir's readiness requires moving beyond subjective parental hope and observing concrete behavioral indicators.

Financial literacy is the foundational "green flag." If an heir understands basic budgeting, contributes to retirement accounts and manages personal debt responsibly, they demonstrate a baseline respect for capital.

Emotional regulation is equally critical. Wealth is a relentless amplifier of existing behavior. If an individual cannot handle themselves gracefully without money, they definitely won't be able to handle themselves with it.

Perhaps the most definitive indicator of readiness is the pursuit of a self-directed mission. Wealth provides profound freedom, but freedom devoid of purpose is a psychological poison.

Heirs who thrive post-inheritance possess a mission independent of the family balance sheet — whether that's building a business, advancing in the arts or sciences, or mastering a profession. Inheriting money requires no skill, but building something from scratch tests the discipline, humility and resilience required to handle sudden wealth.

To evaluate, or build, financial fortitude, challenge your heirs to create an 18-month liquidity buffer for their fixed expenses. Demanding that they achieve this independently — through their own labor, discipline and budgeting — serves as a profound behavioral filter. They must balance short-term gratification with saving.

They may develop a sense of security and greater respect for capital. And, depending on their performance, that may indicate how an inheritance will affect their behavior.

The architecture of preservation: Principal trusts

Historically, estate planning relied heavily on age-based milestones — distributing a third of the principal at age 25, half at 30 and the rest at 35, for example.

This structure rests on the flawed assumption that chronological age directly correlates with emotional and financial maturity. A 25-year-old who adheres to a strict budget may be vastly more prepared for wealth than a 45-year-old who has relied on parental subsidies their entire adult life.

To mitigate the unintended consequences of rigid rules, sophisticated planners increasingly use principal incentive trusts. Rather than dictating an inflexible formula for distributions, a principal incentives trust outlines the wealth creator's core values, guiding philosophies and ultimate intents for the capital.

The trustee is granted broad, discretionary power to evaluate the heir's unique life circumstances. If an heir chooses a noble but lower-paying profession, such as public school teaching or social work, the trustee can authorize distributions to supplement their income — for example, to buy a home and fund other important large purchases.

This highly adaptable structure requires an exceptional trustee who deeply understands the family's ethos and can wield subjective power judiciously.

Cultivating the family enterprise

As family wealth scales into the $50 million-plus tier, the psychological and structural requirements can shift. If your goal is multigenerational funds, the rising generation must not view the wealth as a personal checking account. Rather, it must be conceptualized as a shared, multi-generational family enterprise.

Family wealth pioneer James E. Hughes Jr. advocates for the "family bank" concept. He redefines family wealth as a composite of three distinct capitals: Human (well-being and character), intellectual (knowledge and skills), and financial.

In this paradigm, financial capital is strictly subordinate. Its sole driving purpose is to protect and dramatically expand the family's human and intellectual flourishing.

Instead of passively receiving trust distributions, heirs apply to the family bank for structured loans to start a business or pursue advanced training. This mimics commercial lending but evaluates risk based on the potential growth of human and intellectual capital.

Even if a business venture ultimately fails, the intellectual capital gained by the heir more than offsets the temporary financial loss to the family's balance sheet.

Philanthropy as the ultimate sandbox

For parents wondering how to teach responsibility before the ultimate transfer, philanthropy serves as an exceptional training ground. By establishing a donor-advised fund (DAF) or private family foundation, you can mandate that the rising generation actively participate in its management.

Tasking younger heirs with researching charitable causes and presenting formal grant proposals develops profound empathy while rapidly dismantling entitlement.

It also teaches complex financial mechanics — from asset allocation to administrative costs — in an environment where the stakes are high for the community, but personal financial enrichment is completely removed from the equation.

Transferring wealth without destroying ambition is not a single act executed by signing a legal document — it is a decades-long, highly intentional process. By shifting focus from the mere legal transfer of assets to the psychological preparation of the heirs, families can help ensure their legacy fuels ambition for generations to come.

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

The family vacation is taking up a much larger share of the budget in 2026.

The cost of airfare is up more than 26% compared to last year, according to research from NerdWallet, mostly because of the higher price of oil.

When you add inflation's impact on hotels and dining, you're looking at a pretty penny for the average family of four.

It would be fair to question how much one vacation can really impact a long-term retirement plan.

However, it's not the vacation causing trouble — it's how you pay for it that could have long-term ramifications. One in three travelers who put their summer vacation on a credit card in 2025 are still paying it off today, another NerdWallet report found.

That accumulation of long-term, high-interest debt is what makes plans veer off track.

As the cost of living continues to rise, managing spending may need to move higher up the priority list in your financial plan.

Whether you're considering vacations, home renovations or buying that boat you've been dreaming about, here are three questions you should ask yourself before making a major spending decision in 2026.

1. Will the purchase put me in debt?

High-interest debt is a wealth killer. If you take the cost of your proposed vacation and add 24%, are you happy with the figure that comes out? Not all debt is inherently bad, but rolling credit card balances for unnecessary purchases certainly can be.

You can always cut costs on the vacation plans. Maybe you scale back the timeline of your visit or choose a road trip instead of a flight overseas. The value of a vacation doesn't come from the dollar amount spent, but from the time spent with family or friends.

There are always expenses that can be removed or reduced to bring your spending in line with your long-term plan. Making your purchases outright is always better than letting thousands of dollars accumulate on your credit card. If that debt is going to linger beyond your return date, consider when and where you can save along the way.

2. Does this purchase align with my priorities?

The most frugal among us may call vacations frivolous spending. Others will say that vacations are essential to relaxing, refreshing and allowing us to return to work rested and ready.

Burnout is a real consequence of the work-driven mantra that America loves to push. If a vacation is essential to your wellbeing, then by all means, make it happen.

That said, any large purchase should be in line with your long-term priorities. Does this short-term expense build toward your goals, or does it hinder them?

That answer will look different for every individual, but if you find yourself agreeing with the latter, there are alternatives to travel that can be equally rewarding.

One example is a home renovation. There's more of an investment in your purchase, which will keep you in line with your long-term plan. For instance, the rise in remote and hybrid jobs has made expansive home offices an increasingly valuable feature.

Meanwhile, finishing and renovating your basement is shown to have a potential 70% return on your investment.

Renovating your home may not be as restful as a vacation, but it's the kind of mentality to consider as costs rise and you find your plan being stretched to the limits. Is there some way to put your hard-earned dollars toward a purchase that returns value in the long run, is more in line with your priorities and still gives you satisfaction?

3. Will this impact my long-term goals?

A singular major purchase rarely determines whether or not someone retires successfully. But repeatedly overspending or delaying retirement contributions can. Will this vacation dig into your emergency savings? Will the impact be temporary or become an ongoing financial burden?

Vacation spending can be a slippery slope. You're getting away to enjoy yourself, and it's not enjoyable to type every purchase into a budget while you walk along the beach. It is enjoyable to get a few extra cocktails or room service. The dollar amount spent could end up much higher than you intended.

Time to decide

More and more families are living paycheck-to-paycheck across the country. This year, you may benefit from skipping a major purchase.

If you do decide to go away, make sure the trip doesn't compromise your good money habits. That means keeping savings intact, staying out of debt and keeping your retirement contributions on track. The goal is that your long-term plan remains in place, regardless of where you choose to spend your money.

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

When it comes to investing, most of us know that risk fundamentally shapes which investment options we should consider and frames our potential return profile. But how many truly understand the impact of time — or, more specifically, time horizon?

In truth, investing strategies should reflect both aspects: Our preference for or against risk-taking and how long our investments will be allowed to work for us before being liquidated and eventually spent.

Pink Floyd famously sang about the mindset of youth in the song "Time," noting how we act as if "there is time to kill today" only to suddenly realize "you missed the starting gun."

The reason time horizon plays such a critical role in investing is because, as risk grows, most investments tend to become more volatile, meaning their return profiles are more dispersed or scattered widely around the average.

The S&P 500, for example, has returned about 10% annualized on average over the past five decades. But it's rare to see a calendar year return near 10%, which has happened only once over that 50-year period — in 1993 (+10.08% return).

That's because the standard deviation, a measure of volatility, is between 15% and 20% for the S&P 500 index. Meaning, in actuality, annual returns tend to be scattered all over the place, with an upward trajectory of +10%, but year-in, year-out returns aren't all that close to the average, or mean.

Sequential-year S&P 500 returns starting in 2000 were -9.1%, -11.9%, -22.1%, +28.7%, +10.9%, +4.9%, +15.8%, +5.5%, -37.0%, +26.5% and +15.1%. Knowing that, an investor saving for a down payment on a house in three to five years might be scratching their head right now.

Because if she invested $5,000 per year into an S&P 500 index fund beginning in 2000, by the end of year 2002, she'd have only $10,446 of the $15,000 she put aside to save for that down payment. But if she invested the same $5,000 per year starting in 2003, by EOY 2005, she'd have $18,546.

Clearly, for a short-term need like saving for a down payment, investing into the stock market may not be a good idea. The volatility is just too high for that time horizon, making stocks too risky in this situation.

But what about a 30-year-old nurse or electrician or a CPA saving for their retirement in 35 years or so? For long-term time horizons, such as multiple decades, investing into risk assets such as stocks may make sense, despite stocks' inherent high volatility.

By looking at a rolling 10-year returns for the S&P 500, we find that it's very rare for any 10-year period to have a negative average annual return.

Over the past 100 years, for example, that's happened only a few times, especially when investors reinvest dividends back into shares of the S&P 500 index fund. A couple of 10-year periods starting in the late 1920s provided negative average annual returns because those years began with the market crash of 1929 and extended through the Great Depression.

More recently, the 10-year period covering the 2000-2002 and 2008-2009 dot-com bubble and global financial crisis, respectively, had a negative return, even with dividends being reinvested (barely, at -0.95% per year).

Many investors have gotten themselves into trouble by not understanding the connection between time horizon and investment return. It's easy to visualize, and compute, our money growing uniformly by 10% annually over the next three years, or eight years, or 25 years.

But that's not how stock markets work. It's much messier and lumpier than that, and ignoring this fact can do real harm to portfolios.

One tool I find valuable is a simple time vs risk matrix separated into four quadrants, as shown below.

Younger investors have longer time horizons, so they can invest more aggressively early in their working lives to (hopefully) achieve higher returns.

Historically, as long as this investor held their investments for 20 or more years, they would have been rewarded by stock market returns averaging around 10% annually.

Conversely, for near-retirees or those saving for short-term needs, given their shorter time horizon, they would be wise to keep their investment-risk level or volatility relatively low, to avoid the potential sequence of returns problems we demonstrated earlier.

Hopefully, this short article has persuaded you to carefully consider your time horizon before deciding which investments to purchase in your portfolio.

Past performance is not indicative nor a guarantee of future results.

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

My father was a general agent at Manulife when he was diagnosed with a rare neurological disease at 56. The disease progressed slowly, gradually taking his ability to write, then to speak. I attended his client meetings, became his hands and eventually his voice.

Because he had disability insurance, my family never had to worry about money during the most difficult years of our lives. That is the story I carry into every client conversation.

Campaigns like Disability Insurance Awareness Month serve as a useful reminder of when and how to introduce disability planning into client conversations. Of course, individual situations and outcomes vary, but that's exactly why I believe so strongly in having this conversation early.

The right time to broach the subject is before a client thinks they need it. Most people have never been seriously asked what would happen to their income if they couldn't work. The longer that question goes unasked, the harder it becomes to answer without a crisis forcing the issue.

The common objection — "it won't happen to me" — is best met with storytelling rather than hard data. My father's story often opens the door to a more personal question: "What's your plan if something happens to you?"

The role of disability insurance in a financial plan

Disability insurance is typically framed as income replacement — a safety net in case you can't work. That framing tends to undersell its value. For high earners, it's something more fundamental: The protection that keeps everything else in a financial plan intact.

For illustrative purposes, consider a scenario where a client earning $1 million a year becomes disabled. Their group plan has a hard cap at $10,000 a month, which protects only $120,000 of their annual income. Meanwhile, the market is down.

With no individual disability policy, they can draw down the retirement portfolio they spent decades building, or dramatically alter the lifestyle they planned around. Without disability protection, their financial plan is exposed.

Think of disability insurance as a lever. When you're disabled and not generating income, everything else in the plan — investment accounts, college savings, a family's lifestyle — depends on that lever holding up. If it fails, the plan may fail with it.

Disability insurance policy features

Once a client is ready to consider buying disability insurance, the conversation moves to policy mechanics.

The elimination period is the waiting period before benefits begin, typically 90 or 180 days. Ninety days is generally the right balance of cost and coverage, whereas 180 days is too long for many clients. Existing short-term group coverage can help determine which is appropriate.

The own-occupation definition matters most for professionals whose work is highly specialized. A dentist who develops chronic back problems from years of leaning over patients may never return to dentistry, but could technically work in another field.

Without own-occupation coverage, that dentist may receive no benefits. With it, they may be better protected, depending on policy terms.

The recovery provision is the least understood and can be particularly valuable in certain situations. When a recently disabled client returns to work but earns less than they did before, this provision bridges the income gap.

For commission-based professionals and business owners, the income rebuilding period can be just as financially damaging as the disability itself. A financial adviser who goes on claim for a year and returns with an empty pipeline may need six to 12 months to rebuild.

The recovery provision fills that period. Some carriers cap it at one year, while others extend it for the full benefit period.

Disability insurance vs business overhead expense insurance

Disability income insurance protects a business owner's personal income. Business overhead expense (BOE) coverage protects the operating costs of the business itself — rent, staff salaries, equipment, administrative expenses — while the owner is unable to generate revenue.

Most advisers can walk a client through this distinction without hesitation. The harder conversation, and often the one that hits closest to home, is the one they need to have with themselves.

Many advisers own their practice but do not have BOE coverage. They are, by definition, business owners, and every adviser who has committed to office overheads, support staff or an independent practice structure carries the same risk exposure as any other self-employed professional.

When a disability sidelines the person responsible for bringing in revenue, the fixed costs of the business don't pause. BOE coverage ensures those obligations are met and the business remains intact while the owner recovers.

Most policies have a maximum benefit period of two years, may be tax-deductible in certain circumstances, and are relatively affordable, particularly compared to the exposure they offset.

BOE coverage also changes the psychology of recovery. An adviser who has suffered a serious illness or injury faces enormous pressure to return to client-facing work before they're ready, knowing that every day out is a day the business is stalling.

A BOE policy removes that pressure. It makes it possible to focus on getting well, and to keep the promises made to clients in the process.

The importance of planning ahead

Disability planning has to happen before the diagnosis. Once a serious illness or injury happens, cognitive function is affected, decision-making is harder, and the ability to evaluate options clearly is compromised. The coverage, policy details and business overhead protection should all be in place before they're needed.

Disability doesn't discriminate by age, fitness or risk profile. It can happen across a wide range of individuals and circumstances, and is most likely to occur during the long window of working years, when income is highest, obligations are greatest and the financial consequences of losing that income are most severe.

The advisers who serve their clients well on this are the ones who treat disability coverage as a standard part of every financial plan.

This article is intended for informational purposes only and does not constitute financial, insurance, or tax advice. Individuals should consult their own qualified professionals to evaluate their specific circumstances before making decisions.

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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 I pulled one of your advisers aside tomorrow and asked them to walk me through your sales process step by step, from start to finish, could they do it? Could they tell me what happens in the first appointment, what gets said, what questions get asked and exactly how a prospect moves from curious to committed?

If the answer is "probably not," you don't have a sales process — you have a sales idea. And ideas, as good as they can be, don't scale.

I want to start there, because I believe the sales process is the single highest-leverage investment you can make in your business. Not a new CRM. Not a different marketing strategy. A documented, repeatable, trainable process for how you help people make one of the most important decisions of their lives.

Why systematizing your process changes everything

Here's the thing about a systematized process: It gives you data, and data gives you power.

When you can map out every stage of your sales process — first appointment, discovery, presentation, follow-up and close — you can start to see exactly where people fall off.

Maybe your first appointments are strong, but your second appointments are where you lose momentum. Maybe your close rate is great, but prospects are taking 90 days to convert when they should be taking 30. You'll never know until the process is written down.

I've talked to hundreds of top advisers, and the ones who are scaling, really scaling, aren't the ones with the most charisma in the room. They're the ones who've taken what they do naturally and turned it into something teachable.

Small hinges swing big doors. A 5% improvement in your conversion rate, compounded over a full year of appointments, is the difference between a good year and a great one.

Start with a recording

So, how do you build a process if you don't have one documented? Start with a recording.

With your client's permission, record three to five of your appointments. Then, upload those recordings into an artificial intelligence tool. Ask it to do a few things:

• Identify the structure of your conversation
• Flag where transitions happen
• Note the questions you ask and when you ask them
• Outline what you're communicating in each phase of the meeting

What you'll get back is a mirror. You'll see your process as it actually exists, not how you think it exists. And from that mirror, you can start to build something real — a written framework with defined stages, key questions, value statements and transition language. A process that lives outside your head.

Once it's documented, it's trainable. Now, when you hire an adviser, you're handing them a playbook of your sales process instead of hoping they pick it up through osmosis. That is how you scale.

Use AI as your personal sales coach

For those of you who already have a process — maybe you've been in this business for 15 years — you know your steps and your language. Here's how AI can still level you up.

Open your AI tool of choice and prompt it like this:

"I want you to act as an expert sales trainer who specializes in financial services and complex consultative selling. Here is my current sales process. Review each step and tell me: Where is there friction? What objections am I not addressing early enough? What questions should I be asking that I'm not? How can I tighten my value proposition?"

The feedback you get will be genuinely useful. AI has absorbed more sales methodology, psychology and process design than any single coach you could hire. Used this way, it's like having a world-class sales trainer on call, available whenever you have 30 minutes and a willingness to improve.

Then try something it suggests. Not 10 things — just one. Test a new discovery question. Adjust your transition into the second meeting. Refine how you open the closing conversation. See what moves the needle. If it works, bake it into your process permanently.

Remember why the process matters

I want to say something that I think gets lost in all the talk about conversion rates and close ratios: This is really about helping people.

Sales is a noble profession. I believe that in my innermost being.

Think about what you're actually doing when you sit across from a prospect. Most people, given the choice, will not make a decision. They will procrastinate, defer and wait until "the right time." They'll let inertia decide for them. They'll reach retirement having never truly planned for it, not because they didn't have the resources, but because no one ever pushed them to act.

You are that person. You are the one who sits down with someone, helps them see what their future looks like and then helps them do something about it. The work you do to improve your process, to sharpen your questions, to get better at guiding people through a decision — that work directly translates into better retirements for real people.

Believe in what you do. Work hard at it. Don't apologize for being good at converting people, because converting them means they're supported. It means they'll have a plan when the market drops. It means their spouse won't be left scrambling.

The best salespeople I've ever met aren't the slickest — they're the ones who believe most deeply that their clients need what they're offering and have refined their ability to communicate that clearly.

A challenge for you

Record your next three appointments and upload them into AI. Build or refine your documented process, then share it with your team and train against it. If you already have a strong process, spend 30 minutes with AI acting as your sales coach and identify one thing to improve. Just one.

The advisers who will look back on 2026 as a breakout year won't be the ones who worked harder. They're the ones who worked on the right things — and a systematized sales process is one of the right things.

You help people enjoy their retirement. What you do matters. Do it with intention, do it with excellence and do it with the confidence that comes from knowing your process cold.

Make this the year you build something that scales.

Advisors Excel's mission is simple yet profound: to help good advisers become great business owners while enabling their clients to enjoy the retirement of their dreams.

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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.